Anything that involves time, effort and resources such as starting a business Colorado has to be considered thoroughly; this is a serious matter that needs full preparation.
One of the most difficult tasks when managing a business is taking care of your startup’s finances. For the first-time business owner, this is not easy. And even if you’re an established or experienced entrepreneur, if accounting is not your forte, there’s really nothing you can do.
However, you need to understand that accounting is an important part of running a business; it’s crucial for your business to grow and eventually succeed. That being said, you have to learn to stand on your own and maintain the overall financial health of your business.
If you feel like you lack the skill to take control of your business’s finances, you don’t have to worry because there are so many helpful resources that you can use. Remember that you don’t have to do all the work yourself, ask for help whenever you need it. Going back to your options, you can use a Colorado accounting software or hire an accountant in Colorado.
Tech solutions like accounting softwares have made the lives of millions of entrepreneurs so much easier; they’re fast, efficient and cost-effective. However, there are many who oppose this, saying that no machine or its equivalent can ever replace the intelligence of a human, or the skill of a professional such as a Colorado accountant.
Whether you want to use a small business accounting software or a professional accountant, it’s up to you. To help you weigh in your options, let’s discuss the pros and cons of these two services.
Before accounting softwares came into the picture, small business accountants were considered the elites in the world of accounting and bookkeeping – and I still believe they are to this day.
Although prone to human error, it can’t be denied that hiring a professional Colorado accountant is one of the best methods to efficiently manage your finances.
Before you decide to hire an accountant to help you out, let’s first discuss the advantages and disadvantages of having this professional by your side. Let’s start with the advantages!
I guess we all agree that one good advantage of hiring a professional accountant is that we can create a great working relationship with them. The relationship is interactive, we are able to discuss and share our thoughts and ideas with them, brainstorm and create solutions, ask them to explain certain processes and legal requirements and give us advice and tips to make our business better.
Professional accountants are also able to understand your financial goals and situation. They know how to reduce your taxes and prepare your business’s finances for the future. And although they are prone to error, they can anticipate things like these that accounting softwares can’t.
In other words, your relationship with a professional accountant is more personal than a tech solution like an accounting software. No technology can replace the common sense and ability of humans to think rationally when situations get tough.
Professional accountants further prove their worth during tax period. As you may have heard, tax time is one of the busiest times of the year. Many entrepreneurs dread the grueling process of preparing documents and filing them.
However, if you have an accountant, you’ll have full assistance. Your accountant can give you advice on how to plan your taxes, counsel you on tax issues, explain tax filing, give you an idea of the fees during tax time and help you out on the entire process.
Apart from all these, an accountant can learn and use an accounting software anytime he/she wants. However, accounting softwares can never perform certain tasks that a professional accountant can – for instance, anticipating and creating solutions in an instant when problems arise.
Cost is the number one concern for many entrepreneurs who are planning to hire a professional accountant. While they are undeniably helpful in managing your business’s finances, professional fees for accountants can amount to as much as $1000 – this is already a big amount of money for the new entrepreneur. This is the main reason why business owners turn to accounting softwares because they’re cheaper.
Every accountant charges differently, there are those who prefer to be paid on an hourly basis – which is more expensive, and there are those who set their professional fees on a per project or per process basis. Regardless of the method, they can definitely make a dent in your wallet.
As I’ve repeatedly mentioned, professional accountants are prone to human mistakes. However, the good thing is, they can immediately turn things around and trace their errors. No accountant is perfect, so you have to understand this. Allow them to work with autonomy while being hands-on and participative towards their activities, in this way, you’ll both spot errors early on.
Whether it’s offline or online, there are many accounting services offered today, that it can be difficult to determine who’s legitimate or not. Many claim to be “professional accountants”, but there are only a few that you can trust.
When hiring one, screen every applicant and investigate their background; you’ll be sharing legal and personal information with your accountant, it’s important that they’re reliable, trustworthy and efficient.
One of the greatest innovations in the business industry is the birth of accounting softwares. These tech solutions have made accounting and bookkeeping easier. However, as you know, every service has its pros and cons, and here, we’ll find out about them.
Automation is the main advantage of using an accounting software. You can get rid of the tiring and time-consuming process of creating manual entries, calculating your business’s numbers manually and a lot more with the use of an accounting software; you can basically streamline everything.
You don’t have to do the tedious work of creating financial statements and reports because an accounting software will automatically generate them for you. You can collaborate and work together with your accountant and other team members no matter where you are in the world. Work on your accounting tasks with organization.
Accounting softwares can also share and integrate information in one click of your mouse. You don’t have to wait for months to integrate all your financial information because most accounting softwares have a financial import tool that can do the work for you, everything can be done in under a month.
The most common reason why many entrepreneurs prefer to use accounting softwares is because they are cost-effective. Most accounting softwares are paid on an a monthly basis and they are definitely more affordable than professional accountants.
When you use an accounting softwares, you work on everything online. You share data and information with your team members or coworkers, you can’t deny that the online workplace is not the safest place to do work. Anyone can access your information if they want to, alter or steal your personal or business data and use them for fraudulent activities.
This may be detrimental to the overall health of your business, not just in the financial aspect. However, there are ways to combat this problem; you can add layers and layers of electronic security, you can also have an internal auditor to check for inaccuracies, but expect that this would incur more cost on your part.
Another disadvantage in using an accounting software is the fact that you need to update constantly for it to work properly. You existing plan may not have the functions, tools or features that you want and you may need to upgrade it – which is costly.
Not all entrepreneurs are technologically savvy, however, accounting softwares may not be for everybody. You have to learn how to use the software to properly perform accounting tasks; trainings are also required for every update that you make. And while most accounting softwares claim that they are user-friendly and easy to use, they can be the exact opposite.
At the end of the day, it doesn’t matter if you use an accounting software or a professional to do the job for you. If you feel like it would be much better to use an accounting software to work on your taxes and financial statements, then use an accounting software. However, if you want to hire a professional to take care of your finances, you can also choose this option.
Although both these services have their own set of advantages and disadvantages, they’re also both very helpful in keeping track of your finances. The most important thing that you have to remember is to use them responsibly.