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Archives for July 2014

Outsourced Accounting: A Winning Strategy For Small Businesses

Small Business Accounting

A small business owner recently explained that they were going to have to replace their part-time retiring bookkeeper. The employee worked three days each week. I was puzzled—the time spent seemed excessive, and likely a waste of resources for a very small firm.

I suggested an experiment: When the bookkeeper departs, why not try outsourcing your small business accounting? My guess is that it would take a few hours a week, rather than days.

They agreed to give outsourcing a try. Six years later, they are still happy with that decision. Here’s why.

Benefits of outsourcing accounting functions

Think about why you started your company. Whether it was a niche idea or a needed service in a new location, it probably wasn’t to pour over cash flows and payrolls.

  • Your company and its customers are best served by your spending time on your product or service—producing it, improving it, marketing it, selling it. It’s more efficient to leave the accounting to a partner with expertise in accounting and a trusted reputation.

The world of business accounting changes rapidly. It used to be that the best accounting tools only showed you a snapshot of how your company was doing that day or month or year-to-date. Now, advanced e-tools allow you to see the big picture—cash flows, yes, but also forecasting and other analytics that help drive ongoing budgeting (and, if you run a nonprofit, help drive fundraising).

  • Partnering with an expert is key to a deeper understanding of the fiscal health of your company, now and in the foreseeable future.

Speaking of changes, many senior managers now are equipped with mobile devices as well as computers. Aren’t there times when there is a need to consult on a budget item on one of those mobile devices while out of the office?

  • Outsourcing your accounting enables you to partner with experts who can provide the people you designate with access to your company’s financials on any device.

Think about the costs and sheer time it takes just for the accounts payable and receivable functions. One study puts the average cost of paying one bill, including staff time, at $92. And a Forbes report goes much further, citing the exponential benefits of outsourcing more of the company accounting functions:

“‘One simple example is accounts payable and receivables,’ says Jag Dalal, managing director of thought leadership at the International Association of Outsourcing Professionals (IAOP). ‘If you outsource only one function, you limit your benefits. If you outsource both, you get a value beyond improving the transactional component because the outsourcer can see when cash comes in and goes out. That can help the company take best advantage of the cash on-hand and optimize internal processes.’”

  • Outsourcing advantages include partnership with a team that has the expertise, technology, and staffing to manage all your accounting accurately, while still providing the flexible access you require. The bottom line? Money saved on accounting functions with no loss of efficiency or accuracy.

Is your company growing? That’s the good news. If you have not yet outsourced your accounting, then keep in mind that managing the company’s growth includes the scalability of the current in-house accounting functions.

  • Outsourcing is a great solution for growing companies because the scalability is built in. You purchase the level of services you require.

The outsourcing solution

From whatever angle you look at it—staffing and expertise, allocation of staff time, changing technology, cost savings, flexibility, scalability—outsourcing accounting can provide the broadest, deepest, most accurate picture of the financial health of your company with the least cost and highest efficiency.

After all, spending more time on your product or service, and your customers, is the winning strategy.

A&B Accounting and Business Solutions, LLC is a trusted, responsive, and reliable firm that can assist small and medium sized companies with the full range of expert accounting services. For more information, please contact us.


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NEW Tax Laws to Discuss with Your Small Business Accountants

Do you stay on top of all the existing and proposed laws that impact your business?  Have your Small Business Accountants proactively reached out to you about the changes introduced in 2012 will begin to take effect in 2014? Several new laws and extension of old ones are now in force and will be reflected in your the filing of your 2014 taxes.

Finally realizing that small businesses are the key to a possible economic recovery on main street, the Ways and Means Committee of the U.S. Congress has drafted a bill aimed at bolstering small businesses.

The bill is designed to “strengthen the economy by helping small businesses expand operations, hire new workers and increase wages and benefits.”  

Here are the key provisions of the draft bill:

  • Allow businesses to immediately deduct expenses on building and equipment up to $250,000.
  • Simplify and expand the use of cash based accounting. The current regulations are recognized as being overly complex.
  • Provide a unified deduction for start up and organizational expenses
  • Ease compliance by changing due dates for tax returns

There are also a wide array of separate provisions for Sub Chapter S and K Corporations and Partnerships including regulations that relate to how long a C Corporation must wait until it can convert to a Sub Chapter S, an increase in the amount of income that can be passive for a Sub Chapter S, repealing the rules that guarantee payouts to Partners, and many more.

Of course not all of these provisions may be in the final bill, but it is definitely worth reading this draft in more detail and discussing it with your Small Business Accountants.

Please contact us at A&B Accounting and Business Solutions if we may be of service helping you understand how these and other laws impact your business.


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