The success and failure of business does not rely mainly on its size, and the number of sales you are making, but rather it relies on the way you manage your finances. No matter how high your income is, if you are spending more than what you earn your business will fail.
To be effective in managing your finances, I think that the first thing that you need to do is to keep an accurate record of the financial transactions that you have made. These records will serve as a reference for you when you are trying to determine the financial health of your business. This will also allow you to calculate your net income, as well as your expenses and by comparing those two you will be able to calculate your profit.
Keeping a record of your finances may sound easy, but with hundreds of transactions, you are making each day means that this task is tedious and is time consuming. It may take you a day or even more, just to make are record of your business transactions each day. With all the things that you need to do to make your business profitable, you cannot lose so much of your time just to do this task. Fortunately, you can outsource this task to accounting firms.
Accounting Firms vs Full Time Accountants
You have three options when it comes to management of financial records. You can do it on your own, employ a full time accountant, or hire an accounting firm. I have explained before the disadvantage of managing the records on your own, so let us discuss the other two.
One of your options is to employ a team of full time accountant to do the bookkeeping, balance your financial statements, prepare your tax returns, and manage payrolls and so on. The advantage of employing full time accountants is that you will have the assurance that they will be able to do the job properly, since you can examine them personally.
When they apply to your company, they will bring the necessary documents that will testify their skills and competency. By examining their certifications and supporting documents, you will be able to decide whether they are fit for the job or not. Furthermore, you can assess their personality and see if you can work with them. However, employing full time accountants will cost you huge amounts of money, since you need to pay for their monthly wages, overtime pay and medical benefits.
Accounting firms on the other hand is very affordable. You will only pay for a fixed hourly rate and do not have to deal with over time pays and medical benefits. Accounting firms also have accountants and bookkeepers that will manage and update your financial records. They can also produce financial reports any time you need it. The only downside is that there is a risk that accounting firm will just take any individuals that can do the job. However, many accounting firms that have already established a reputation takes good care of their reputation by hiring certified and experienced accountants.
Overall, I think that outsourcing accounting services to accounting firms are more advantageous, since you can acquire their services for a nominal fee. Furthermore, they have the staff and equipment that will ensure that your financial records are managed properly.
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