As a business owner, you might be tempted to choose cheaper accounting services to save on costs. While lower-cost accounting options might seem appealing, it’s important to consider what you may be sacrificing for the sake of saving money. Investing in comprehensive accounting services can offer benefits that cheaper options might not provide.

Understanding the Difference

Cheaper or basic accounting services often focus primarily on data entry and simple bookkeeping. These services focus on getting the data into an accounting system and keeping things up to date. They may not offer the additional support or insights that more comprehensive accounting services include.

 

What Do Comprehensive Accounting Services Look Like?

1. Detailed Reporting and Analysis:

A more comprehensive accounting service will provide in-depth financial reporting and analysis, which helps you understand your financial position and make informed decisions. Data isn’t just entered. It’s analyzed, reviewed for accuracy, and recorded in a manner that will provide relevant information for making business decisions. This includes detailed budgeting, forecasting, and performance reviews that can guide strategic planning.

2. Regulatory Compliance:

Support for regulatory compliance, such as sales and use tax reporting and business licenses can be essential, especially if you are doing business in multiple states. Ensuring compliance with local and state regulations helps you avoid potential fines and legal issues. A more basic bookkeeping service won’t always know all the reporting required of your business or include that as a part of the service.

3. Year-End Processes:

There are a lot of tasks that need to be completed to close out the year for a business. Closing the books, filing 1099s and W2s, getting income taxes filed, and year-end planning are all important to ensure a successful close to the year and start to the new year. You’ll want an accounting partner that manages the year-end processes, coordinates with your CPA firm, and leads the planning process.

4. Financial Management:

It’s important to not only have accurate financial reporting and data, but to use that data to manage your business. Higher-level accounting support will help you to manage cash flow, project performance, and use your data to make changes in the business that will have a positive impact. This helps you optimize your operations and improve your overall financial health.

 

Understanding the Value

Evaluating the best accounting solution for your company is something that should be considered early and often. While cheaper accounting options might seem like a cost-effective choice, they might not provide the full range of services needed for thorough financial management. Evaluating your accounting support solution as an investment versus a cost can lead to more support and additional benefits that contribute to the long-term success of your business.

 

Written by: Shauna Huntington & Haylie Ridenhour