You’re probably managing your daily financial workflow yourself. You may send invoices and/or create sales receipts, record payments and expenses, and document deposits. If you’re using accounting software, you may occasionally run reports analyzing profits. There’s more to be done – some of which may be unfamiliar and can take time that you don’t have.
Outsourcing some of your accounting work comes with a cost, but you might be surprised at how expensive bookkeeping errors can be. Here are some of the most common tasks that many small businesses leave to the pros.
1. ACCOUNT RECONCILIATION
Reconciling your accounts regularly is important. For example, reconciling your bank account monthly ensures that you’ve accounted for all transactions and that your ending bank balance is correct. It’s important to reconcile all balance sheet accounts in addition to the bank accounts.
Just as important, though, is the categorization of those transactions. Appropriately categorizing income and expenses from assets and liabilities can ensure the accuracy of your reports. It may even help reduce your tax obligation or the appropriate timing of your tax obligation.
If you’re still doing your bookkeeping manually, this task is difficult and time-consuming. Accounting software and websites like QuickBooks and QuickBooks Online allow you to import transactions from your financial institutions. Once you’ve done so, you can use their built-in reconciliation and categorization tools. But this is tedious, challenging work. Outsourcing it to a team that does this kind of work daily will save you time and give you confidence that your accounts are always in order.
2. STANDARD FINANCIAL REPORTS
If you’re using an accounting application, it’s easy to run reports that detail your Accounts Receivable Aging and Open Invoices, for example. You can generate these reports instantly with a few clicks and learn who you need to collect payment from, how old invoices have been outstanding, etc.
You can also summarize other valuable information, which can be vital to understand your company’s financial health and how you can improve it.
Some reports included in accounting applications perform a deep dive into your company’s finances and provide insight that can help you plan for the future and make better business decisions. Some of these include the Balance Sheet, Income Statement, and Statement of Cash Flows. While software can create these, they can be difficult to understand and analyze. Outsourcing them on at least a quarterly basis will give you a far more comprehensive look at the state of your company from a financial standpoint and help you spot both problem areas and successes.
Payroll is one of the most complex elements of accounting. Doing it manually requires an excessive amount of time and the willingness to stay compliant with government regulations. There are numerous commercial applications that automate a lot of the work, but these do-it-yourself tools only work if you’re committed to staying informed about the necessary procedures and guidelines. Noncompliance can result in unhappy employees, benefits providers, and government agencies and can trigger penalties and fines. Outsourcing payroll is advisable.
We can take on all of these critical accounting tasks for you – and more. Our firm is committed to applying our skills and decades of experience to help small businesses with their financial management. Contact us, and we’ll show you how your company could benefit from our broad range of services.