Many small businesses do not have their own in-house accountant so the owner or someone else on staff ends up handling that role—in addition to juggling their other primary functions in the organization. Whoever is stuck with the accounting duties already has a lot of other responsibilities, so this additional task must be done efficiently and effectively.
Or the business might want to consider hiring accounting support.
Hiring an accountant is always the first preferred method of course, but understandably some start-up and smaller businesses do not have the capital or resources to do this. Their accounting needs might also be simple enough that they can effectively do it on their own. Eliminating this cost can save the business a large sum of money upfront—but it can be costly in terms of time if the task proves beyond their expertise. It can also be costly if not done correctly.
Choosing a software program
Organization is vital when dealing with the bills and looking back at the source of the income. A majority of small businesses that do not have an accountant will use an accounting software to help keep track of records. The software is usually affordable, depending on how new it is and the features it offers. Most accounting programs will help you with invoicing, paying wages and providing regular reports. Some of the most popular accounting software programs out on the market are FreshBooks, NetSuite and QuickBooks.
Cloud-accounting software can help by quickly sharing the business accounts with associates that need access to them. Additionally, the accounting program can create charts and infographics that give a better perspective on the current financial situation. Not only will the accounting software offer a better look at the cash-flow, it will also help make cost-effective decisions even easier. Traditional accounting software is still commonly used and is beneficial—but it is outdated.
Cloud-based software is the most useful for a business without an accountant and the most reliable for keeping your data stored safely. A “cloud” is where your data is stored online. It is not on a physical device. We either used to, or still, store data on hard drives or USB sticks. Some think the cloud’s security might be easily compromised since it is not physically in your possession. However, the data that is stored on the cloud is deemed extremely difficult to breach.
A business’s accounting information can be very sensitive so it is important to consider the security of the cloud. The business’s accounting information would likely be stored in a data center, which is under constant protection all day and night. The computer’s hard drive for the business would then have more space for other files or programs that do not need high-level security.
Keep transaction records
Although, many small-businesses get paid in cash and will deposit it into their business’s bank account it is recommended that you avoid using cash to pay for bills or inventory costs. A business should pay with check or credit card whenever possible so that there is a record of the purchase. It is common to misplace receipts and nobody wants to be retracing their steps to determine where money was spent.
The benefits of an accountant
Handling the accounting job while having additional responsibilities can prove to be too time consuming and possibly costly if mistakes or made or additional consulting is required on an ad hoc basis.
Hiring an accountant will likely make your business operations run smoother and might be worth the extra investment. The accountant will lift the burden of crunching numbers all day, organizing financial data and projecting next month’s sales. Whoever was doing the accounting prior to the hire will now have more free time to do what they were originally hired for.
Not only will the accountant more than likely have more experience than you or the previous person doing it. They will get it done quicker, more accurately and can make your company more profitable by having precise projections. The tax professionals know what to do with tax return information and any other government inquiries regarding financials.
Jonathan Sanzari is a contributing writer & copy editor with Meadowlands USA. He has an associate degree in arts from Passaic County Community College and a bachelor’s degree from Ramapo College of New Jersey in communication arts, focusing in journalism. He can be reached at firstname.lastname@example.org.