Large businesses and corporations are able to afford a separate accounting department, but small business owners and entrepreneurs are usually tied down with this responsibility, along with a myriad others. The number one reason why entrepreneurs never opt for professional business accounting servicesis the reason why they actually should be investing in such a facility: costs. This leaves them as a jack of all trades and
master of none, typically because with a new set up or small enterprise, the owner is likely to take up all roles.
Consider the following benefits of using a professional accountancy service:
Without inquiring about various payroll packages offered by such companies, small business owners write-off the possibility, assuming that these packages are practical only for larger businesses.
Fact is, that business accounting services are a blessing for small business owners – not only do they reduce the cost of doing business, there is also potential of independently increasing revenues and profits.
Specialized Business Accounting Services
Businessmen who opt for payroll services are able to reduce their in-house accounting costs. This is because the cost of hiring an accountant to manage payroll and other practices is prohibitive. This can be calculated by spreading the cost over the number of employees in the firm, particularly if there are less than 20 employees in the firm. Likewise, if the owner is managing the tab himself, the opportunity cost of the hours spent in this task is better utilized in pursuing leads and other lucrative opportunities; that can potentially drive revenues up.
Business accounting services are able to keep these costs low for several reasons. First, because of their expertise in this area, they are able to record and conduct transactions faster. This saves much of their time and thus money. As a result, they are able to achieve economies of scale which are passed on to their clients in the form of affordable packages.
On the other hand, if the owner attempts to hire an accountant, several weeks are wasted in training and explaining unique business processes. The cycle is repeated frequently as a result of high employee turnover, which constantly increases associated expenses.
Increased Accuracy and Compliance
For entrepreneurs untrained in this field, there might be several hits and misses whilst recording transactions. Tax and other accounting laws are different for all industries and across states, and this is where serious confusion may arise. At this stage, mistakes can be costly, not only if employees sue the business, but if there are errors in calculation of taxes, the dreaded IRS is likely to be on your toes. It is not uncommon for small businesses to fail because of unintended errors. In this case, heavy penalties can be levied that can almost bankrupt the business.
Due to the possibility of strict consequences, a small business owner has two options: to hire a professional accountant, or to outsource this task to an accounting firm. Of the two, the latter option is bound to give a higher return on investment.
Another factor that tilts the balance in favor of business accounting services is the need to incorporate new programs and software in accounting. No aspect of life has escaped from the modernization of technology, and the same is applicable to businesses. Unfortunately, these platforms are not cheap, and their free versions offer limited functionality. A firm that provides accounting and payroll services is likely to factor these costs in its package, by apportioning them to their tens and hundreds of clients.
First-time small business owners encounter stressful situations and often need professional guidance related to industry practices, and also on how to reduce costs and enhance profit margins. A business that provides accountancy services has a wealth of information and experience at their disposal. As a result of their business association, an entrepreneur is able to take advantage of these resources to improve their own functions.
There is a reason why most DIY jobs result in a disaster. The same applies to business accounting. In cases where it might be too expensive to have an in-house team, an accountancy service is the best alternative since it has the ability to pay for itself in terms of reduced business costs and increased profitability.