Technology is an amazing tool. It’s created a world that was virtually unimaginable just a few decades ago. Small business owners have been benefactors of technology in many ways. No longer do small businesses need to have a full staff of people in-house. In theory, virtual and/or fractional bookkeepers, marketers, and more allow small businesses to remain lean – and still get the job done. Few small businesses start up with an in-house accounting team. Traditionally, this has been a common role to outsource. However, if your business is growing, you will likely need to bring this role in-house eventually. Here are six signs your business may be ready for in-house accounting support in the form of a bookkeeper or accountant. 1. You have a high level of accounting activity every day. If there’s a high volume of accounting-related items coming into the office in paper format rather than virtually, someone is processing it and getting it ready to go to the virtual bookkeeper/accountant. In most small businesses, this is an administrative assistant ("AA"). Is that how you imagined your AA spending his/her time? Scanning in paperwork for hours a day? Do you want your AA to have insight into the money side of your business? An onsite bookkeeper/accountant could remove the need for double-processing those items and provide for compartmentalization of the money side of your business.
2. You have inventory that is complex or complicated. The ins and outs of inventory management can be very challenging. If daily updates and extreme accuracy is important (or necessary) to your business, having accounting functions in-house could be beneficial. The ability to walk back to the warehouse and do a physical count is something that can’t be done by a virtual bookkeeper/accountant. Not all businesses with inventory will need on-site support, but generally someone on-site will need to be involved in the inventory process. If there’s no warehouse manager or shipping/receiving clerk, it may be wise to add inventory duties to an in-house accountant’s role. 3. You need your accountant or bookkeeper to have a closer relationship to your operations team. Virtual providers simply can’t be connected to the day-to-day operations of your business in the same way as on-site staff. Although team communication apps (such as Slack or Microsoft Teams) are helpful, they cannot replace the team-building strength of face-to-face interaction.
Also, the in-house accountant will be able to give management an up-to-the minute reading on the status of cash, payables, and/or receivables being close to the action. If they are on-site recording transactions every day, your financials statements will likely be ready for review in a more timely manner than those that an outsourced accountant provides as they have to batch their work and juggle dozens of other client deadlines.
4. You may need to cross-train and have back up. Many small businesses cross-train their bookkeepers and accountants in other roles in the company. For example, a bookkeeper may be able to fill an assistant’s duties while out running errands or away for a short vacation. 5. You want to maximize payroll investments. If you outsource bookkeeping, you pay a blended rate that includes the overhead of the bookkeeper’s company – which could cost anywhere from RM30-RM150 per hour. You may be able to hire the same level of talent in-house for RM20-RM40 per hour. While there are other costs associated with employing staff, in-housing may still be the smart financial move.
6. You are planning for growth.
If you are forecasting exponential growth in the coming 6-12 months, you could hire an in-house staff on a part-time basis if you don’t yet need full time help. They will be trained on your systems and processes, which will prepare them to scale up their hours if you end up growing your business and need more support.
Additionally, a new team member brings new ideas and a fresh perspective. They contribute in many ways, from boosting team dynamics to injecting a booster shot of morale. The very presence of new hires in any area may be a sign the company is growing and successful!
IN-HOUSE ACCOUNTING FUNCTIONS
So you’ve analyzed your needs and feel it may be time to move some of your accounting in-house. Let’s take a quick look at the functions you may want to fill. Depending on the size of your business, many of these functions may be performed by the same individual.
General bookkeeping / accounting:
-Ensures all transactions are properly recorded in the accounting system (dates, amount, and general ledger accounts are accurate).
-Reconciles bank accounts
-Prepares financial statements
Accounts Payable:
-Pays bills
-Tracks company expenses (expense reports, purchase orders, invoices, etc.)
Accounts Receivable: -Invoices customers -Receives and processes payments. For more information on the level of expertise your small business needs, let us know what questions you might have about the financial needs of your business. Are you considering an in-house accounting staff? Want to talk it over with an expert first? We’d love to help you make a clear, informed decision based on real numbers and your goals for your growing business. Contact us today at 019-477 6788 or email to accbiz.ams@gmail.com
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