Millions of companies are started each year but making them attractive to investors and customers means the difference between business success and failure. Over half of them fail within that first year. One of the reasons that these start-up companies fail so quickly is poor planning and record keeping.
The accounting of a business tells the entire story of that company. Owners’ equity explains how the company got started and where the initial investment came from. Accounts receivable is where you will find out what has been sold and for how much. Accounts payable is the story of what it took to make that product or to offer the service shown in accounts receivable. Payroll shows which employees did what and the cost of having to employee them. Reconciling all of these accounts tells the company how much money they have in the bank and if they have a net profit or a loss.
Hiring Outside Help to Tell the Story of Your Business Success
How do you know you need help with your small business accounting? The answer is simple; if you have a small business and accounting is not what you do for a living then you need help. There are so many ways to get the accounting wrong. When it comes to taxes and fiscal reports hiring a professional firm just makes good business sense.
Hiring outside help for small business is a great idea because it frees up the business owner and employees to concentrate on doing what they do best. Outsourcing accounting firms and bookkeeping companies are professionals that work on telling the story of business success every day.
With the economic challenges that come with starting and running a business you need all the help you can get. One of the perks of hiring an accounting company for your books is these people can help your business run smoother. They can ensure that the billing is done on-time and properly and that all the money that comes in from customers is accounted for and applied correctly. This can be a great asset when it comes time to expand or seek a business loan. Not to mention how much easier tax time will be when everything is organized and up to date.
The process of accounting can be a lot of work. Keeping track of payroll, taxes and billing is a big job. This is why outsourcing is such a good idea. What takes small business owner’s valuable hours and countless headaches can all be taken care of by handing the accounting over to an outside professional.
Even if you only outsource the payroll section of accounting you can save time and money. Payroll, whether done weekly or biweekly can be very time consuming and have costly consequences if errors are made. The taxes that are taken out of the employees pay must be reported correctly. At the same time the matching taxes that the employer pays must be put in to a special account and made available for the tax reporting. The other vital part of payroll is all the non-tax related deductions. If health insurance or 401K is offered they must be taken out in the proper order, not to mention special deductions such as child support or garnishments. This can all be very complicated and is best left to the professionals.
Josh Rothenberg is the Vice President of Sales and Marketing for EZCFO a company focused on accounting business success. You can follow him on Google+