By Doug Barden
If you run a small business or you are just starting out, it is highly likely that cost is going to be at the forefront of your mind when making decisions about hiring staff and outsourcing services.
Many small business owners tend to look only at the costs when it comes to outsourcing and automatically assume that they can’t afford it, or it is too much and so end up taking the work on themselves, regardless of whether they have the skills to do so. They also don’t think they can afford a full time member of staff as it’s not the primary role of their business.
Each business is its own entity and would need to carefully consider what option works best for their business; however, there are some positives to considering outsourcing an accountancy firm that many people overlook and the cost is more important.
1. More free time. As previously mentioned, many business owners take on the accountancy work themselves as they don’t want to pay out the money to someone else. While you may save money, you will lose time doing the things that you are meant to be doing as a business owner.
If you look at how long it may take you to do the accounts and compare that to the amount of time you could be out acquiring new business, you will probably find that your time could be better spent elsewhere, which could mean more money into the business.
2. Do you have the skill set? There’s a skill to accounting and naturally the more you do it the better you will get; however, an external company can most definitely do it quicker and with no real complications because they are trained to do that job.
If numbers aren’t your strong point and you know it’s going to stress you each and every time that you come to do the accounts, consider, is it really worth the stress and hassle? This isn’t what you went into business to do and so employing someone else to do it will take the pressure off.
3. Choosing the right outsourcing company. It’s important to take your time when choosing an accountant and find the one that suits your business needs and requirements. One of the first things to consider is their qualifications.
You should also check that they use various accounting software such as MYOB, IRIS, advance spreadsheets, Sage, Xero and Quickbooks that you can utilize in your own business.
Look at any reviews on social media or through Google search that the accountancy has had and ask can you speak to their current clients to get an idea of what they are like as a firm.
Ask how long it will take them to do basic account tasks. See how flexible their service level agreement is and ensure that you understand the conditions of your contract and the notice period you need to give if you decide to leave.
4. What you will need to give to your accountant. If you decide to go ahead and outsource, there are a number of things that your accountant will need before it can undertake the work you have asked them to do. If they are taking over all of your accounts (VAT, annual accounts, bookkeeping and payroll) you will need to give them the following documents and information:
- Bank statements and loan statements
- Petty cash information
- Sales and purchase invoices
- Stock levels (if applicable to your business)
- Pay-in books and cheque book
- All employee information – personal and salary
- Debtors and creditors list.
Whatever you decide to do, it’s important to look at all of the pros and cons for you and your business with cost considered as just one of many factors rather than the deciding vote.
Try and get a few different quotes from companies before you commit too. Picking the wrong one can prove costly if you don’t.
Barlow Andrews managing partner, Doug Barden specializes in financial planning & Accountancy. To find out how he can help you to manage your finances or accounts better visit www.barlow-andrews.co.uk.