Running a small business is like a full-time job, except that there is more pressure on your shoulders and ‘full-time’ can feel like sixteen hours every day. Going off of that, small business owners often wear multiple hats aside from being the owner, and this could mean doing many of the processes, including accounting, on your own.
However, keep in mind that accounting is a tedious process that requires utmost attention. A single mistake can cause detrimental delays in operations, significant financial losses, or worse, legal trouble due to tax errors. To avoid these consequences, outsourcing to a small business accounting firm is the best option if you can’t hire a full-time employee yet. But how do you know if you’re at the point where your business actually needs one?
Here are the signs to look out for:
1. Too much time is going to accounting processes
As you probably know by know, accounting is a time-consuming process, even with the advanced accounting technology available nowadays. In fact, learning how to use these technologies can take days, or weeks even, to truly master. On top of the actual accounting processes, and you may not have enough time to handle it all. Moreover, having employees who are not experienced with accounting share some of the tasks is not always a reliable option.
If you find yourself having to work overtime just to get accounting tasks finished, aside from your other duties as a small business owner, it’s a clear sign that you need to have at least one individual dedicated to performing all the accounting processes for your business.
2. There are a lot of accounting delays
Accounting is one of the many aspects of business that cannot be delayed, lest it delays other parts of the operation. For example, if you can’t get vendors paid on time, you won’t have enough supplies to keep the business going. And if payroll is always late, you’re going to have problems retaining employees that depend on their wages or salaries to live.
If your business always runs into accounting delays, or if there is no one to fill in for your only accountant when they go on leave, take advantage of outsourcing services to fill in the gaps and make your financial processes more efficient.
3. Your accountant cannot handle all of your needs
Say, you have one accountant on your payroll that is responsible for handling the entire financial side of the business. If they seem to not be able to manage everything by themselves, it is not necessarily their fault; after all, one can only do so much given the amount of time they work every day.
In this case, your accountant may need extra help, and outsourcing accounting services is a great option if you cannot hire another employee yet. If budget is a concern, you can opt for part-time services or only the services you need to only have to pay for necessary expenses.
4. The business is growing too fast for you to keep up with
Steady and fast growth is a sign that every other aspect of your business needs to step up, particularly when it comes to accounting. With more sales coming in, more orders filled out, and invoices to deal with, you would need to upgrade your accounting department to keep up with the demand.
If your business is growing too fast for your current team to keep up with, your first option is to hire a full-time accountant to relieve part of the workload. But if you don’t want to risk taking on another employee only have to face stagnation afterward, you can fill in the gaps by outsourcing to an accounting firm first. Then, once you determine that you can afford another employee, that’s the time you should hire one.
5. There are too many unnecessary expenses
For small businesses, every penny counts. So, if you’re spending too much on unnecessary expenses, but don’t know what exactly those expenses are and how to get rid of them, you need an accountant to go over your records. If you don’t have an accountant in-house, however, you can hire one on a temporary basis through outsourcing and enlist their services until you fully optimize your expenses.
These are just some of the signs that should point you in the direction of outsourced accounting services, but they are, by far, the most common for small businesses. That said, if you notice even just one of these signs, you may need to hire an accountant ASAP to make more efficient use of your time, money, and people.