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There are plenty of things you do yourself as a business owner – from managing sales to being the human resources rep and more. But, when it comes to your finances, you may wonder if you should pay for an accountant or do it yourself. The answer is not always simple – and it could depend on your financial know-how as well as the type of industry your business serves. But, to help make the decision a little easier, we’ve come up with a few things to consider before you go one way or the other.
Yes, your business needs a budget just as much as your personal life – perhaps even more so. Whether you are just starting out or you are an established business, you need to know where your money is going, when more will come in and how it will be spent. Some accounting programs have integrated budgeting, such as QuickBooks Plus and Xero Accounting.
Also, while we are on the topic of budgeting, you need to know your expenses. When it comes to accounting software, you usually have a flat monthly fee or one-time download fee – which makes it easier to track and predict expenses. When it comes to hiring an accountant, the fee structure can change and not be as predictable, especially if you are unsure how often or when you would use them.
Complex Accounting Issues
An accountant offers experience and significant expertise when it comes to more complex accounting issues. You can benefit from their experience in the industry as well as their experience dealing with similar accounting problems.
Most of these complex issues are reserved for larger corporations – and those that operate in other countries while residing in a different country. For most small businesses, accounting software more than tackles the issues.
Sometimes a business owner may need a more personal advisor – and an accountant can become just that for your company. They are there to establish a relationship, get to know your business and advise you responsibly.
But, you will pay for that personal touch. Accountants can charge anywhere from $100 to $1,000 for their services and you may have to pay retainer fees for some accountants if you use them often.
You can still provide an accountant with access to your accounting software for when the need arises to contact one – so do not assume that if you purchase software you cut out an accountant entirely. A few programs that offer accountants direct access to your file include QuickBooks Plus, QuickBooks Essentials and WorkingPoint.
If you hire an accountant, you are responsible for providing them with copies of your expenses, receipts, bank statements, credit card statements, etc. They will then manually input that into their own system to calculate your reports.
With accounting software today, especially those that are cloud-based, everything is based on automation. Your software program can automatically download and sync bank transactions, categorize them and have them ready for reporting while you sleep – and without the fees associated with an accountant.
Not all programs are extremely accurate when it comes to downloading and syncing transactions either. Some will forget to add in bank fees while others will not categorize them properly – regardless of how many rules you setup. For accuracy, we recommend any of the QuickBooks products or even Wave Accounting.
When you hire an accountant, you may not have access to your financial files when you need them – or even on the go. But, when you have accounting software you can access your books, reports and even invoice and add expenses via your mobile phone. If you are someone that constantly travels or needs to reference your books often, this is something to consider.
Organizing Your Records
Most businesses use digital records as well as hard copies to keep track of expenses, employee files, etc. Some accounting programs recognize this need and even offer digital storage as part of their plan. Less Accounting and QuickBooks Essentials are two examples of that. You can attach receipts and invoices to expenses, attach documents to your invoices and even upload and store contracts on their site.
Assessing the pros and cons of hiring an accountant versus using your own software can be difficult, but really it comes down to your budget and comfort level. If you’d like the convenience of a professional doing it all for you, then the cost of an accountant will be worth it. If, however, you prefer to save money and have more control over your finances, you may want to use accounting software.
Software has come a long way over the past few years and it is much more sophisticated than even five years ago. What’s more, software is so intuitive and cost-effective that you won’t mind adding it to your budget. Lastly, software makers understand that most business owners are not accountants – which is why programs are extremely user-friendly.
While you are looking for your next accounting program, check out our editor reviews of the latest small business accounting solutions to see which is right for you.