Hiring an Accountant vs. Internal Bookkeeping
If you are running a small business, you probably outsource your accounting. After all, the first employees you’d want to hire are usually people who can help you grow your business, not someone whose work doesn’t directly translate into profit. But as you grow and expand, you may realize that working with your Maryland accountant, although beneficial, doesn’t provide you with the results you want. And the problem is often in the lack of organization when it comes to internal bookkeeping. So should you hire a full-time CPA for your business? Here are a few things to consider before you do this.
The Difference Between Accounting and Bookkeeping
A bookkeeper’s responsibility is to keep an accurate record of all financial transactions. For some businesses, bookkeeping is fairly simple, but others may have numerous revenue streams and the sheer size of the business can make it challenging to get all the money accounted for as it comes in or goes out.
Accounting is a broader term that encompasses the entire process of analyzing, summarizing and reporting financial data. Accounting relies heavily on bookkeeping to accurately keep track of the financial data. These two functions don’t have to be performed by the same person or accounting firm. But if they are split, there needs to be good coordination and teamwork between the two.
Identify Your Pain Points
As you think about moving away from outsourced accounting, think about what this would solve. Are you worried about the security of your financial data? Do you want things done faster? Or maybe you simply want to improve the accuracy of your financial records?
Indeed, relying on someone to get all of your transactions recorded properly may be unrealistic if your business is bad at keeping track of expenses or profits to begin with. Write down all the biggest challenges you currently have with your accounting system so that you can come up with the right solutions.
Talk to your current Maryland CPA about how you want to improve your accounting. He or she may help you come up with the right solutions, which may or may not be what you expected. For example, it may be worth training someone internally to do bookkeeping rather than hiring a new staff member. After all, no one knows your business better than your current employees. Your accountant may even be willing to provide the necessary training, whether it’s in QuickBooks or some other accounting platform. It may be helpful to have an accounting consultant in the office a few days a week until your bookkeeping team learns all the procedures. After that, you can have them on a retainer to answer any new questions, as well as to help with tax preparation at the end of the year.
Get Your Books Cleaned Up
If you are looking to change your current accounting system, your books are probably a mess. Before you start implementing any solutions, have your accountant clean up your books, reconcile your bank accounts, and make the numbers agree with each other. If you don’t do this, you’ll be building a new house on an old, crooked foundation, which is never a good idea.
And if you ever feel stuck or unsure about the accounting decisions you are making, feel free to get in touch with the CFO Source. We are more than your local Maryland accountant—we are a full-service financial consulting firm helping business owners like you make the best use of their financial data for important business decisions. Call us or contact online!