We Review All Your Options for Small Business Accounting
Ah, accounting. The word itself conveys the imperative of keeping your money in order when you have a business. Every dollar, good, and service needs to be accounted for.
Fortunately, there are several options for maintaining your books, at least one of which is sure to dovetail with your needs. So with a cheery fiscal outlook, let's reconcile ourselves to this business necessity, inventory the options, and find a balanced solution for your accounting needs!
As you review the options, consider the following questions:
1. How much time are you willing to dedicate to bookkeeping?
2. Which options can you comfortably afford?
3. What solution will give you the greatest peace of mind?
THE STASH THE RECEIPTS IN A SHOEBOX METHOD
Assets:It's simple and fast, and you deal with it at the end of the year.
Liabilities: Not having time at the end of the year.
Expenses:Stress.
Footnotes: Okay, if this is your current accounting method, it's time to upgrade. Read on!
DO-IT-YOURSELF COMPUTER ACCOUNTING PROGRAMS
Assets:Today, most popular, small-to-medium business accounting programs are streamlined and user friendly. If you are not entirely confident with a program, there are classes for specific programs at many local colleges. And, by default, doing the accounting yourself keeps you constantly aware of your business's financial health.
Liabilities: Be realistic about the quantity of billing, inventory, and paperwork you will be handling when you're deciding whether or not to take on the accounting yourself. It is time-consuming, and it will inevitably reduce the time you can spend culling business and providing goods or services.
Expenses: This will be a one-time purchase, priced between $70.00 to over $400.00 depending on your business size and needs, plus the expense of your time.
Footnotes: To have assistance at your fingertips, you may want to sign up or even pay extra for a program's telephone or on-line support.
Help forums for the various programs are rich with information. These free forums can be found easily on the programs' websites or through a search engine.
PART-TIME BOOKKEEPER OR ACCOUNTANT
Assets: You get the same reports and information, but you don't have to do all of the inputting! The time saved might be invaluable to the health of your business. A part-time bookkeeper may also work from home, alleviating your need for additional office space.
Liabilities: With a part-time bookkeeper, you will likely still be writing some checks, making deposits, and performing other daily accounting duties yourself.
Expenses: You may need to buy a computer accounting program, although the bookkeeper may already have one. The labor expense may be anywhere from $10.00-$20.00/hour. If you put someone on payroll, you will also pay payroll taxes.
Footnotes: Interview several people, and absolutely call on references.
FULL-TIME BOOKKEEPER OR ACCOUNTANT
Assets: You will have the bottom line numbers that you need to make informed business decisions, but the labor of accounting will be handled for you. This person can also be the liaison with your tax accountant, freeing up even more of your time.
Liabilities: You will likely want this person available daily, so office space will be a must. You will be dealing with all of the issues that come with a full-time employee such as health insurance benefits, vacation/holiday/sick time, etc.
Expenses: The labor expense may run anywhere from $600.00-$2,000.00/wk. The amount you pay will be determined by the workload and the skills you require. Generally, "bookkeepers" input data and accomplish all of the day-to-day accounting tasks. "Accountants" may have a more extensive education. They are more likely to be able to make financial recommendations and give you input on business practices.
Footnotes: Again, interview several people and call on references. You may also want to request that your tax accountant meet with this person before you hire them so you know that the right accounting questions have been asked.
OUTSOURCING ON-LINE
Assets: As with a full-time accountant, an on-line financial services company can accomplish all aspects of your accounting. This is done remotely, and your books can be updated daily. With outsourcing, you pay a fee and will not have to put someone on your payroll.
Liabilities: With most services, you will need to scan, fax or otherwise deliver all of your paperwork to them. That will still entail some office time on your end.
Expenses: The cost of outsourcing varies, but your location choice will make the biggest difference. For example, if you outsource to one of the many companies in India, you can essentially hire a full-time accountant for as little as $900.00 per month because of that country's low labor costs. You will pay substantially more to acquire the same services in the United States. Most U.S. companies ask for some information about your business, and then tailor your quote. Since you should never pay these companies for estimates anyway, it's worth checking this out!
Footnotes: Outsourcing gives you the added option of having all of your accounting needs met including tax preparation with the same company.
In the end, if you thoughtfully compare and consider what will best serve you and your business going forward, you will make a capital choice!
