By Rieva Lesonsky
Do you do all your own accounting? If you love small business accounting, that’s great. But if small business accounting isn’t your bag and you’re trying to do it anyway just to save money, I beg you to reconsider. A recent survey of small business owners, the Sage Small Business Accountants Usage 2013 Study, found more than half (55 percent) of small business owners believe outside accounting services are “critical” to the success of their businesses.
Some seven in 10 (71 percent) of small business owners use outside small business accounting services—most often to handle corporate taxes, personal taxes and accounting. Most companies that hire accounting services do so very early in the life of their businesses. More than half (53 percent) of those who have an accountant hired him or her at startup and 13 percent did so within six months of launch.
Where do small business owners find these trusted professionals to handle small business accounting services? More than half (61 percent) found the accountant through a personal referral; for 17 percent, their accountant is also a friend or family member.
So why would a small business owners not hire outside accounting services? The most common reason small business owners gave was that they prefer to handle small business accounting themselves, but 25 percent also admitted cost was a factor.
If you like doing your own accounting, that’s great, and more power to you. But before you continue doing so, consider: Is accounting the best use of your time? Yes, it’s important to keep tabs on your business’s finances—and I’m not suggesting you should never look at the books. But in most cases, the business owner has more profitable areas to focus on, like new product development or business development, while accounting services is a task that’s easy to outsource.
If you’re trying to save money by not hiring an accountant, let me just remind you of the old saying, “Don’t be penny-wise and pound-foolish.” Good accounting services can save you money by recommending smart tax planning strategies for both your business and your personal taxes; advising you on retirement planning; helping you build value in your company so that when you’re ready to sell or retire, you can get the best possible price; and helping you obtain financing, whether by taking out a small business loan or seeking investors. Accounting is one of the tasks in a small business where it pays to call in the pros.