When you’re just starting out with building your business, it’s not uncommon to manage your own accounts. After all, when you’re the only employee, you only have a handful of clients paying you each month, and you only have one account to keep track of, bookkeeping can seem incredibly simple. As your business grows, however, that can change quite quickly. Keep reading to learn a few signs that indicate it’s time to consider outsourcing your business’s bookkeeping.
You’re Falling Behind on Tasks
As your business gets bigger, you naturally get busier. There are a lot more tasks that demand your attention, and bookkeeping can fall by the wayside as issues that feel much more pressing come up. You may end up with stacks of invoices and payments that need to be entered into your accounting software, telling yourself that you’re going to get to them eventually; or, you may be keeping up with your bookkeeping and falling behind on other tasks that are essential to the daily operation of your business.
Either way, your business suffers from your divided attention. If you find yourself falling behind because you just have too many tasks on your shoulders, outsourcing your bookkeeping can lighten your load and give you more time to focus on running and building your business.
You’re Struggling to Scale In-House Bookkeeping
Many business owners opt for in-house bookkeeping when their business’s accounting needs expand beyond their own knowledge and capabilities. This can seem like a good idea on the surface, but for a growing business, scalability is always a major concern. Your bookkeeping needs can change drastically from one month to the next as you gain and lose clients and major contracts. You may find yourself without enough accounting staff to handle all of your bookkeeping needs, or you may have the opposite problem, with accounting staff filling chairs in the office without much to do.
In fact, a recent study from the General Auditor Information Network found that the average in-house accountant provides their employer with approximately 1,400 hours of productivity each year; however, the average worker is in the office for about 2,090 hours each year. This means that you’re likely paying each accountant on your staff for 690 non-productive hours every year—and that number could be much higher if you’re struggling with scaling problems.
Outsourcing your bookkeeping allows you to scale your accounting needs at the drop of a hat. If you win several major contracts, you don’t have to worry about your bookkeeper being able to keep up with the increased accounting demands; conversely, if you have a slow month, you won’t be paying an in-house accountant for unproductive hours. Third-party bookkeeping services ensure that you get the accounting services you need, when you need them, and never pay for more than that.
You Need Some Expert Advice
Even though most business owners are financially savvy and tend to be detail-oriented, the fact remains that most simply aren’t trained financial professionals. Doing your own bookkeeping means giving up access to the knowledge and experience that a professional accountant can offer you. A professional can maintain your books with a higher level of accuracy, and without any concerns regarding conflicts of interest. Furthermore, by outsourcing to a third-party accounting firm, you’ll gain access to the knowledge and experience of not just one accountant, but the entire team. If a complex issue arises on your books, you can feel confident that someone on our accounting staff will have the knowledge and skills needed to handle it effectively.
You’ve Started Handling Government Contracts
If you’ve expanded your business into the field of government contracting, then it’s essential that you work with a third-party accounting firm that is familiar with the compliance standards outlined in FAR and DCAA. All government contractors must adhere to a lengthy list of requirements pertaining to their accounting practices. Maintaining this compliance on your own is extremely difficult, and not something that you want to leave to chance; when you’re audited and found to be noncompliant with any of the many federal government’s many accounting standards, you can lose your good standing as a government contractor and miss out on future contract opportunities.
At Peter Witts CPA, we specialize in working with government contractors, and have the knowledge and experience needed to help you become and remain compliant with federal accounting standards. Contact us today to learn more about how we can help your business with your bookkeeping and accounting needs.