When we talk to prospective clients, we hear this question a lot. Small businesses and transitional companies tend to have more cash flow concerns than their larger, more established counterparts, which makes them more critical of hiring expenditures. The steep hiring cost associated with professional roles makes this is a legitimate concern.
On average, the cost of hiring an in-house accountant is around $5,500, making it a significant upfront investment, especially for small businesses. This figure does not include the ongoing salary and benefits costs to retain an experienced accountant either, which are typically higher than other professional staff positions. As a result, outsourcing your accounting functions is a cost-effective option over hiring in-house, making it a popular choice for growing businesses.
Whether hired internally, brought in as a part-time consultant, or permanently outsourced, an accountant provides numerous benefits. The advantages that an accountant brings to your organization include revenue-centered benefits like reducing expenses and increasing profitability, in addition to protectionary benefits like reduced fraud risk and audit oversight.
Furthermore, an accountant can manage business finances throughout routine activities like filing taxes and operational compliance, as well as during a major organizational shift.
Business waste is the biggest hindrance to revenue growth. Without an experienced accountant at the helm of your organization’s finances, needless expenses can not only be incurred but allowed to linger on the books unchecked. An accountant will advise on which activities can be undertaken to reduce costs and improve ongoing cash flow. Creating positive cash flow both facilitates growth and protects the company from risk during a business disruption or downturn in the market.
On the flip side of cash outflow is the money coming into the organization. An accountant can help here as well by increasing activities that boost sales and profits. They can advise on pricing structures for your business’s existing offerings, price out the cost of expanding into adjacent offerings, and help prioritize top revenue-producing activities. Additionally, accountants can implement procedures to get invoices paid faster and collect on outstanding invoices more reliably.
Reduce Fraud Risk
While bookkeepers and less experienced financial personnel can undertake simple error-reducing tasks like reconciling bank accounts, accountants can implement accounting controls to reduce the possibility of fraudulent activity. This is an especially salient benefit for small businesses and family-owned operations where trust is assumed to be enough to keep activities on the up and up. A financial professional can come in without bias or personal motivations clouding their judgment to make the kinds of hard changes that are needed to protect the business from illegal actions.
Manage Business Transitions
Whether a business is undertaking an operational transition like changing financial systems or a strategic transition like expanding into new markets, an accountant can manage this shift. Relying on a financial professional is crucial during transitions such as opening new retail locations, launching new product lines, selling internationally, transferring business ownership, entering a merger, or divesting part of the company. Even if nothing about the business is changing operationally or strategically right away, when there is a downturn in the market, an accountant plays a critical role.
Oversee an Audit
When an organization is being audited by the IRS, in conjunction with a business shift, or as part of due diligence for a funding proposal, an accountant can oversee the process to provide required financial statements and reporting accurately and on time.
In addition to instituting industry best practices, an accountant can help to ensure that a business is abiding by state and federal regulations as they relate to payroll and benefits calculations. When these tasks become more complicated during downsizing and other significant organizational adjustments, an accountant is instrumental in keeping up with these changes.
Any financial professional tasked with filing business taxes should assume the role of strategically reducing a company’s tax burden. However, an accountant is uniquely equipped to handle the accounting implications of governmental programs that affect taxes as well. If your business has taken advantage of a PPP loan or a stimulus incentive, you will likely need an accountant to manage the intricacies of complying with their associated requirements.
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