As an owner of a small business you wear many hats. Your role as owner, principal, president or CEO commonly includes human resources, operations, business development and customer service. As you grow, there are typically inflection points that warrant review of how you are effectively and efficiently ensuring all primary functions are getting done. When it comes to accounting and bookkeeping, are you confident you have the best solution in place to effectively and efficiently manage your business?
There are 3 primary options to handling accounting and bookkeeping services for your business.
- Do it yourself.
- Hire someone.
- Time. Everyone who has built a successful business quickly realizes he or she needs to prioritize where their limited time is spent. Doing everything yourself is not scalable. So, ask yourself, is devoting your time to bookkeeping and accounting services the best use of your time to manage and grow your small business?
- Cost. As a business owner, everything has a cost, whether it is a direct cost or an opportunity cost. If you have chosen to complete your small business bookkeeping and accounting services up until now, ask yourself: How much time are you spending monthly on these related activities? What other areas of your business could you be working on?Example: Fin is a small business owner who spent one hour each week on accounting and bookkeeping services. At the end of each month he spends a total of four hours performing such tasks. Fin is an engineer by training and runs a fast-growing small business. He wished he had those four hours each month to work on product development.
What is the opportunity cost to your business when you are updating account balances and reconciling bank statements for four hours a month like Fin?
Hiring may be an option you consider. So, then the challenge is adding someone to payroll and trying to recruit the right person who has the skills you need to get the job done. To go down the hiring path, you need to ask yourself the following:
- Do I need someone full-time?
- Do I want to add an employee and the associated costs of adding an employee?
- Am I confident one person has the skills and expertise for my small business accounting and bookkeeping needs?
Outsourced accounting and bookkeeping services have defined costs. There may be an initial period of clearing out backlog and set up. After that initial time period, outsourced bookkeeping and accounting typically then offers a fixed amount for ease of forecasting and budgeting. Going this route, you as a small business owner, eliminate the opportunity cost of doing the work yourself and also eliminate employee-related expenses of hiring including managing an employee, overhead and compensation. You do add direct costs to your P&L with outsourcing accounting services.
- Value. The choice of doing the accounting and bookkeeping services yourself, hiring or outsourcing usually comes down to a value decision. As an owner of a small business (one to ten million in revenue), what is of highest importance to you in growing your business:
- Minimizing expenses.
- Maximizing value.
If value maximization is important to you, it is likely that outsourced accounting and bookkeeping is going to be a wise solution for you to further evaluate. Like anything, not all outsourced accounting and bookkeeping services are the same. They vary in costs, processes and level of personal interaction. With artificial intelligence, a trend is to fully automate such services. At FinAccurate, we believe in the value of automation combined with the power of personal interaction.
If your business is growing to the point of your evaluating what decision is the best, we at FinAccurate welcome the opportunity to speak with you. We are happy to help you make an informed decision that is best for you and your business.