Tips for a new business startup while devising an accounting plan

Usually, the small and newly established businesses face problems regarding their tax, accounts and financial management systems. Threats of profit loss and high costs are their major concerns. Each new business wants to maintain its tax structure, manage accounts system, check its financial records, and all this in minimum prices and maximum quality.

Proper guidance in devising the most effective accounting plan is necessary to give your new business a powerful push. While hiring an agency to produce an accounting plan for your new business setup, look for the following:

Is the company able to prepare business and individual federal tax returns for you? Tax returns are normally prepared in the format prescribed by the law enforcement authorities.
Can the company keep track of all your payrolls, such as financial records of salaries, income, bonuses, deductions, increments etc.?

How well the company understands you and your business? It’s important that the company you hire looks beyond its profits and gives you the most economical accounting solutions, even if it means sacrificing its benefits.

Is the company able to handle your diverse accounting tasks and activities easily? Most new businesses want to save time, money and manpower. Therefore it is essential to select an accounting service provider that provides exceptional service and support.

Some accounting tasks become so expensive that a small business can’t afford their prices. But an accounting firm can provide answers to your questions.

Why is accounting important for small businesses?

Saves Your Dollars

Outsourcing your accounting work can lower the costs incurred on payroll processing. The savings on payroll taxes alone is amazing! By outsourcing accounting, companies can save up to 50% on only headcount costs.

Lots of companies are outsourcing their accounting operations and particularly to offshore destinations. As a result, research reports have estimated that the global market for outsourcing finance and accounting operations is expected to grow fast.

Effectively Manage Your Manpower Resources

If you are interested in saving your employee hiring and training costs, you should consider outsourcing your accounting tasks. The in-house accounting costs your company may suffer from are high compared to when you outsource the same task. The reason is that the people you hire for handling your accounts offshore are being paid far lesser than those doing the same in your area. Plus, their working hours are longer, increasing your work efficiency. So these offshore accounting companies can reduce your overhead costs by charging you less fee.

Reduce Costs

Every business wants to cut down costs in any way it can. And this is the sole reason why companies care to outsource. These cost reductions come in the form of fewer employees needed (esp. expensive accounting experts), less office space required, no technology needed. All these duties are shifted to the outsourcer’s end.

Lets You Focus On Your Business Growth…Generating More Profits

The outsourcing of accounting is that it lets you focus on the more crucial issues facing the business. Business owners can free themselves from the hassles of all the numbers and concentrate on those matters that need to be taken care of more. Increased focus on core business issues gives profitable results in the end. Outsourcing allows managers and business executives to make informed business decisions rather than managing a mess of financial data from time to time.

Save yourself from headaches due to high costs incurred in managing your accounts and outsource your accounting tasks to a professional accounting firm. This will rescue your company from the dull and tiresome work of updating transactions and keeping track of financial records, and provide complete management of the accounting department.

To manage your business effectively, you must accurately manage your books! This helps you keep an eye on your income and expenses. Consistent and timely bookkeeping measures are crucial to keeping track of important information regarding your business finances.
Bookkeeping keeps check of day-to-day financial transactions for a business. This tracking is necessary to give the correct business transactions to the accountant. Here are some reasons why bookkeeping is necessary for your business:

Keep your records organized

Once you get all your income and expenses details organized, your business operations will become less troublesome to manage. Whether you are looking at a professionally or self-prepared Profit & Loss Statement, you will have all the required information in hand to manage cash flow, control high costs, calculate the projected tax payments and make knowledgeable business decisions.

Saves you from additional expenses

Keeping accurate and precise accounts records plays a great role in determining any business’s success. For any business, a lost receipt means a lost payment, and a lost payment means you will end up paying more taxes!

Maintaining proper books can save you thousands of dollars. It’s always a cost-effective measure to have some kind of record-keeping system for recording expenditure, storing receipts and other important business files.

How outsourcing bookkeeping makes your business more profitable?

Outsourcing your bookkeeping tasks is one of the most intelligent decisions you can make. There are several benefits attached when you outsource your bookkeeping. Like low prices, competitive advantage, fast profits, timely and important customer service. Outsourcing saves you from unwanted expenses and also from tedious accounting and tax operations. In addition, it frees you from additional resources and lowers your capital costs incurred.

If you don’t maintain proper books—it could cost your business a lot of money.

You started with your business because you are an expert in that field, but don’t misunderstand that you can handle your accounting tasks expertly too. Financial management is one aspect most crucial to any organization. A single mistake in money matters may end up disastrously. You are responsible for certain liabilities; if you overlook to pay your taxes on time, you get charged by the State or IRS.

You do your books because you think it saves you money; you are wrong. So think again and think some more. The first loss is the additional fees and penalties you buy due to late payments, wrong tax entries, etc. And second loss is the additional fee you have to pay when you reach some accountant when the water has already crossed the banks!

How to select an accounting firm for your business?

Understand your needs first

Before going into details of the Virginia accounting firm you want, first, identify your own needs. Each firm offers a different service; some provide accounting services yearly and some daily. Some prepare taxes while others take care of your books and payrolls. Here, you need to take a break and decide what is the service your business requires? Make decisions considering what is best for your business instead of what other businesses prefer.

Time for some research

Performing initial research will help you know what services the various Virginia accounting firms are offering you, as well as what prices they are going to charge for their services. Another thing to look for at this point is the services offered by the firm you want to choose and how those services may address your needs. Remember, one wrong decision may get all your numbers wrong.

