AccuraBooks serves typical small businesses that gross approximately $5m or less in annual revenues.
Most typical small businesses within this income range can get by with outsourced (contracted) bookkeeping services to handle recurring tasks. The most common among these tasks include bank/credit reconciliations, payroll, sales tax filings, and job-costing. Some additional tasks at this level may include: creating a chart of accounts, and providing training and oversight/quality assurance services.
As a small business grows to consistently exceed the $5m in annual revenues threshold, their bookkeeping needs will most likely increase as well. The following factors often contribute to this increased demand for bookkeeping services:
- The CEO/Owners’ time becomes more tasked with higher-level management needs;
- More time is needed to handle daily tasks such as vendor bill pay and customer receivables management;
- The sheer volume of business means that the financials need daily attention (such as for inventory management) to ensure the books don’t quickly grow out of control;
- Bigger businesses tend to become more sophisticated in several areas and thus require a more specialized approach to handle more complicated issues such as:
- a more specific (and continuously modified) chart of accounts to track all expenditures (such as for marketing) on a more detailed level for budgetary and other purposes. This includes making sure every single charge/expense is booked to the appropriate accounts (and could mean hundreds/thousands of bookings on a monthly basis).
- payroll simply becomes more complicated, especially when hiring out-of-state and offering more benefits. This can include more intense time-tracking and employee credit card usage oversight.
- more detailed sales analysis and forecasting. For example: trying to ascertain products that sell the best and also have high gross margins for purposes of replenishment levels and cash controls.
When a small business reaches these milestones, the time to hire employees as full-time, in-house bookkeeping staff is also attained. This change is necessary to ensure that continued growing organizational needs and overall successes are met. In-house bookkeepers will be more adaptable to the business’ schedule, and will participate in the overall team/culture/philosophy at the company. This full-time, in-house solution is also a more cost-efficient solution in these higher-level growth stages.
Outsourced bookkeeping should not be discounted though, even in this arena. Bigger businesses may still need to outsource bookkeeping services from time to time for the reasons including:
- to assist in the set-up and migration to a new financial platform;
- to provide quality assurance oversight of the in-house bookkeeping;
- to answer questions and provide resolutions to special problems that arise;
- process annual forms such as 1099 tax forms.
Seeking guidance from an experienced bookkeeper about the specific needs of your company is a wise course of action and will serve to ensure that your bookkeeping plan can keep pace with the needs of your growing business.
Note: AccuraBooks is a bookkeeping firm only, so please consult with your Certified Public Accountant for verification and clarification about the contents of this article.