Many small businesses traditionally take care of their own accounting. They might employ one person to manage the day to day bookkeeping and only call upon the services of an accountant for tax purposes or when the end of year accounts need to be produced. This may well work for your business, but when things are not going quite as well as you might hope, can outsourcing all of the accounting offer a better deal?
Access to the Right Information
Running a small business can be hectic enough without having to worry about cash flow problems and why profits have taken a nose dive in the last six months. Unfortunately, the problem with keeping the bookkeeping and daily accounting in-house is that although your books may be in good order, your employees will lack the specialist training needed to be able to interpret the figures.
Management Accountants are trained to look at the accounts and work out what the underlying issues are. They can look at the figures and offer you strategic advice on how to reduce your expenditure and improve the performance of your business. Their advice will help you make the correct decisions, and if you are operating in a highly competitive market, this could mean the difference between success and failure.
A Cost Effective Solution
Accountants are required to undergo extensive training. You could train an in-house accounts employee, but this will cost the business time and money and there is no guarantee that the employee will stay with your business in the long term. Maintaining accounting in-house also means you will probably have to purchase accounting software, which again is an expensive investment for a small business. Outsourcing the accounting means you can take advantage of specialist skills and associated resources at a price that suits you.
Keeping accounting staff on the payroll will attract many extra costs. Not only will that person require a workspace and specialist training, but you will also have to pay them a salary and be liable for employee related costs such as healthcare insurance.
A Time Saver
Maintaining daily accounts to an acceptable level takes time and specialist training. If you are a one-man show, you may not have enough hours in the day to spend maintaining an accounts system or updating the books manually. You could do the job yourself, but your resources will probably be better spent on growing the business and exploring new revenue streams.
Peace of Mind
Outsourcing accounting gives small business owners the peace of mind that comes from knowing that their company’s finances are being looked after at all times. Should things go wrong, a good management accountant will be able to spot the signs of impending doom almost immediately so that disaster can be avoided. In trying to interpret your own accounts, you are unlikely to have the experience or training to see the warning signs, which could end up being catastrophic.
Not all small business owners will feel it is necessary to outsource their accounting, and if you have a highly trained member of staff who is capable of keeping the books and interpreting the figures, maintaining an in-house accounts department is probably the right solution for your business. But if you are currently doing your own bookkeeping and are struggling to stay on top of things, outsourcing the accounting is a sensible strategy.
About the author:
Doug Barden is a managing partner of Beech Business Services, a leading business advice and accountancy firm located in Lancashire. For more information about the accounting, payroll and book-keeping services they offer, visit http://www.beech-business.co.uk.