You’ve undoubtedly learned that there is so much more to your business than creating a great product or service and fulfilling customer needs. The day-to-day also requires inventory, invoicing, tax form requirements, financial statements, adhering to federal, state, and local regulations, bookkeeping, and so much more. You probably love product/service development and delivery, but when it comes to the mundane financial upkeep, you may not have as much passion. Understandable. You’ll want to hand over the financials to professionals. But what’s the best move? Clerk, accountant, or CPA? Maybe none of the above? Does it make more sense to hire outsourced small business accounting services instead?
3 Types of Accounting Professionals
Do you need an accountant for your small business? Affirmative. Dedicated accounting support is non-negotiable. That’s because accounting includes everything from financial forecasting to weigh the company’s growth decisions, record keeping to understand the big picture, and regulatory compliance such as tax filing, compliance documents, and audits. Strong accounting helps you understand and organize your company’s financial overall financial well-being
There are three primary types of accounting assistance your company can consider: clerks, accountants, and CPAs. While these three roles share similarities, there are distinctions based on educational requirements, duties, and compensation.
Clerks
Clerks carry out administrative financial tasks such as logging transactions with accounting software, invoicing customers, and administering payroll. Occasionally, some clerks also serve as bookkeepers. Clerks need a high school diploma as a minimum requirement or entry-level positions, but many companies require additional certifications and/or on-the-job training. Clerks are usually the lowest level of accounting help and typically perform under the supervision of professional accountants.
Accountants
Accountants assume responsibility for financial records to ensure that all transactions adhere to business and legal standards. Accountants are trained to perform functions such as analyzing taxes/filing returns, preparing and explaining financial reports. Accountants can also take on the role of advising businesses on cost reduction approaches, profit-maximizing, and streamlining financial processes. Depending on the company size, senior accountants sometimes manage other accountants and/or accounting clerks.
A bachelor’s degree in accounting or business is the typical minimum requirement to enter the profession, and some accountants may have master’s degrees in accounting or business administration. Additional certifications from national institutes, such as the Institute of Management Accountants, may also be required if an accountant wants to specialize in a specific discipline.
CPAs
Certified Public Accountants (CPAs) are licensed by the State Board of Accountancy. These professionals typically serve as department heads and assume responsibility for an organization’s overall financial management and accountability. Accountants who file with the Securities and Exchange Commission are required to hold a CPA license.
CPAs must have a minimum of a bachelor’s in accounting. Many hold a master’s degree. The path toward earning this credential usually requires relevant work experience, verified by a licensed CPA. This varies by state, so be sure to research. The critical qualification is that CPA candidates must pass the Uniform Certified Public Accountant examination. CPAs are also licensed by their state’s board of accountancy. Additionally, requirements such as the AICPA Ethics Exam must be met. Expect to pay a higher salary for this type of professional.
Is In-House Accounting The Right Choice?
This option is best when your company is financially positioned to pay for a full-time specialist. Hiring an accountant for your business provides benefits such as having your company as their sole focus. This allows in-house accountants the ability to quickly pivot if unexpected issues arise.
Online Accounting Services: An Easier Option
To simplify matters, bring everything under one umbrella: small business accounting services. A full-service accounting company will handle all of your company’s accounting and tax needs. Sometimes, these same companies offer full HR services, too.
Online accounting companies cover all accounting aspects and use a comprehensive approach to make sure your business is taken care of from payroll to the dreaded tax time. Outsourced online accounting services are great for businesses that need industry specialization. If you’ve reached a new level of financial and revenue growth but can’t yet afford an in-house professional, an external service can keep you on a growth trajectory.
Outsourced accounting services such as virtual CFOs and Controllers can provide specialized services:
- Financial Advisory Services: With business growth comes more complexity. Sort through the clutter and work with a professional to plan strategically.
- Financial strategy: Rapid growth? Small business accounting services can help guide you through these changes.
- Budgeting/Forecasting: An outsourced accountant or CFO can uncover new opportunities.
If outsourced accounting and/or HR sounds like the right fit, bringing on an external expert might be ideal. Let’s see if we can help you with a free consultation!
