There comes a time when just about every emerging business needs to make a decision about accounting. An in-house bookkeeper has been maintaining day-to-day finances while the company has paid a certified public accountant to handle more advanced accounting tasks. But now the company is large enough to require more help. Is it time to hire an accounting staff?
Hiring might be the way to go. But there is another option: outsourcing. Modern accounting outsourcing offers companies access to full-service accounting without having to hire professional staff. There is nothing wrong with hiring, by the way. But hiring comes with a higher payroll, more benefits, and additional responsibilities.
Bookkeeping vs. Accounting
Before going any further, it is important to distinguish between bookkeeping and accounting. They are two separate disciplines despite there being some overlap between them. A bookkeeper is a fully trained professional whose responsibilities focus on managing daily financial transactions. As the name implies, they keep the books.
Bookkeepers are normally tasked with:
- recording daily financial transactions.
- managing account receivable and payable.
- making bank deposits.
- tracking invoices and customer statements.
Accountants could do the same tasks if necessary. But the real dividing line between accountants and bookkeepers relates to taxes. Certified accountants are legally allowed to handle all things tax related on behalf of their clients or employers. An accountant can:
- prepare financial reports.
- prepare and file taxes.
- prepare income and expense projections.
- file documents for new companies.
- handle federal and state entity registration.
- file for federal and state tax numbers.
An accountant is legally able to do things that bookkeepers are not. If an emerging business was to hire an accounting staff, the chances are pretty good that the current bookkeeper would stay on. Bookkeeping tasks are not what accountants specialize in.
Outsourcing Accounting Functions
Understanding the difference between bookkeepers and accountants brings us back to the question of hiring an accounting staff or outsourcing accounting functions. Hiring a staff keeps things in-house. It gives senior executives more control over what happens in the accounting department. It also gives them immediate access to accounting staff.
On the other hand, senior accountants are expensive. They are fully trained and certified individuals who demand a competitive salary and benefits. For an emerging company just starting to see the kind of growth that necessitates full-service accounting, bringing in a staff might still be out of their reach financially. Outsourcing might be the better option.
Outsourcing can save money because the outsourcing partner does not have to dedicate an entire accounting team full time. The emerging business needs accounting services, but the company is not yet big enough to support a full-time accounting staff. That being the case, the outsourcing partner can provide the same services for less.
Letting the Specialists Handle It
From our perspective, there is another big benefit to outsourcing accounting: letting specialists handle it. All the companies we serve specialize in their particular industries. Some are manufacturers. Others are service providers. Here’s the point: they don’t specialize in accounting.
Here at VertiSource HR, we would never attempt to manufacture household electronics. It is not what we do. Likewise, an electronics manufacturer might not want to attempt in-house accounting. It’s not what they do.
Outsourced accounting is one of several HR and business services VertiSource HR offers. We would be happy to explain what you get with our full-service accounting when you contact us for more information. From full charge bookkeeping, to tax filing and reporting, to new company setup, our fully trained staff of experts can handle it all on your behalf.