When to Outsource Your Business Accounting

When to Outsource Your Business AccountingEvery business owner understands the importance of maintaining accuracy in business accounts and payroll administration. And yet some organisations, especially small businesses, take risks when it comes to their accounting practices by doing their own business accounting. These are some indications that you should consider outsourcing your business accounting.

1. Losing vital time to accounting work

Some business owners who do their own accounts and payroll find that they are losing valuable time that could be better spent on growing their business. While some business owners are trained in accounting, others lack the core skills to ensure that their reports and records are done properly.

Losing valuable time and struggling to update your own accounts is a good indication that you should consider hiring a freelance or contractor accountant for help. The extra free time could be spent on valuable activities such as marketing and exploring strategies for growing your business.

2. Errors and delays in records and compliance

Clear, accurate and timely records are absolutely vital for decision making and operations. A business that is encountering errors or experiencing delays in compliance or records should consider outsourcing their accounting and payroll. These delays can lead to poor decision making, customer service errors, compliance errors or even penalties such as fines from the tax office.

3. Lack of in-house expertise

Another indication that you should outsource is if your organisation lacks the requisite expertise in-house. Tax laws and regulations are subject to constant change, and keeping your financial records and paying your staff correctly requires awareness of these changes. Note that an accountant can also serve as a strategic advisor by assisting with advice on any issue from staffing and expansion to compliance and tax.

If you do not have a dedicated bookkeeper, account administrator or accounting department, you may find outsourcing to an accounting firm to be highly advantageous. An external accountant can prepare your tax returns on your behalf, ensure that your internal financial reports are accurate and consistent for better decision making, and retain accurate records in accordance with legal requirements.

In the event you decide to sell your business or find investors for your business, you will need to provide accurate reports.

4. Risk exposure

You might already be aware that you are exposing your business to a higher level of risk because of poor accounts and payroll work. Loss of time, poor records and lack of in-house expertise lead to higher risk in all areas of your organisation.

While you might consider the additional services fees to be an expense, in reality they are likely to lead to cost savings due to better compliance and lower risk for your organisation. The fact that you will have access to more accurate reports is another reason why it is usually economical to outsource your accounting.