How to Know It’s Time for Your Small Business to Outsource Accounting

July 27, 2022
outsource accounting: young man and woman shaking hands during a meeting with a financial planner in a modern office

As a small business owner, you’re accustomed to wearing many hats. It takes a lot of energy and resources to keep your business running smoothly. Small business accounting is a lot to take on for a single person. It can quickly become overwhelming when you consider complex needs for filing taxes, processing payroll, and day-to-day accounts receivable. When you outsource accounting duties to an external firm, it helps ensure your business is set up to thrive.

In today’s digital world, it’s easier than ever to find an online accountant who can work with you remotely. Here are 5 signs it’s time to outsource accounting for your small business.

5 Signs It’s Time to Outsource Accounting for Your Small Business

1. In-house Accounting Takes Up Too Many Resources

While large organizations are usually fully equipped with an in-house accounting team, smaller businesses may not have this luxury. However, just because your business is small doesn’t mean the workload is easy. Maybe you’re a new business owner trying to figure out how to pay your own salary. Or, you simply can’t quite get a handle on the difference between bookkeeping and accounting

Working through all the accounting needs of a small business requires many resources, both in time and finances. If you or an employee are spending countless hours on accounting duties like payroll, business taxes and accounts payable, it might be worth considering how outsourcing can help ease your burdens. Utilizing enrolled agents within a cloud-based accounting firm will free up time that can be better spent on other significant areas of your business.

2. You’re Experiencing Delayed Payroll

Employees are a vital resource to any small business, so it’s critical that payroll is regularly processed without delay. Payroll often includes nuances such as health insurance, workers’ compensation, and 401(k) deductions, not to mention time tracking, sick leave, and PTO. There are certain practices to keep payroll efficient, but even the most well-intentioned business owner can fall behind when payroll is done in-house.

As priorities shift and unexpected events occur, there’s always a risk of something falling off the radar. If you’re struggling to keep track of the details and have delayed payroll, it may be time to consider outsourced bookkeeping. In addition to processing payroll, bookkeepers can offer a valuable set of skills that keep your finances on track.

3. Your Business Is Growing Too Fast to Keep Up with Its Accounting Needs

Let’s say you’ve committed to a plan of growing your business over the past couple of years, and you’ve found success! A fast-growing business is far from a problem unless your accounting duties start to fall behind. As a business increases revenue, other needs will emerge. These could include hiring additional employees or contractors and processing more financial records. 

If you’ve decided to offer new products or services, you’ll probably be dealing with new vendors as well. Filing your business taxes and state taxes can take more effort when your business is experiencing rapid growth. Unless you have the resources to maintain your finances, you risk missing key details or making errors on tax returns. Outsourcing accounting needs can give you peace of mind as your business grows.

4. Accounting Records Take Up Too Much Space

Tax forms, invoices, payroll records, and other financial documents can quickly pile up for a small business owner. It’s not always easy to know what you need to keep and what you can toss. This is especially true when there’s a possibility of receiving an audit notice. Even if your accounting records are mostly digital, they still require space you may not have. 

Cloud-based storage and tax software are valuable tools that can be utilized by outsourcing to an accounting firm. A dedicated accounting company will have the necessary storage to keep all of your records in a safe space. When you outsource accounting, do it with the confidence that your financial documents will be available when you need them. 

5. Your Small Business Tax Needs Have Grown More Complex

It may be tempting to take a DIY approach to tax preparation, especially considering that the IRS offers free federal tax filing. However, this approach can be time-consuming if your small business taxes have several unique variables. For example, small business owners should be aware of expenses they can deduct and quarterly tax payments

It can be challenging to sort through all the complex details, especially if your business has gone through any significant changes over the past year. Industry experts thoroughly review tax returns to ensure accuracy and completion.

Turn to Online CPAs for Fast and Accurate Accounting

When the time comes for your small business tax return preparation or basic accounting needs, it’s best to trust a team of industry experts. Start by understanding some key facts about tax professionals such as the representation rights of CPAs, enrolled agents and participants in the IRS Annual Filing Season Program

The team at 1-800Accountant is specially dedicated to serving small business owners with decades of financial expertise. Their services include new business registry, bookkeeping, payroll and a comprehensive portfolio of business tax offerings. Small business taxes don’t have to be a struggle when you partner with the right team who are experts in the industry. 

Secure, cloud-based storage, a convenient mobile and web portal, and year-round advisory are just some of the benefits you’ll receive when choosing 1-800Accountant. Contact a tax professional today and find out how they can help streamline your business accounting processes.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.