Now that the quarterly taxes have been paid, and with year-end approaching, a business can look at the plan and budget for the coming year and make some decisions and changes. Some people think of accounting firms as the tax and audit specialists who appear quarterly, annually or in an urgent situation to provide services only to disappear again as soon as the deadline is met. We think there is much more benefit to be had from accounting services, and here are 5 reasons to make the switch.
- Let the Experts do Their Job
Business owners typically handle some of their accounting work in-house. They invoice their customers, pay bills and manage cash flow on their own or delegate the work to their administrative staff. What’s the one thing owners and staff often have in common? Neither of them is an expert in accounting, and they rarely have education and training around the best way to record business transactions. This can lead to mistakes that don’t get caught until the books get turned over to the accountant at tax time, if at all. An accounting firm has staff that is educated and trained for the specific tasks that they do day in and day out, so they get it done right the first time. This way, a business owner and administrative staff can focus on their own areas of expertise.
- Real-Time Accuracy and Adjustments
For decades, businesses have used accounting software on their desktops. This required accountants to go to the business to work on-site to “clean up” the books and make necessary adjustments. It would shut down certain aspects of the financial recording while the accountant did their work since it was impossible for business owners and accountants to work together at the same time. With the evolution and transition to many financial solutions online, the accountant and the owner can both access the necessary tools to keep the finances in line. This includes accounting software, banking and credit card access, payroll and other regularly used and updated financial tools. With simultaneous access, the accountant can keep the books clean and up-to-date as the financial transactions are happening.
- The Cost of Cleaning Up Messy Books
Books done in house are often filled with small issues. When a business hands over shoe boxes of receipts, the real story can get lost. After all, if the receipt isn’t self-explanatory, then someone has to remember the purpose to report to the accountant. The good firms will be thorough – reviewing each transaction to confirm its characterization. Even if everything is recorded in software, then “journal entries”, “ask accountant” notes and simple input errors need to be reviewed and corrected as well. Each of these steps takes billable hours, and when these hours are done in a lump in advance of tax filings or during an audit, the condensed time frame will increase the cost. In addition, the business will almost inevitably waste time trying to remember the meaning of a note on a receipt six months later. Spread out over the course of the year, resolving matters as they arise instead of relying on memory, the cost in time and money will be substantially reduced, AND it increases the likelihood that the business tax returns will be filed timely at year-end as few adjustments to the books will be required.
- Timely Advice and Decisions
Nearly every business decision will have some financial component. With clean, regularly maintained books, the business owner now has current and accurate financial statements to assist with making the management decisions they make every day. An owner can see trends, identify opportunities and have a robust financial component to their business decisions. When the accountant is involved in the managing the accounting, they will have current and accurate financial statements to facilitate audits and tax planning. With the constant, critical developments in the tax world, the accountant has the business’ situation top of mind when a relevant change occurs that can impact tax planning.
But perhaps the greatest benefit to working with your accountant to manage the books is the ability to engage in real-time collaboration. In the past, many business owners saw outsourced accounting as a delayed after-the-fact required service. They tried to keep the work in-house and were more focused on reducing the cost of the service as a necessary evil. With the ability for business owners and their accountants to work together in real time, more and more business owners are seeing the relationship as an investment in their company. They can rely on their own business knowledge to make decisions with ready access to financial information that can make a huge difference.
The McGruder Group adjusts to the needs and demands of its clients, and we provide the services businesses need to stay on top of their finances and taxes. In our experience, businesses benefit from working with us as an integrated part of their financial team, creating opportunities and efficiencies through regular, diligent attention to our client’s business. If you are interested in learning more about our accounting support services, please contact us today.