Financial tasks can be challenging and time-consuming for entrepreneurs. But by outsourcing tasks to an accountant, you can have extra time to focus on other important areas of your business. You can also ensure your finances are accurate and up-to-date. That does not mean an accountant should do everything, though. Here are key tasks that you should and shouldn’t outsource to an accountant. But always outsource wisely to competent professionals with the best accounting certifications.
SHOULD OUTSOURCE: Taxes
Calculating, preparing, filing, and submitting your business taxes each year is a complex task. No professional entrepreneurs should be doing their own taxes, regardless of business size. Also, the bigger your business becomes, the more complicated and time-consuming taxes become. So, you should definitely hire a reputable accountant to calculate and file your taxes and give you tax advice.
If you want to ensure your tax information is in reliable and professional hands, outsource the task to a qualified tax accountant or a Certified Public Accountant. Both are highly qualified in handling tax matters and giving practical advice. For example, the CPA credential is the oldest and most respected accounting designation. If you hire a CPA, you can be sure he or she will be able to assist your business in many ways besides doing your tax returns.
SHOULDN’T OUTSOURCE: Running a Credit Check
Finding out your credit score is not a task for an accountant. Even though it involves number-crunching, you can effortlessly obtain a credit report for free. So, there is no point in outsourcing a task you can perform quickly and easily for no cost.
Most entrepreneurs need to obtain their credit scores because a credit score can help investors and creditors determine whether they are in a financial position to be able to pay them back. Investment firms, angels, and VCs often check credit scores during the due diligence process. Your credit history determines your credit score. A high score means you have the utmost trustworthiness, whereas a low score can show you are irresponsible. Score below 500, and you do not have a chance of securing an investment. If you score between 600 and 700, you stand a better chance. If you have a credit score between 700 and 800, you will likely be able to gain some form of investment. A score of over 800 means you are a credit superhero, and investment looks certain.
SHOULD OUTSOURCE: Bookkeeping
If accounting is not your specialty, it is best to outsource all of your accounting tasks. That includes bookkeeping, which involves documenting all of your business’s income, expenses, and receipts. The more your business grows, the more critical it is to outsource bookkeeping to a professional accountant.
Bookkeeping is very time-consuming. So, by outsourcing the task, you can free up time to spend on other areas of your business. But the most important reason to outsource your bookkeeping to a professional is to ensure every number adds up correctly, and every piece of information is recorded accurately. If your books are not correct, you could end up in big trouble. So, do not overlook the importance of bookkeeping.
SHOULDN’T OUTSOURCE: Getting Consultants to Help You Understand Your Business Model
There are many consultancy accountants out there who can help you with elements of your business. But one thing you should not use consultants for is to gain an understanding of your business model.
As the owner of a business, if you do not understand your business model, you are already set up for failure. No consultant can help you climb out of that hole. The only entrepreneurs that contemplate hiring consultants so they can further understand their business models are those who have little business experience. Any successful entrepreneur needs to understand the basics before launching a business.
SHOULD OUTSOURCE: Other Accounting Tasks
It is not just bookkeeping and taxes that can be complex accounting tasks. By hiring a professional accountant, he or she can help you to organize your finances at all levels and in all departments. An accountant can also give you invaluable advice to determine which areas of your business bring in the most and least amount of income.
At the end of the day, an accountant can save you time and money, and help your business to prosper. Here are just some areas of your business that should be handled by a qualified accountant:
- Balancing Ledgers: An accountant will make sure your business’s bank account statements reconcile with your books.
- Accounts Receivable and Payable: An accountant can handle your business’s incoming customer invoices and outgoing vendor payments.
- Payroll Processing: If you have lots of employees, managing the entire payroll can be a lengthy and complicated task. An accountant can relieve you of that burden by ensuring pay is accurate and given to employees on time.