Accounting and bookkeeping are essential tasks when starting a business. They are part of your daily operations, a fundamental aspect of your small business that you should focus on.
However, financial management is not the easiest of tasks. It requires knowledge and experience so you can perform it efficiently, this may be the reason why most businesses in the state hire an accountant or a small business accounting software.
These two resources are undeniably helpful in maintaining the overall financial health of your business. Hiring a professional and using an accounting software are also efficient ways to handle your business’s accounting, not to mention they’re also cost-effective.
Many entrepreneurs have opposing views when it comes to which one is the most ideal to use, however, regardless of which one you want to utilize, the end result is the same – you’ll be able to take care of your business expenses better.
To help you make the right decision, this article will discuss the advantages and disadvantages of using the assistance of an accountant and a small business accounting software.
If you’re considering which one you want to hire/use, a accountant or an accounting software, there’s a simple way to choose, you just have to ask yourself – “do I want to deal with a real person, or do I prefer to use a tech solution?”
Most people would prefer to work with a professional accountant, but before you choose this option for yourself, continue reading first.
There are many pros when hiring an accountant, one of them include the kind of working relationship that you’ll have. If you work with a professional, the relationship is more interactive, you’ll be able to talk and discuss things, pitch in your ideas and express your disagreements. In turn, they can also give us advises, helpful points and assist us in managing our business’s finances.
Professional accountants also understand your financial goals and situation and create ways to make your business better. They can adjust your taxes and help you prepare for the future. Unlike accounting softwares, humans can think rationally, they have the instinct to anticipate imminent danger such in the case financial troubles and issues and other tough situations.
Hiring an accountant will even prove to be a good choice during tax period. Having an accountant, your workload during tax time will be easier because there’s someone who will assist you with every procedure. Your accountant will explain to you tax regulations, tax filing, tax document preparation and a lot more.
Apart from all these, an accountant can both use his/her skills and use an accounting software all at the same time. He/she also has the ability to anticipate problems and create solutions in a timely manner – something that accounting softwares can never do.
Cost is the number one concern among entrepreneurs when we talk about hiring an accountant. Professional fees can cost you as much as $1000 per contract – the more experienced the accountant is, the higher the cost of services. Others prefer to be paid on an hourly, per project or per process, regardless, they can even be more costly. For the new entrepreneur, this is already a large sum of money.
As the saying goes, no one is perfect – that includes your accountant. We are all prone to human error and while doing your accounting tasks, they may have their fair share of errors. However, you can also help them in your own little way; be more participative and make sure to get involved – two eyes are better than one, it gives you the opportunity to see errors as well.
You may have jumped for joy when accounting softwares were created, that is … if you’re a tech savvy kind of person, however, not every virtual service is for everybody. In this section we’re going to talk about the pros and cons of using an accounting software.
As you know, using any kind of tech solution makes everything easy and fast. I would say that the greatest advantage of using a software is automation. You basically don’t have to do manual entry, manual calculations and many other time-consuming tasks on your own because you can streamline anything.
Financial statements and reports are automatically generated without any effort and accounting softwares will provide you with almost every accounting tool you could imagine. You can even stay connected with your accountant or other team members because the majority of accounting softwares have share and collaboration features. Accounting softwares can also be used anytime, anywhere, they can be accessed in any web browser or operating system as long an internet connection is in place.
Accounting softwares are also very affordable. Most, if not all of them are paid monthly or annually and they have competitive pricing and practical features, so that’s an edge that a professional accountant will never have.
Working online is not the safest place; you continuously share information with your partners and team members, you’re putting your business at risk by doing so. Anyone can access your information anytime as long as they have the skills to do so, they may use your information for dangerous and fraudulent activities.
This can affect your business immensely, however, there are many ways to solve this problem. You can add layers of electronic protection to secure any data you enter or share online. You can also have an internal auditor, but this is an additional expense on your part.
For an accounting software to continue performing better, you may need to upgrade it from time to time for additional features. Of course, for any upgrade, you may have to shell out cash to pay for the additional services.
As with any kind of tech solution, you also have to learn how to use it, but not all people are adaptable and they may find it difficult to navigate their finances using an accounting software.
These are just some of the advantages and disadvantages of both services. Regardless which one you choose, the most important thing is, you feel comfortable doing your accounting tasks with the service. Always remember, that it it’s still very important to be hands-on, use these services responsibly.