Staying on top of business accounting is easier said than done for small business owners wearing multiple hats. When resources are running thin, bookkeeping tends to take a back seat until tax time rolls around. Leaving ledger updates until the last minute is a leading cause of cash flow problems, bookkeeping errors, cost overruns, and missed deductions. That's why over one-third (37%) of small business owners outsource accounting services.
Read on for the top five benefits of outsourcing bookkeeping and part-time accounting services.
Dealing with government regulations can be daunting. Part-time accountants (also called fractional accountants) are well-versed in compliance standards. This includes adhering to tax codes, industry-specific reporting standards, and regulatory requirements for generally accepted accounting principles (GAAP). These rules constantly change, making compliance a moving target that requires accounting experience to steer clear of any legal issues.
Part-time accountants help companies stay compliant by:
Outsourcing accounting experts for compliance will keep the CRA happy and help avoid time-consuming audits. On the off chance an audit does happen, there's already a solid paper trail of financial transactions and records to navigate the process with minimal headaches.
Hiring a full-time accountant on staff will cost around $60,800 per year in Canada. This doesn't even include other expenses for employee benefits, payroll taxes, employee insurance, and recruiting. These costs can add up quickly and put a strain on finances, especially for smaller operations with limited cash flow.
Outsourcing accounting tasks eliminates costs incurred by full-time employees. Part-time accounts are hired on a part-time or project basis and tend to work remotely, which removes the need for physical office space and equipment. Reducing these costs can save up to 40% on overhead expenses that can be reallocated to other essential business operations.
Managing business finances on your own can save some money in the short term, but even minor mistakes can end up costing more in the long run. Not to mention some hefty fines for mishandling expenses. It's much cheaper to get bookkeeping right the first time around.
Part-time accounting services provide access to experienced financial professionals who can identify and prevent bookkeeping errors from turning into surprise tax bills. Additionally, outsourced accountants often use automated bookkeeping software to record and reconcile every entry into accounting ledgers. This technology helps minimize miscalculations and missing entries that can occur during manual bookkeeping.
Logging daily transactions is a tedious task, particularly for smaller operations with limited bookkeeping experience or resources. Outsourcing accounting functions can reduce the workload of financial management. These business accounting experts can handle day-to-day bookkeeping tasks, including accounts payable and receivable, bank reconciliations, and payroll services.
Most part-time bookkeepers also use cloud-based accounting software to streamline business finances. This software allows external accountants to manage and monitor financial records remotely. It also gives business owners real-time access to financial statements that provide insights into performance and projections.
Outsourcing accounting services offers flexible financial management to accommodate fixed or fluctuating budgets. Part-time accountants can adjust hours for seasonal changes or special projects, like reconciling transaction records. This means you're only paying for services when they're needed instead of footing the bill for a full-time bookkeeper.
Part-time accountants can also help centralize financial tasks, eliminating the need for multiple departments. On top of cutting more overhead costs, centralized accounting processes make financial reporting more consistent and reduce errors from multiple people handling accounts.
When it comes to finding reliable part-time accounting services, use reputable job sites or recruitment firms. Search for candidates with accounting and bookkeeping experience, designations, and industry-specific knowledge.
Need help finding part-time accountants? We offer free consultations with financial experts who can help select qualified fractional accountants based on your business needs and budgets.
