Reliable financial information is critical for business growth and success. If you are a small business owner or are otherwise self-employed, you may be handling the business’ finances yourself. However, as your business grows, so does your need for different types of accounting and financial services.
The time it takes to do all of the bookkeeping, financial statement preparation and planning, payroll processing and so on will most likely become more than you can, or want to, handle. Further, unless your background is in finance or accounting, you are apt to make mistakes that could cost both time and money.
At this point, you may want to consider outsourcing some or all of the accounting services for small business that you need. An accountant or accounting firm that specializes in small business accounting can provide essential services such as bookkeeping, financial statement preparation, tax preparation, auditing, payroll services, fractional CFO services and more.
Bookkeeping is a vital part of your business. It is basically the process of recording and tracking your business’ financial transactions in the company’s books or general ledger. These records are used to monitor spending and income as well as to prepare financial statements.
Something to keep in mind is that bookkeepers differ from accountants. Bookkeepers record sales and purchases into a financial record. Accountants use financial records and data to make projections, prepare financial statements and develop insight into the company’s financial health. While an accountant can provide bookkeeping services, a bookkeeper can’t be an accountant without proper certification.
Among other things, an accountant is also more likely to know what types of business expenses are tax-deductible and which aren’t. Outsourcing bookkeeping services to an accountant or accounting firm will ensure your books are kept accurately which will in turn make tax season smoother.
Outsourced accounting services can provide small businesses with financial statement preparation. These statements serve to provide critical information to the business owner to improve decision making. They may also geared for external audiences such as stakeholders, creditors, investors and lenders, and in certain situations, may need to comply with Generally Accepted Accounting Principles (GAAP) standards.
There are three main financial statements, each covering a set accounting period. They are:
Not only can outside accounting services providers prepare these statements, they can also help the business owner understand them. They can identify problem or potential problem areas, help develop strategies to improve cash flow and analyze financial data for patterns or trends.
Many small business owners and self-employed individuals only seek out accounting services for year-end tax accounting assistance in preparing and filing tax returns. By utilizing an accountant experienced in tax rules, regulations and deadlines, they can make sure all required documentation is filed correctly and timely.
However, something to keep in mind, when utilized throughout the year, accounting services can also help by identifying tax deductions, making the correct tax payments, and improving tax compliance and efficiency. They provide peace of mind when dealing with payroll taxes, income taxes, sales taxes and paying employee wages on a 1099.
Just whisper the word ‘audit’ and most people begin to sweat. However, there are different types of audits and not all are a thing to be dreaded. Accounting services can be tailored to help business owners address these various audits. Information provided by an audit can actually add value to a company or business when the findings are used in decision making or to improve operations or security.
For the purpose of this blog, we’ll focus predominantly on internal financial accounting audits of small businesses. With an internal audit, outside accountants closely review a company’s finances to identify potential problems, ensure accuracy of financial statements, provide insights and make recommendations to improve operations. Auditors may also check for fraud, waste and financial mismanagement as well as compliance with regulations and tax laws.
Should a business owner suspect embezzlement, fraud or other criminal wrongdoing within their company, they may choose forensic accounting over regular auditing services.
Forensic accountants focus on finding criminal activity in the finances of businesses or individuals. Any criminal findings can be used in court or for further investigation and the accountant may be called to testify.
Payroll processing and management are great services to outsource to an accounting firm as they can be fairly complex and consume a lot of time. By outsourcing these services, small business owners can ensure employees are paid properly, payroll schedules are met, state and federal taxes are paid correctly, and payroll deductions or withholdings such as for benefits are accurate.
Most payroll processors use payroll software which generates pay stubs for the employees. It also provides updated financial information as well as time and attendance records for the business owner each pay period.
A Chief Financial Officer or CFO oversees the financial operations of a company and makes decisions based on the company’s financial stability.
Most small businesses don’t need and can’t justify the expense of hiring a full-time CFO. However, small business owners can still tap this level of expertise on an outsourced or part-time basis.
A fractional CFO is a top-level financial executive who is hired to provide strategic and financial guidance. They are usually brought in with a focus on helping businesses make sound financial decisions that will improve their long-term prospects.
Their duties may include meeting with the owner or CEO to discuss the best practices for company finances, monitoring cash flow and developing strategic plans to improve the company’s overall financial health.
In addition to small business owners, accountants can provide valuable insight and information to self-employed individuals. While the finances won’t be as complex as those for a small business, accounting services can provide self-employed individuals with information regarding specific tax considerations, qualifying expenses and retirement planning.
By enlisting outsourced accounting services, self-employed individuals don’t have to concern themselves with staying up to date on documentation and financial requirements or tax filings.
Inspired Accounting LLC offers all of these services and more! By leveraging our expertise, you can focus on growing your business. Outsourcing your accounting services will result in a clearer picture of your finances, increased compliance with tax rules and regulations, more transparent cash flows, possible cost savings and more. Plus, you have the added bonus of accurate, timely financial data to use in your daily decision making!
Contact us today to move closer to financial peace of mind!