For every business, accounting is a major part of day to day business operations. Starting out, there are a massive set of responsibilities any new entrepreneur has to face and shoulder. With so many operations to multi-task, it may be burdensome and overwhelming for entrepreneurs to keep track of their operations and their budget at the same time. At such a crucial time of the business, it is important that entrepreneurs shed as much of the workload from their shoulder as possible. This can be done by outsourcing.
Should you outsource your accounting service? We at InCorporate.sg believe so, especially when your business is at its early stages and probably cannot afford an in-house accountant. Outsourcing a remote accountant is practical and cost-effective as you are essentially only hiring them for the work that you need for them to do.
You may think that you should just save the money, and just tally your spending and revenue in an excel sheet. Why an accountant? Well, turns out that accounting services is not just typing numbers into an excel sheet…
There’s more to accounting service than tabulating expenditure and revenue. They provide an expert advisory and analysis on areas like business licenses, expense tracking, policies and procedures, month-end accounting, payroll, preparing your business for taxes, creating budgets, cash flow analysis, audit support and preparation. Need I say more? By engaging an accounting firm, you get all these much-needed support that your business requires. You can check out this article to find out more about the services accounting firms offer in Singapore.
As a start-up, you probably invest most of your time concentrating on the core activities like marketing and production. Thus, there is a tendency to ignore or side-line activities like finance and accounting. Thus, it is highly likely your company has very little experience in these activities. All the more you should consult an accountancy firm that can provide an effective result in a professional manner, that will cost significantly less than an in-house accountant.
How much cheaper? For simplified services for taxes and auditing, it is only about a few hundred dollars a year. For complex services covering a full spectrum of services, it can be a few thousand or even way more, depending on the size of your firm. However, it is still a fraction of the cost of hiring an in-house accountant, whose salary alone would take a hefty amount out of your cash flow. You still have to factor in infrastructure costs of perhaps a computer and a space for the accountant to work at etc. Well, it is pretty clear that outsourcing is significantly cheaper.
So when is the perfect time to hire an accounting service? Well, it depends on the stage your business is at. Hiring services for accounting and finance from the get-go is not the best way to go about it. At the beginning, there probably are more pressing issues like testing your business model, and getting feedback on your product. It is only when you urgently require an immediate accountancy service that you should really outsource your accounting. When would that be? It is when your expenses have really grown together with your revenue, which means that your business, and thus cash flow, is growing.
Still, it does not mean that you should totally ignore your accounting at the start. At the early stages of the business, it would be wise to still keep decent track of the in and outs of your funds. Using an accounting software is a good way to simplify the process for yourself. Here are some accounting software that we recommend.
Shifting the responsibility to an outsourcing firm does not mean that you will lose control over the accounts. But, ironically, companies tend to manage an outsource provider more stringently than their in-house department. Thus, in a way, by outsourcing, you actually retain more control over your accounts and finance, simply because you would check everything carefully before submitting it to the accounting firm.
As with the theme of this part of the series, we urge entrepreneurs to keep in mind that outsourcing such complex activities allow them to devote more time to create value for their business and growing it, instead of merely working to support it. Opportunity cost should always be factored in your every decision! Thus, non-core functions like accounting should definitely be outsourced, for effective tax compliance, auditing, budget creations etc.
We have plenty of reviews on accounting firms on the site here, so do check them out! Do leave your own review for firms you have engaged as we at InCorporate.sg, as well as the community, would love to hear your feedback.
For other types of corporate services. you can find the best services recommended for you based on hundreds of companies reviewed on our platform.