There are several services or platforms that an accountant can use to help manage the financial information of a small business, especially startups with small business clients. The accurate setup of a new company is particularly essential for relying on baseline financial statements to make efficient business decisions.
Some popular services provided by bookkeeping and accounting firms include accounts receivable, accounts payable, bank reconciliation, credit sales reconciliation, monthly financial statements preparation, and preparation of accounting write-ups. Additional services offered by bookkeeping firms include payroll, small business tax preparation, reconciliation of bank accounts, and credit card statements. Small-business bookkeeping firms may handle clients’ basic accounting tasks before submitting the information to CPA firms for more complex tasks.
Tax Accounting Services
The most common reason a small business will use an accounting firm, CPA, or dedicated accounting team is to file year-end tax returns. While an important service, there are several small-business accounting services and bookkeeping software that accountants and bookkeepers can provide a business owner, even virtual bookkeeping services and online bookkeeping services such as Quickbooks Online, Quickbooks Live, and mobile apps. These can help save time and make sure the job is done right, such as tax reporting rules and deadlines for sales tax, payroll tax, 1099, income taxes, and more.
Are you planning to open several small business locations or hiring additional employees? Do you experience tax or cash flow issues? If you answer yes to any of these questions, then it will pay off to seek the services of a chief financial officer (CFO).
Professional accountants with years of experience in executive level positions in companies and corporations usually offer fractional chief financial officer services. The CFOs aren’t just for established or big companies. Even small and medium-sized enterprises need CFO services.
In a traditional setting, the chief financial officer oversees the finances of a company, analyzing financial data, reporting financial performance, monitoring costs, and preparing budgets. For fractional CFO services, CFOs provide hourly engagements for a minimum period.
Getting fractional CFO consulting services is an affordable option that a small business owner might want to consider to complete financial projections and analysis. Taking advantage of CFO consulting services offers the following benefits: improved cash flow management, reporting accuracy, establishing KPIs, and reducing overall business risks.
Small businesses need help with cash flow management, which CFO services help to speed up profit for the business. On the other hand, CFO services provide accurate reporting using helpful tools to manage performance by tracking your key business indicators to reduce overall risk.
Financial Statement Preparation
Many small business owners overlook the preparation of financial statements like the income statement, cash flow statement, and balance sheet. These are critical documents that provide business owners the financial reporting data they need to run their business. Not only can the accountant prepare these statements, but they can also help you understand the financial statements to make better decisions with your business.
Bookkeepers can enter all of a business’s financial transactions to ensure proper financial statements and that all monthly expenses are being deducted.
Bank reconciliation services help a business make sure all financial transactions are recorded in the books and alert the owner to potential fraudulent activity.
Payroll services take care of properly paying employees, submitting withholdings, and paying state and federal payroll taxes.
Every business is going to purchase goods and services from other companies. Missing a payment, paying a bill twice, or paying a bill that wasn’t legitimate are costly mistakes that many business owners make. Common accounts payable services include bill sorting & organization and making payments.
Collecting on a business’s accounts receivables faster means less cash tied up that can be used for other things. The problem is, many small businesses don’t have enough staff to manage A/R, so it takes longer to get paid, and sometimes they don’t get paid at all. Accounts receivable services will help get paid faster, boost collection rates, and ensure faster processing of invoices.
Forensic Accounting Services
Hopefully, your business will never need this service, but forensic accounting is used to find fraudulent and illegal activities, with the most frequent one being embezzlement.
Why Should A Business Outsource Bookkeeping, Payroll, Or Accounting Services?
Often, when an entrepreneur runs the business and does general accounting work like basic bookkeeping, payroll, and tax reporting, many accounting tasks take the back seat. There is only so much time in the day, and these items seem trivial to the core aspects of business operations.
Many entrepreneurs are brilliant and driven people, and they can figure out how to do most things. While many accounting software programs can help make accounting more manageable, the larger question a business owner should be asking is whether they should even be doing these tasks. What may only be something that takes a “just” a couple of hours a week could be time better spent calling more customers and closing deals or working on larger strategic tasks.
It wouldn’t be much of a stretch to say that a dedicated accountant or even part-time bookkeeper will be able to handle accounting tasks much faster than a business owner, but let’s say for entering general journal entries and paying payroll taxes, an entrepreneur spends three hours per week. An average cost to outsource the bookkeeping is usually around $25 per hour. For the low cost of $75 per week, that entrepreneur can “buy back” those three hours and focus on what they do best or call on more customers, which could easily add thousands of dollars in sales, not to mention taking the risk that errors were made. With as many tasks as the average small business owner has on their plate, just one simple mistake recording a transaction results in multiple errors through the company’s general ledger and throws off the books. We hear many entrepreneurs say they can’t afford to outsource the accounting; we see it as they can’t afford to outsource it. The other benefit is that a professional bookkeeper or CPA is there for so much more than helping at tax time. Expert advice is just a phone call or email away, so the business owner can stay focused on what they do since the financial aspect is practically a full-time job.
Outsourcing accounting and bookkeeping services also significantly improve financial records’ accuracy, which means the financial statements can do what they are supposed to do – help the business owner with strategic planning, make better decisions, and offer peace of mind! See our other article on when your business should consider outsourcing bookkeeping.