Education and experience

Choose only that accounting firm that has specific experience in your particular type of business. Many times, certain firms offering “accounting services” are unqualified. You need to know the professional qualification of the accountants you are dealing with. Only professional CA’s, CPA’s or CGA’s are capable of dealing with your accounting tasks effectively.

Check the reputation of the accounting firm

Check the reputation and history of the firm you want to deal with. You may be sure that the people dealing with your money are trustable. For this purpose, it is good you talk to others around you who have already availed of their accounting services. A good word about them from others is important before you start putting your finances in their hands.

It is always handy if you jot down some questions related to the accounting services your business or you require. For example, you can ask your selected accounting firm these questions:

  • Does the firm recognize the language of e-commerce? As your business may be on the internet or deal with the online world in some way.
  • Is your accounting firm aware of all the tax liabilities and knowledge about the IRS? Can it fill out the U.S. tax forms?
  • How can the accounting firm develop the best accounting plan for your specific business needs?
  • What is their contact policy? How often are they going to keep in touch with you?

How to find a reputable accounting firm?

Look for the accounting firm that willingly offers input and advice about your business plans. Your accounting firm is not just restricted to prepare taxes, but it is responsible for building a blueprint for the prospects of your business.

A good accounting firm seeks to build a long-term relationship with its clients and give business advice beyond journal entries and tax returns. Therefore, you must be comfortable working with your accounting firm and choose the one that gives you the best advice even though it’s not in their interest.

The services of a true accounting firm are priceless to you or your business.

Why outsource accounts management?

Many small and medium-sized business owners may not understand the importance of preparing and managing financial accounts. Making the wrong accounting and financial decisions can be extremely annoying and expensive; thus, accounting is considered a high-profile task due to the complexities involved. It engulfs a vast setup of tasks, including financial and income statements preparation, compiling and auditing, tax planning, budgeting, bookkeeping, recruitment, time management etc.
In today’s financial market, business owners are searching for a good plan to save and invest. The financial accounting management firms may provide you with true assistance and direction for all your savings and investment needs. A financial plan guides you in managing your money and expenses.

Many small businesses have little idea of the financial state of their organization and are not aware of the benefits of managing financial records. In addition, the benefits of managing the accounts and financial records ease the workload at year-end and form the basis of the annual results.
Managing an organization’s accounts is a big responsibility, and every organization needs to maintain its accounts to run the business efficiently. Undoubtedly, maintaining accounts is one of the most demanding and time-consuming jobs. Apart from this, it also demands a lot of accuracy. Therefore, hiring only professionals to handle various aspects of this field is important because one wrong entry in accounts books can lead to many problems. On the other hand, hiring in-house employees to maintain accounts may again put the organization into heavy expenses. In such cases, taking help from accounting outsourcing firms could turn out to be the best cost-effective thing.

Handling accounting tasks require complete accuracy, and many organizations achieve it by outsourcing accounting professionals. Outsourcing is a strong option that organizations anywhere in the world can’t seem to ignore. The major benefit of outsourcing accounting activities is that it saves time, money, and manpower. Another benefit is that it also manages the tax session, which is tough and challenging.

Various accounts management firms offer businesses the chance to maintain their accounts books in electronic form to give a clear financial position of the business at the end of each year. It is only through these record books, which are maintained by accounting outsourcing firms, that one comes to know about the financial growth of one’s business. These record books contain all the information about the company’s profits, losses, and tax estimations. In addition, these books are also maintained for payroll processing of employees working in the organization. Accounting outsourcing is the easiest and most convenient way to look after bookkeeping and payroll records.

Each business is different from the other, which is why the requirements of these businesses may also vary. Thus, these variations in accounting tasks can only be managed by professionals who know their job quite well. Accounting outsourcing has relieved businesses from the worry of accounts-related issues. The quality and quantity of work provided by these firms are matchless and save organizations from the rising expenses and the organization’s valuable time. This saved time and money can be utilized elsewhere by the organization in their further growth and development plans.

There are countless accounting firms helping businesses with their accounting needs.

Five facts you must know before you outsource your accounting

What finance and accounting related work can you outsource?

You can outsource almost all finance & accounts related work, including the following:

  • Payroll processing
  • Preparing and reviewing financial statements
  • Compiling and auditing accounting reports
  • Tax planning
  • Accounts receivable and payable management
  • Financial forecasts

Why do I need Financial and Accounting BPO?

The main reason for outsourcing the management of your accounts is to cut costs and increase operational efficiency. It saves time, too and hence increases ROI.

What can I do to avoid the risks associated with outsourcing accounting?

All you need to do is to have the following:

  • Careful planning
  • Clear communication
  • Effective control
  • Background and reference checks
  • Access restrictions and procedures for employees offshore

What is the best way to work with an accounting services provider?

The best way to work with an accounting services provider is to start with a small amount of work, communicate better and then increase the volume of work.

How do I know that an accounting outsourcing company is dependable?

Selecting the best accounting company is tough. But it’s an important step of outsourcing the management of your accounting. First, you need to do careful research. Search in local business directories online and do read their client’s testimonials. It is better to look for a company with head office in your country and see that they have certified public accountants to handle and provide the best accounting solutions to you.

The following two tabs change content below.
George Meszaros is the editor and co-founder of Success Harbor where entrepreneurs learn about building successful companies. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. George Meszaros is also co-founder of Webene, a web design and digital marketing agency.