How Small Business Solves Big Accounting Problems

September 18, 2011 by Ed Becker

In addition to making their products and services valuable and attractive to customers, small business owners must also work at sales, marketing, networking and managing. Yet all of these elements do not guarantee business success.

The key ingredient that determines whether an owner will be able to start a business and run it in a profitable manner is the ability to make informed financial decisions in an accurate, timely fashion.

Most owners do not have the extensive training and knowledge to make these decisions, nor have the budget or need for an in-house accounting department.

Small to medium business owners must ask themselves if they have the time to:

• Maintain accounting records after working 10-15 hour days.
• Set up, select and computerize an accounting system.
• Deal with filing and processing payroll.
• Reconcile bank accounts and actively monitor cash balances.
• Possess the expertise to code expenses, assets and other income to provide a CPA with information to prepare tax returns at year end.
• Prepare financial information to monitor trends, profitability, cash balance and accounts receivable.
• Hire and train a bookkeeper to run the financial aspects of the business.

A “No” answer to any of these questions indicates that the business may derive significant benefit from outsourcing their accounting function.