(Should You Outsource Your Accounting Functions ?)
Copyright © Walter Gemmell
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Should You Outsource Your Accounting Functions?

For many small businesses, it seems easier and more economical to outsource accounting functions by either hiring an accounting firm or outsourcing agency that will provide the services as you need them. On the other hand, if you make use of the accounting software that is available on the market, you can probably do the work yourself and pay your accountant to reconcile your books once a month. Though many small businesses choose to hire someone to do the work, you have to weigh the cost factor against your profits in order to determine if it is cost effective. Depending on the amount of business you do, it's possible you can hire someone part-time who will come in one or two days a week and do all of the accounting work. If your business is cash and carry via cash, credit card, debit card, or check, there will be less involved than if you choose to offer in-house accounts.

When you first open your business, you may not feel that you want to hire a staff member to handle just accounting functions, but as your business grows, you may find that it makes more sense to have someone right there. For a small business, a full-charge bookkeeper is your best choice instead of having one person to perform accounts receivable and another one to perform accounts payable. Even if you have house accounts, there is no need to have two people in accounting unless your business is very busy. You should, however, still have a system of checks and balances where someone else checks the work of your bookkeeper even if that's you, your store manager, or another employee. That ensures that your books are in order and that no invalid entries are made in the books to hide theft.

Instead of hiring a bookkeeper, many small business owners choose to bring their spouses in to take care of all of the accounting functions for the company. This may include payroll, or they may decide to hire a payroll outsourcing firm such as ADP to take care of that portion of the books. Having your spouse there means there is less likelihood of book juggling since he or she would only be stealing from family funds anyway. It's also more efficient to have a family member help out and more likely that he or she will catch any discrepancies you may have missed when counting the register operated by each employee as well as any inventory that may not total the difference between previous count and new sales. It's sometimes easy for a small business owner to overlook theft by employees because he wants to believe he hired honest people. Unfortunately, that doesn't always happen, so you rely on the person who does the accounting to look for anything suspicious.