How To Outsource Accounting and Save Your Time

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Need some help managing the financial aspects of running a small business or independent venture? You likely know that there are lots of financial pros out there with fancy letters after their names who can provide that assistance. But which professional can solve your particular problem?

Here’s how you can take accounting off your to-do list and find more time to focus on your business—through the life-changing magic of outsourcing.

Why outsource your accounting?
Small businesses often hire some kind of outside help to manage their accounting tasks. There are a few reasons why. Even if your spreadsheets are true works of art, DIY accounting will cut into the time you could otherwise spend helping your business grow. Not to mention, if you make a mistake on your tax return, and you could get fined by the IRS—or even trigger an audit.

Even if you spend sleepless nights poring over textbooks, you won’t have the expertise of a professional bookkeeper, accountant, or tax planner. That’s because they have experience—they’ve worked with many businesses, and understand first-hand the mistakes to avoid.

When talking about accounting, there are three interlinked processes: Bookkeeping, accounting, and tax planning.

Bookkeeping tracks all your day-to-day transactions—money entering and leaving your business. It also categorizes those transactions, so you can see how you’re spending money, and how you’re making it.

Accounting takes information from your bookkeeping, crunches the numbers, and shows you the big picture. Financial reports like income statements and balance sheets show you how much money you’re earning, and how much you have to work with.

Tax planning involves looking at your bookkeeping and accounting figures, and using that info to save as much as possible on your taxes.

These three areas often overlap. For instance, your bookkeeper might prepare financial reports for you, and your accountant may help with your tax planning.

How to outsource your bookkeeping
When you outsource your bookkeeping, a hired professional tracks money entering and leaving your business and categorizes it for you. That information can be used by an accountant to create financial statements.

How to outsource your accounting
An accountant takes all of the info recorded and categorized by your bookkeeper, then produces financial reports that show you how your business is performing.

They can also advise you on financial decisions—such as taking out loans, bringing on employees, or expanding your business. And they can file your taxes for you, doing their best to save you money on your tax return.

Outsourcing tax planning
Often, an accountant—especially a certified public accountant (CPA)—can help you plan your tax deductions. But in case your accountant isn’t up to the task, or if you’d like an especially in-depth look at all your tax options, tax planners are here to help. While it costs money to hire a tax planner, you often save money in the long run because of the tax deductions you’re able to write off.

Outsourcing your accounting can help you get organized, and help you save time on the tasks that you need to do to run your business efficiently. Take a look at the options available to you, and talk to a professional if you have any questions about what you should be looking at.

The above content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

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