Monthly Archives: March 2016

Should I Outsource All or Part of My Business Accounting?

A question I get often is whether or not to outsource parts or all of my companies accounting. I’ve put together a video presentation to discuss the subject. Please take a look if you have a few minutes.

All functions of a business’s accounting system is outsourceable. We can certainly outsource all or part of the accounting system. We work with the management of a business to determine what services they are comfortable with and desire to do.

We find that in many cases when a business starts out they want to save professional fees and perform some of the routing accounting tasks and as the business progresses they want to focus their own time on running their own business and rely more on outsourcing.
Businesses can outsource Transactional functions

-Billing Accounts/Receivable – We prepare the customer invoices and send them out – Payments can be made ACH or credit card and we can maintain the receivable account and record the payments.

-Accounts Payable – The client can faxes or emails their vendor invoices – we set them up for payment – the business owner or appropriate person receives a notification allowing them to logon and approve the payments and then ACH payments are sent out.

We maintain a company’s general ledger and make the appropriate accounting entries. We track the fixed assets and reconcile the bank accounts.

We prepare financial statements – an income statement and balance sheet for the company’s management and work with them to help them understand the numbers

Tax compliance we prepare all necessary sales and use tax returns the property tax returns and income tax returns

In addition to the transactional accounting functions business outsource strategic accounting functions as well.

Strategic functions include Forcasting, budgeting, Management reporting and Tax Planning.
When we are performing the day-to-day accounting tasks and continuously monitoring the performance of the business – this facilitates the strategic functions – we can make adjustments to the budget. We can set performance goals and we can monitor them.

We can also ensure that the proper amount of estimated income taxes are paid in so that the client doesn’t have a big surprise at the end of the year.

What is Outsourced Accounting?

I’ve videotaped a short video describing outsourced accounting. Please take a look if you have a moment. We can help businesses in a wide range of circumstances free up resources and take accounting related headaches off their plate.

This is the process of outsourcing the accounting and reporting function to a qualified accounting firm. Many businesses know that their system is flawed they know it can be done better – and they want better information to help them understand the financial performance – they just don’t know how. Businesses are good at what they do – they are not all accountants, and they don’t want to be and like most small businesses, they don’t have the expertise or the resources to hire a full time accounting staff.

This is where We step in. We have the experience and tools to help. We take over any or all of the accounting tasks – We can invoice customers- pay the bills- reconcile bank statements-prepare financial reports-and meet with the owners to help them understand the performance of the business and make plans for the future. This way the business does not have to maintain accounting personnel or software. And it takes away the stress of worrying if the accounting is done correctly.

What is the Accounting System Checkup

Please take a moment to view my video on the Accounting System Checkup and give me a call or shoot me an email if you have any questions or would like to schedule a checkup.

It is a scenario that I see way too often:

Many businesses purchase an off the shelf accounting system – the business owner or an employee sets up the software or maybe they hired a temp. They pop the disk in the computer and begin to answer the setup questions the best they know how.

Each one of these questions are designed to tell the accounting software to do something in the accounting process. The person setting up the software doesn’t have the accounting knowledge or the overall understanding of the accounting process so they just accept the default answer and move on to the next question.

An employee – maybe a dedicated accounting person – maybe someone who has other duties and only does accounting part time they enter transactions. They prepare customer invoices and they pay the bills. They may miss a few steps – they may or may not reconcile the bank accounts.

Then what they have is an accounting nightmare. The income is over stated – the balance sheet doesn’t balance – the bank balance is not accurate – and the information provided by the system cannot be relied on to understand the activity of the business.

We provide an accounting system checkup –Look at software, processes, people determine what services we can offer to improve overall accounting system. – We meet with the person or people performing the accounting tasks – We look at the reports that are prepared by the system and then I talk to the owner or managers who are using the reports and We look to see how the accounting information is being used to run the business.

The purpose of this service is not to provide any assurance on the accounting process, but to recommend technology and process solutions to help them run a more efficient and effective accounting system. We provide a report that shows the strengths and weaknesses of the accounting system and We benchmark the results against other similar businesses. Then we show them how an outsourced accounting solution can provide reliable financial and accounting information and provide that information in a timely manner.