Congrats! You’ve taken a hard look at your business operations and determined its time to invest in some guidance on the accounting end. Perhaps sales and revenue are on the up, you are getting bigger and it’s time to get organized and grow things to the next level. Or maybe it’s just time to give your small business a method of understanding where the money goes and why.There are a multitude of classic methods to employ when it comes to financial accounting, but that doesn’t mean they are the best. Understanding what you are truly getting is an important piece to know where to invest your money. Let’s take a look at the common solutions business owners seek when taking care of the accounting piece of the puzzle.
Do It Yourself
It’s quite common for most new business owners to go this route. The mindset that got you to take the risk of opening your own business likely gives you the same gumption to take a crack at managing your own books. Just download some small business accounting software and go. Stop. This can get messy, quickly. Not only from a time perspective, but from a potential tax and fines perspective. Chances are your time is being stretched a lot. The priority will always be running your business, not getting into the numbers’ weeds. This may seem like an excellent way to get to know your numbers and save money, but it’s not.
This is a ton of added responsibility in an area you likely are not comfortable in. Your time is better served hustling in your field and generating more revenue to cover the cost of a professional to handle your financial world.
Hire A Bookkeeper
A diligent bookkeeper will hum away at making sure you are logging what you are doing and keeping your business up to date on payments. Many choose this method and think it’s a great combination of affordability with some accounting services benefits. Bookkeepers can run from about 20ish to 30ish dollars an hour and will likely be working on an hourly or freelance basis. If they are working hourly, they are also splitting their time with other clients, which means efficiency may suffer.
Bookkeeping is typically a culmination of ongoing logging and maintenance, not growing. The value tends to be limited.
Hire A Full Time Accountant
The entry level salary of an accountant is about $60,000 per year. That’s just a base salary. That’s not including the other bits and pieces - benefits, payroll taxes, etc. An accountant is not going to have spent a hard, four-plus-years in college to accept a job for base pay without benefits. Be prepared to invest top dollar to add a high quality member to your team. Especially if they are a CPA. Most start ups can’t afford that, and quite frankly, you probably don’t have enough work for a full time accounting pro. Typically this person will not have your strategic vision in mind. They lack advisory acumen and are not very experienced in handling day to day accounting situations. Entry level accountants will do administrative tasks or support other aspects of the business, such as operations. While helpful on the admin side, it is not the best investment in your financial future.
Retain An Accounting Firm
Most accounting firms are tax focused. They dive into your books to see the past and analyze what is (or once was) in order to save you money at tax time. Since they are typically brought on to file taxes, they are also the busiest during this time. This means you miss out on the tax advice and expertise when you need it the most. Chances are the work is being delegated to a junior member of their operation anyway.
The nature of doing taxes is looking backwards. While the tax savings may seem like a good thing short term, it’s not helping you grow your business. Growth and improvement happen looking forward. Good financial planning takes forecasting and driving toward your goals, not obsessing over what once was.
Is there a way to reap the benefits of these standard solutions and not spend a fortune? Yes.
Just like you can outsource construction projects and your website hosting, you can outsource accounting. This is where the magic meeting of cost savings, expertise and forward thinking combine.
An average cost of using Accountfully as your outsourced accounting firm could be just $24,000 per year. This is a fraction of your full time accountant, more expertise than your bookkeeper and we are way cooler than your classic accounting firm. We are a personalized team of accountants, bookkeepers, controllers, CPAs and CFOs. We are professionals in the entrepreneurial and start up scene and can help navigate complex inventory.
We take intricate concepts and make them clear and understandable. We use intuitive “non-accountant-y” programs to show where your money is going and what it can do for you, using charts and graphics to predict outcomes, not puzzling spreadsheets. This is great for the business owner’s understanding and it is a major win for promoting the business to investors.
Our focus is not just day-to-day accounting tasks. It’s growth and development. We love seeing success and allowing our clients to get out of the books and into the shop, kitchen or studio to focus on their passion. We don’t just calculate and crunch - we are a collaborative team who analyzes, communicates and guides.
Let’s talk and see where Accountfully fits into your operation. We bet you’ll come away from a call with a lot of insight into what the possibilities are.