There are many things that you need to consider when running a business. Accurate bookkeeping is one of the most important things to consider when starting a business. After all, as an entrepreneur, you must file VAT returns. It is also good to get reliable information about your company’s financial status. You can see how much profit you are generating and where the most significant bottlenecks are by giving yourself a bird’s eye view of your turnover and costs.
Many (small) entrepreneurs choose to keep their accounting entirely up to date for financial reasons. This can also be easily accomplished by using an accounting package. However, there are many reasons to outsource (some of) the paperwork to accountants and bookkeepers.
What Can You Do Yourself?
First, it is good to think about what you can do yourself. Are you a loyal bookkeeper? Or are your receipts so jumbled up that you don’t immediately know where to start?
With accounting software, you can do many administrative tasks yourself, including entering receipts and invoices and viewing statements. The extent to which the help of an accountant or bookkeeper is desirable varies from entrepreneur to entrepreneur.
Some do most of the bookkeeping themselves and hire an accountant only for financial advice and check their tax returns. Others choose to do only invoice processing in-house. Other administrative tasks are left to the accountants to do.
Outsourcing
Lack of time and complexity may be the factors pushing for outsourcing administrative tasks. Reasons include, for example, changes in activities and increased tasks, and you can stop doing your own bookkeeping and outsource it to an accountant or bookkeeper.
Not all administrations are the same. Usually, your job will dictate a lot about your accounting. Do you have a lot of inventory? Do you provide products or services to foreign countries? Do you send and receive a lot of invoices? All of these things will have a bearing on the size and complexity of your books. Depending on this (and on your knowledge), you may choose to hire an accountant or bookkeeper. These will help you keep things organized and/or in control.
Legal Obligations
An important reason to hire an accountant or bookkeeper is to grow your business. Often, you need help to clarify things
For companies subject to audit, annual accounts must be audited by a certified public accountant. In practice, it is not always easy to determine whether a company is audited or not. An accountant can help you sort it out. Even if your company is subject to an audit, it does not mean that you have to outsource all of your administrative tasks. You can continue to do some of it yourself, such as processing incoming and outgoing invoices, managing reports and articles, etc. Your accountant will manage your accounting.
Do You Need a Bookkeeper or an Accountant?
This is actually a trick question. In some cases, you need both.
An accountant can analyze the entire picture of your financial situation and provide you with strategic advice. If necessary, they prepare income statements and other critical financial documents and file the company’s tax returns.
After tax season is over, accountants can also act as outsourced financial managers, advising entrepreneurs on financial strategies, such as securing a line of credit against claims when introducing new products.
In contrast, a bookkeeper is responsible for practical day-to-day tasks such as making sure that new employees submit all the necessary paperwork for the company’s payroll, submitting invoices (promptly), following up with them, and paying the bills. A bookkeeper can also manage the company’s expenses, ensuring that all costs are entered and recorded correctly in software to be ready for tax time and other reports to creditors, investors, etc.
If you’re looking for bookkeeping or accounting services, NEXGEN ACCOUNTANTS provides a wide range of efficient accounting and tax services to businesses and individuals in Florida. Don’t hesitate to contact them to learn more!