Each business has its own unique circumstances and preferences. Large conglomerates or international corporations will most likely opt for an in-house accounting team that can be adjusted to their particular circumstances. For the rest of us small business owners, there are three basic solutions to choose from. Now let’s see which one of these shoes fits best…
The “Old School” Method: Accounting Firms
Hiring an accounting firm or a CPA to help you with business finances is definitely the oldest and most traditional accounting solution out there. These guys offer great benefits over the DIY self-method—like the fact that you’ll barely have to lift a finger and you’ll also be privy to expert insight (pending they’re qualifications of course).
Of course there are also some drawbacks such as higher fees and slow turnaround times. Many of these places charge high hourly fees for consultations which can make it difficult to set a steady course for your monthly budget, not to mention their services can often be “behind the times” in terms of integrating technology.
The “Semi-Traditional” Method: DIY Software
DIY software is an increasingly popular option, giving business owners a great platform to go it lone wolf. Companies like Quickbooks provide robust software that can help facilitate advanced accounting functions. Not only are many of these types of tools extremely helpful, they can also save money when it comes to hiring a traditional accountant. Although this is a great option for accountants, it may not be optimal for business owners.
Owning a good tool set doesn’t make you an architect.
Having a good piece of software doesn’t make you knowledgeable about the US tax code, regulations or requirements. Business owners can miss out on deductions, disqualify themselves as a compliant business, and face IRS auditing through improper tax filing. Having simply taken an accounting class in college is no substitute for the wealth of knowledge an accountant brings to the table.
Even if you feel confident enough in your accounting, there is still the consideration of time. Anyone who has started a business knows that they will soon find themselves being pulled in lots of different directions. Bookkeeping is a time consuming task—business owners need to ask if reconciling transactions is the best use of their time.
The “Fully Automated” Method: Software as a Service
The third and final option is an online bookkeeping service. This hybrid option provides the best of both worlds, giving users access to customized software as well as a dedicated bookkeeper. Instead of having to reconcile your own transactions, a bookkeeper (accountant) will do it for you. Some of these services like Bookly, offer unlimited consultation at no hourly cost. Instead they prefer the more modern “Netflix” model of a monthly flat-rate fee. This gives business owners comfort, knowing they can reach out for advice without fear of incurring extra costs and make more accurate monthly budget predictions.
This option offers all of the good (and more) of the aforementioned methods without the bad. The hybrid mixture of cloud-based tech combined with a human element of a bookkeeper takes away the headache of navigating tax law and entering data—while still providing a high touch high tech solution.
Austin Miller is Head of Content Marketing at the online bookkeeping service Bookly. When he’s not helping entrepreneurs modernize their accounting solutions, he’s working on his latest novel, or writing about all things pop culture.