Maybe you hate spending your Saturdays in spreadsheets, or maybe you hit a few major milestones and are outgrowing your current system. Regardless of what’s driving you to outsource your accounting, there are a few factors you must take into account during this transition.
In addition to a few other key considerations—such as the impact on other vendors or operational processes—the time of year can drive when to bring on a new system. Here are a few times that are ideal to start outsourcing your accounting.
The best times for businesses to switch to outsourced accounting
The beginning of your fiscal year
Whether your business uses the calendar year or an alternative fiscal year, the twelve-month period is a reflection of your annual cycle. The beginning of the year is a time when many organizations add new systems they’ve been considering for a while or replace old ones that aren’t working out.
If your first order of business for the year is outsourcing your accounting, this means beginning a new year with a clean slate. Because your general ledger will be pretty empty, there will be little to no backed accounting work to do. This also means that at the end of the year when it comes to close your books and file your tax returns, you will have a partner in accounting who has been with you for a full year and has had more than enough time to get familiar with your unique needs.
The end of your fiscal year
On the opposite side of the spectrum, switching accounting solutions as your year comes to a close isn’t necessarily a bad option either. While it may be too late for your accountant to help you correct some of your missteps from the current year, this will give them an entire year of financial activity to analyze and build out forecasted budgets for the following year. If you’re planning on having this new accountant help you prepare and file your taxes, you can expect a period of hands-on backed accounting as they build out or refine your finance reports.
After filing your taxes
Your financials should be fresh in your mind if you recently filed taxes, so this is the perfect opportunity to share that information with a new accounting partner. In addition, having your most recent tax returns on hand provides a complete picture of your finances. With that picture, an expert can familiarize themselves with the financial and operational aspects of your company quickly and efficiently.
Before filing next year’s taxes
Ultimately, it is in your business’s best interest to have all the accounting resources on deck as you can before tax season sets in. Just think about how much you’ll be able to save when you have an expert planner on your side. Whether it’s as soon as a few of weeks after your last filing or a couple of months before the next, bringing on an accounting expert in between this year’s and next year’s tax seasons will have a noticeable impact.
If you can, get ahead of the rush and outsource your accounting before March or April, when everyone is scrambling at the last minute.
As soon as possible
But don’t rush it, if you’re still settling on the right solution or provider. If your current accountant is not meeting your expectations, it’s a great time to start exploring other options. Why wait? The sooner you have a good outsourced accounting provider on your side, the sooner you will start to save time and money and have clean financials to rely on. As a startup founder or small business owner, you could always use more of both!
How to outsource your books
Like any new vendor or hire, a new accountant, bookkeeper, or CPA will need to get to know your business. When it comes to financial information, there are a few documents that can help accelerate this learning. We’ve put together a checklist of what an outsourced accounting provider, like inDinero, will need to know and the materials you should have on hand to relay that essential information.
Quick Note: This article is provided for informational purposes only, and is not legal, financial, accounting, or tax advice. You should consult appropriate professionals for advice on your specific situation. inDinero assumes no liability for actions taken in reliance upon the information contained herein.