Accounting For Everyone: Alternatives To In-House Money Management

Accounting For Everyone: Alternatives To In-House Money Management

As a business owner, it’s important to have your company’s finances under control, but logistically, this can be a challenge. Maybe your business is too small for a full accounting department, too big for basic software, or simply short on the knowledge needed to manage your books successfully. Under such circumstances, you may wish to consider alternatives to in-house accounting to help you out. 

Every business needs an accounting solution that fits their specific needs – and there are plenty of options to choose from. Among the small business set, these two primary options are typically the most popular, offering great organization for a reasonable price.

Let It Go 

Setting up an accounting department, or even hiring a single full-time professional, can be costly for a small business. If you directly employ an accountant, you’ll need to supply the software, provide office space, and pay for employee benefits and payroll taxes. Ultimately, you’ll spend a significant amount before the accountant has even done any work. For cost reasons alone, many companies choose to outsource their financial management needs.

Another reason small businesses often outsource accounting activities is because the company is too small for the full-time services of an accountant, and many accountants aren’t interested in a part-time position without benefits. Rather than pay an individual for time they aren’t working, the businesses choose to send the work out to a dedicated accounting company. 

Software Success

There are many accounting software solutions on the market today, with some better suited to business management than others. Before settling on one, it’s important that you do your homework. With a very small business, for example, appropriate software options include Harvest and Wave Accounting, but if you expect your business to see significant growth, it’s best to skip these in favor of a more powerful program.

QuickBooks is a universal favorite for business accounting, and for good reason. Since it’s both powerful and popular, QuickBooks is easily integrated with other business programs for better management. Used correctly, the program is also a timesaver, eliminating the need to enter data twice, and putting the most important financial tools right at your fingertips.

Key Considerations

Before choosing an accounting method, all businesses would do well to consider the worst-case scenarios and how they would handle them. With outsourcing, for example, companies have been known to prioritize cost over quality, assuming that all accounting services are essentially equal. Then, when something goes wrong – a check bounces or the tax audit comes back with errors – they try to pass the blame to their chosen accounting firm. Under such circumstances, it’s important to remember that you chose the company and you are ultimately responsible.

Similarly, if you tend to be controlling about how work is done, and you think outsourcing work will help you save time, you need to think about how much effort you’ll put into communication and double checking the work of an external company. Would you save more time and have greater peace of mind if you chose to hire someone internally, whom you could check in with regularly? Using your time wisely is important, and outsourcing shouldn’t cause you to spread yourself thin. 

Though at times it may seem like an external function, at the end of the day your business is only as successful as the accounting department. Go with an option you can trust, and don’t be afraid to invest in quality software and knowledgeable staff. Saving money through outsourcing works well for some, but having that extra degree of control matters more to others, and you didn’t get to this point in your career by compromising on core business practices.

 


About the Author

John Rampton is an entrepreneur, investor, online marketing guru and startup enthusiast. He is founder of the online payments company Due.

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