Whether you want your business to have a single owner forever or you’re actively seeking investors, you need to have accurate financial statements. Your financial statements can help you get lower interest rates on loans, better forecast your cash flow, and make informed decisions for future growth.
Because strong information is the key to any business decision, your financial statements need to go beyond the minimum requirements. The new standard of outsourced accounting and bookkeeping services often give you the most accurate picture of your finances.
In many smaller businesses, the owners or managers do most of the accounting. Even when a CPA does the taxes or end-of-year reports, most of the day-to-day bookkeeping may be done by someone with many duties that go beyond accounting. This creates several problems:
First, the people preparing the books may not have advanced accounting knowledge. If they lack knowledge of accounting rules, they may report transactions in the wrong period or make other errors.
Second, when an owner or employee has other duties, accounting often takes a backseat. Accounting reports that managers use to make decisions can quickly become out of date. Needed documents may also be misplaced before the designated “accountant” records them.
Finally, when accounting is viewed as an undesirable chore, there is added incentive to rush through it. This also increases the likelihood of errors.
Even when you prepare your books carefully, there is always the risk of human error. Even a single missed or transposed digit can throw off your books.
Outsourced accounting services can often be directly integrated into your inventory, point-of-sale, payroll, and other bookkeeping systems. Each time a transaction is made, your accounting systems are automatically updated. This virtually eliminates the possibility of human error in data entry.
Provide Expert Review
Virtual outsourced accounting and bookkeeping isn’t done entirely by computers. A CPA is still reviewing the entries and checking for errors.