Whatever industry you might be in and whatever the size, accounting remains a business need. Used to chart a detailed recording of a business’s financial transactions, it keeps check of the integrity of numerous parties, from stakeholders to institutions alike.
During the search for a solution for one’s business, you’ll often find two options. One is to purchase software and the other, hire an accountant or accounting firm. At the onset, the most striking difference between the two would be the cost. But while it’s easier to just adopt software as the de facto option, a wise business owner should really consider the needs of the business and the functions the two provide before committing to the decision.
So before you seal it with a click, have a look at what an accounting software or an accounting firm can offer.
WHAT A SOFTWARE CAN DO
A quick search online brings up numerous accounting software to choose from. From QuickBooks to Xero, you’ll find that many of these models offer the same services. It helps you create and issue invoices, track accounts receivable and accounts payable, have a clear understanding of profitability through simple charts, and prepare you for tax season. As a company grows in size, one might have to start considering expanding and adopting enterprise resource planning (ERP) software to help with procurement, project management, HR, compliance, operations, and more.
Here are some reasons why software is a better option:
- It’s usually cheaper than hiring an accountant or accounting firm.
- There are options for subscription models or those with a one-time fee.
- The low investment allows one to try different software before finding an ideal one.
- Very short setup time.
- Sometimes comes with tech support.
Softwares are great for businesses that have a simple business model. It fulfils the basic needs of accounting and can quickly be set up for one to start instantly. Examples include freelancers, small retail businesses with a small inventory, or straightforward services.
That said, larger businesses might find this software unable to cope with intricacies. Here are some reasons why accounting software may not be the best option in the long run.
- Costly scaling as the business grows.
- Additional costs for specific specialised functions, i.e. Multi-currency, GST, Inventory.
- Will require a bookkeeper.
- No financial advisory or expert guidance.
- No localised advisory.
- Extended troubleshooting time.
WHAT AN ACCOUNTANT CAN DO
Hiring an accountant or accounting firm can have a marked difference on a business. While many think of accounting as serving mainly a recording and filing role, the scope includes analysis and reporting as well, which grants advisory.
Every country’s financial reporting requirement is different, and adhering to the framework set by the local authorities keeps a business’s financials healthy. An accounting firm can quickly structure this for your company, and adjust the infrastructure to the type of industry and size of business as well.
Though it initially appears as a bigger capital outlay at the onset, an accounting firm can show up savings to a business through its expert navigation of the financial systems. Being more in touch with schemes, grants, and other financial products, an accounting firm can quickly introduce them into your business for the maximum benefit.
The deep bureaucracy of financial administrative protocols can also mean that businesses sometimes miss out on regulatory requirements, and an accounting firm with its experience can ensure a firm is always in compliance.
The analysis and in-depth reporting are also more contextual when you are working with an accountant or accounting firm. You won’t have to navigate through tax law and wonder about your category, or question if the compiled financial statements are complete. An accounting firm helps you to review your status and complete the tasks as required by officials. And if ever an error occurs, you can also rest easy knowing that a firm can handle it for you.
If you’re a one-person setup or just starting to get the hang of your startup, an accounting software will be great to help you with your bookkeeping and tidying up the sums. As you settle into the software, you can then explore some of the more advanced features. It’s straightforward, functional, and accomplishes the basic needs of a business with simple goals.
Once you’ve grown deeper into the routines of your business, or incorporated more aspects to it, such as employees and services, it might be worth considering adding the services of an accountant firm. It helps the business to pick up on savings in the long run with their understanding of financial products and eco-systems and places the data in a contextual way to support business direction and decisions. Having an actual accountant to consult will save you plenty of time troubleshooting – giving you peace of mind to focus on what matters – your business.
To fulfill all your accounting solutions, look to PLCO and their team of specialists.