You don’t need to be a CPA to stay on top of your business finances.
However, outsourcing accounting isn’t the best decision for every business owner. Many entrepreneurs find that reevaluating their bookkeeping needs is important. There is no one size fits all approach when it comes to accounting and recordkeeping and therefore it is important to know about the advantages and disadvantages to outsource accounting.
A great accountant can help you focus on reviewing your numbers, as opposed to making accounting entries yourself. If you hire a bookkeeper, he can perform a host of services for you, including recording transactions for sales or payments, preparing financial reports, issuing invoices, or reconciling bank accounts.
Suppose you are dealing with a high volume of transactions or complex accounting such as sales tax or payroll. In that case, you may particularly benefit from hiring a Bookkeeper and outsourcing the payroll function.
Should you be a sole proprietor starting out with a manageable volume and easy transactions, you could do your own bookkeeping before submitting everything to a tax professional. This also applies when your business is still a hobby.
There are a few reasons you may choose to outsource bookkeeping as opposed to attempting to deal with everything yourself. Maybe you don’t have the time and energy to learn about bookkeeping or don’t want to hire an in-house bookkeeper until your business grows.
Suppose accounting is not your favorite part of being a business owner. In that case, you may consider hiring a freelancer or CPA firm to help you with your bookkeeping needs.
Doing your own bookkeeping will make you feel more connected to your finances. And your relationship with your numbers will be one of your most important business relationships to form.
Keep in mind though: when your business grows, it is often most efficient to hire a bookkeeper and free up your time.
Further reading: 10 Tasks Successful Entrepreneurs Outsource to a Virtual Assistant