By Analytix Editorial Team
One of the most common challenges a business grapples with, on an ongoing basis, is a limited budget. By itself, this is probably one of the largest challenges because of the negative effect it has on several other factors influencing the business, including investments. Critical purchases may be stalled or deferred to preserve liquidity at times, thinking that they are unimportant. One such decision is that of hiring help for critical but back-end tasks like accounting.
Hiring an Accounting Contractor
An accounting contractor is an independent professional hired to carry out accounting work on a daily basis, throughout the year. The work carried out can include accounting tasks, such as setting up a bank account for the business, helping with incorporating the business or initiating and completing the registrations, and carrying out year-end accounting functions, including filing taxes.
For a startup, the initial need of having accounting expertise may overshadow the selection made in having to hire a permanent resource. However, as a startup grows, so does its accounting needs. Volumes of sales may double or triple, transactions would increase in parallel with this, etc. So the caliber of accounting expertise required increases rapidly as a company grows. If the hired accountant is not experienced with managing rapid growth, remaining on top of the accounting could become a challenge.
Outsourcing Accounting Services Providers
Outsourcing the accounting function proves to be a better option for a business that is poised for growth. An outsourcing provider has the required infrastructure in place, which expands to accommodate an increase in accounting needs in real time. This advantage enables the startup to make the transition along the growth curve seamless and without loss revenue or goodwill.
What Works Best?
Uninterrupted financial operations are critical to business growth. Reliable bookkeeping and accounting are basic to successful financial operations for a business, regardless of the industry in which it operates.
If a business is looking at fast-paced growth, it is imperative for the accounting to keep pace. Hiring an accountant may work better in the initial phase, but shifting to a fully-equipped outsourcing agency allows the business to grow without compromising financial operations.
A word of caution: When choosing a provider of outsourced accounting services, conducting research to establish credentials beforehand is essential. Businesses can look at client testimonials, talk to key people in the outsourcing establishment to determine if they can be a potential match, and scrutinize the list of services provided and processes followed before finalizing a contract.
Here are some pros and cons of the two systems at a glance to guide businesses in making a decision:
|Individual professional who puts in work.||Professionals backed by an entire system.|
|Needs an infrastructure in place, even if basic.||Already possesses infrastructure.|
|May need backup by another professional, if the need arises or in case of crisis.||Possesses backup plan and systems in anticipation of any such requirement.|
|Needs to be paid, in the manner pre-decided.||May offer options of flexible payment plans.|
|May not be able to scale up operations as fast as business’s growth pace, unless supported by other resources.||Equipped to handle rapid high-growth phases.|
|May not possess the technological backing to support business continuity.||Equipped to better manage business continuity.|
Analytix Solutions offers customized solutions for business ranging from essential and basic accounting and bookkeeping to more complex requirements. For more information on how we can assist you, call us at 781-503-9004 or email us at [email protected].