The one thing that all business owners value over everything else is time. The more you free up your time and outsource things like bookkeeping and accounting, the more time you have to grow your business. But, we live in a very unique time where business owners have access to a wide variety of accounting management solutions, namely an accounting firm and accounting software.
Both options come with their own benefits and caveats, and the one you pick will depend on the unique needs of your business.
To simplify this process for you, we’re going to cover some of the most important factors to consider when looking for the optimal accounting solution.
Whether you’re a new or established business owner, it’s important to track and understand the flow of money in your enterprise.
Most accounting software comes with built-in budgeting programs that make it easier to track your income and expenses.
To enjoy these and other features, you must pay a monthly fee or a one-time download fee.
An accounting firm, on the other hand, comes with an unpredictable fee structure.
The amount you pay at the end of each month depends on how frequently you request their services.
Otherwise, you get the same income tracking and forecast features offered by accounting software.
2. Complex accounting tasks
A proficient accounting firm comes with years of experiencing in dealing with the more complex aspects of accounting.
They have seasoned professionals who are familiar with all aspects of the accounting industry and the various accounting problems that you might come across.
These complex accounting factors typically come in to play when a business operates in multiple territories or reaches a certain income threshold.
However, for businesses that are still starting out and have not reached this level of complexity, accounting software will more than cover the most important tasks.
3. Customized service
For businesses that require more of a personalized approach, hiring an accountant is a no-brainer.
Establishing a relationship with an accountant can be a great way to ensure that you get the most out of their services and advice.
However, this kind of customized services comes at a premium.
Most accountants charge a fee of $100 to $1, 000, in addition to retainer fees.
In some cases, you may need your accountant to take over certain aspects of your accounting software processes, which means you’ll end up using both an accountant and software.
Even the best quality accounting software doesn’t provide this level of customized service, but it should offer ease of access to your accountant.
It is the business owner’s responsibility to provide an accountant with copies of credit card statements, bank statements, receipts, expenses and other relevant documents.
This makes it easier for them to manually calculate your reports based on their own systems.
On the other hand, cloud-based accounting software will automatically download and coordinate all of your bank transactions in order to generate accurate reports.
No extra fees are charged for this service.
However, you can’t always rely on the computation of a software program.
Sometimes, your software might forget to include critical transactions or fail to organize them properly.
The manual input method used by accounting firms comes with less of a risk because a report must go through different levels of approval before it is passed, so it’s easier to spot and fix mistakes.
5. Mobile access
With an accounting firm, you have to ask in advance if you want access your accounting records.
Accounting software allows you to view up-to-date financial files at the tap of a button.
You could be waiting at the airport lounge or sipping on Pina Coladas at an island somewhere and have instant access to your accounting records.
You can even add expenses and generate invoices from your smartphone.
This level of convenience is not available with an accounting firm so it’s worth considering if you’re a frequent traveller or someone who wants their records available at their fingertips.
6. Record organization
A lot of businesses use a combination of soft and hard copy documents for their employee files, expense tracking, etc.
Most accounting programs offer digital storage where you can attach invoices and receipts to your expense folder, and store contracts through the software provider’s website.
This versatile file organization is not available with most accounting firms.
Evaluating the risk and benefits of accounting software versus hiring an accountant is no easy feat.
Whether you choose one option or opt for both, depends on your needs, your comfort level, and your budget.