Whether you’re transitioning from an in-house accounting staff, or you’re a new, small business hiring accounting services for the first time, this list is for you. Hiring a third-party company for your accounting needs seems like a convenient alternative. You do away with the manpower management, you can operate in a smaller space, and you can worry less about the books.
However, outsourcing your accounting services needs also come with risks. For one, you are letting virtual strangers into the core of your business. Second, it does not automatically translate to savings. In fact, outsourcing can cost you as much as doing your own accounting and auditing. Also, and perhaps the worst of all, should things go wrong with your service provider, it could mean double the mess and worse, double the costs.
Many of the problems related to poor accounting services are completely avoidable. The best way, of course, is to know which company to pick. While shopping for an accounting company to work with, keep your eyes and ears open to the following red flags:
- When they make promises that are too good to be true. Big savings on your taxes? Big ‘returns’ where you know they are impossible? Never take for granted the old saying, ‘If it’s too good to be true, it must be’. Some things, like fixing your accounts and books, are attainable by good accounting companies. But they are not magicians. They cannot make magical savings or create money that you know they should never be there. If your prospective company promises this, be warned: they must be doing something fishy behind your back. Their promises can be very hard to resist. Do background research and search for an objective perspective on how realistic their guarantees are.
- Their company does not have a CPA on staff. Whether they are offering bookkeeping services or tax assistance and preparation, someone in the company’s higher ranks should be a duly licensed CPA. This is one detail that you should not miss asking – it is essential that you are having your accounting services handled by certified and true professionals. They should, after all, be able to vouch for your financial and tax-related needs.
- They are not transparent about their fees. Some accounting services charge by the hour. Others charge on a flat monthly rate. Whatever their charging policies are, it is important that they divulge it to you in full. When they don’t have a rate to show you, or are vague about how they charge you, you should be concerned. Show them your service-related documents to help them figure out fair costs (if they work on percentage).
Outsourcing accounting services always come with greater risks than outsourcing your other service needs. It involves your company’s money. It involves your tax status. When the stakes are as high as these, you have to work extra hard to ensure that you land in the hands of a credible, trustworthy experts.
For accounting consultation and accounting services of all kinds in San Diego, contact Class Advisors! We’d be more than happy to walk you through our process and how we can help your business. Contact us today!