As a small business owner, you will be used to keeping an eye on your expenses at all times. You know that it falls to you to ensure that your business remains in the black, your accounts are kept up to date, and that you have everything in on time.
The problem is that accountancy in itself is a job. This means if you are taking care of the business and the accounting, you are spending precious working hours on a task that can be done better if outsourced. Yet, hiring an accountant can become a decision that is too difficult to make. When is the right time to outsource to an accountant?
Over time your business is going to grow beyond requiring some simple bookkeeping. Your time is more valuable and better spent in other areas of your business.
Let’s consider some of the indicators that will show that you need to move to outsource your accounting.
Even if you buy the latest accountancy software, you aren’t as experienced as a professional is at handling it. And, it is an expense to purchase it, renew it and keep it updated. As well as the time it takes to learn the process and how to generate the reports you need. Outsourcing to an accountant guarantees that you aren’t going to need expensive software or technology – unless you want it.
If you don’t have the time to dedicate to your monthly accounting without cutting time from somewhere else, then this is a sure-fire sign that you need an accountant. Outsourcing to an accountant gives you the time to do what you do best.
If you do happen to have an accountancy or financial background, then you are in the lucky few who are able to handle your own finances for a longer period of time. If it can comfortably fit into your schedule and you have the skill to take care of it, then do so for as long as possible.
When you start making a regular large income per month, then that is a good time to outsource to an accountant. For a small business, you can expect to pay as little as £500 a month, sometimes less. Business expenses that make your business run more smoothly are always a wise investment. It means that all of the details that usually take up valuable time are done to a professional level by dedicated people.
If you have paid too much tax in the past, or are worried that you haven’t completed the forms in the correct way previously, then you will know that tax time can be worrying. But something that is actually pretty important is there are many tax breaks that are suited to smaller businesses, credit programs, and relief that many people don’t know about. An accountant will be able to make sure that you get the relief, credits, and help you to plan your future taxes strategically. An accountant for a small business or entrepreneur is likely to cost around £500 for the year, however, they could more than pay for themselves in reclaimed tax.
Those are just a few indicators that it is likely time for you to consider outsourcing your accounting. There are a few other considerations before you do decide to proceed, in any case.
If you are planning to grow your business in the next few years, and have a bigger team, pitch for bigger business and look for opportunities in other areas, then an accountant should be built into your future plans. Just like you plan to hire new team members, or outsource your social media or outsource your payroll, those are built into your budget too. Having more hands on deck can mean you are more mobile and free to explore more income streams. You can put your time and effort into creating new content and products while your finances are taken care of.
If, however, you are planning on staying as a smaller company, or perhaps as a solo worker for some time, then it is entirely possible for you to find a software you are comfortable with and use all of the accounting information online to keep your own books in order.
Handling various accounting functions internally can become a full-time task, and is often daunting when rules and regulations are changed. It can consume resources and time that would be more beneficial and valuable to be spent elsewhere. Accounts can be an intricate and complex process, and come with repercussions if they aren’t handled correctly. So consider when you feel the right time to outsource your accounting is, and use the above point to help you decide.