Small office bookkeeping services are experiencing a surge in demand as described by Forbes contributor Russ Alan Prince. The changes are being driven primarily by advances in technology. So, what does this trend mean for your business?
Prince states that many families are trying to avoid using large accounting and bookkeeping firms, because the services tend to be very costly. He points out that many family offices have also tried managing their own accounting to save on accounting fees. However, there are a variety of reasons that most family business owners feel that small accounting firms are a preferable middle ground.
Benefits Over Handling Own Accounting
Many entrepreneurs try handling accounting on their own, but there are a couple of reasons that it may not be the best idea.
Time is Money
The average entrepreneur works 52 hours a week, but still has difficulty finding enough time to get everything done. The truth is that the vast majority of entrepreneurs don’t want to waste their time on mundane accounting activities.
A recent study from the Family Office Exchange found that the average family business owner spends a third of their time on accounting and reporting. For family businesses that make bill at $100 an hour, the opportunity cost is roughly $2,000 worth of lost earnings every week. This shows that utilizing the bookkeeping services of a seasoned professional is the best approach to take.
The tax code is extremely complicated in general, which makes handling taxes a challenge for most small business owners that don't have a tax organizer. Businesses must also abide by other regulations in other instances as well, such as reporting income while applying for government grants.
There are a number of excellent accounting calculators on the market, such QuickBooks, but there are still a variety of risks with using them. These tools need to be used properly to ensure that regulations are followed properly. They should only be used by entrepreneurs that have the necessary training.
Fortunately, professional bookkeeping service providers are familiar with the myriad of regulations that affect your business. Business owners are encouraged to reach out to a trained small office bookkeeping services bookkeeper if they are unsure about tax policies or face very stringent regulations.
Benefits Over Using a Traditional Accounting Practice
There are clearly a number of reasons to rely on professional bookkeeping services over handling your own accounting. However, before you resort to hiring one of the Big Four firms or one of their equivalents, you should be aware of these benefits of using a small bookkeeping company:
Lower infrastructural costs. Small bookkeeping companies don’t need to rent multi-unit offices, hire multiple secretaries or incur many of the other costs that larger offices have. Since these costs are lower, they are usually able to offer lower rates to their customers.
More competitive rates. Large companies are typically able to charge higher rates since they have so much clout. Smaller companies must typically charge lower fees to remain competitive, which is another reason that they offer lower rates. The average cost of a typical tax preparation is $261, according to a recent survey from the National Society of Accountants, but small bookkeeping offices usually charge less.
Supporting local businesses. Companies that support other local businesses generate more goodwill in their community. Keep this in mind before hiring a large agency to manage your bookkeeping. All of these factors clearly show that hiring a small bookkeeping company is the best approach.
Accounting is a very important aspect of running a business. However, many businesses lack the financial competencies needed to handle their own accounting and don’t want to pay for the services of a large accounting firm. If you are in need of professional small office bookkeeping services, then please feel free to contact Horne Financial. We look forward to hearing from you!
Stephanie Horne is an experienced bookkeeper and Enrolled Agent. She is the owner and founder of Horne Financial Services in Rohnert Park, California along with this website and has over 20 years of in person, virtual and outsourced bookkeeping/accounting and tax preparation experience with businesses of all sizes.
Her love and passion is to work individually with business owners and families to help alleviate any financial stress or concerns by helping them to understand and have better control of their income, expenses, cash flow, and tax liabilities. She can be reached through her Horne Financial Services Facebook page as well.