Small Businesses: Pros and Cons of Accounting Services

Many small businesses choose to use accounting services instead of handling everything themselves. This choice can provide you with several advantages as well as a few disadvantages. Here are a few pros and cons of using accounting services when you have a small business.

Pros

One of the biggest ways that an accounting service can help you is with taxes. Many business owners have no clue how taxes work and are much better off having some help in this area. A good accounting service will review your previous year's tax filings and help you plan for the future. By appropriately planning for taxes in advance, you can often institute measures to lower your overall tax liability for the year. An accountant can come up with many suggestions to help you save on your taxes. Then, when tax time comes around, she will be familiar with your situation and easily able to file your business taxes. This will take a huge burden off of your shoulders.

Many accountants can also work as consultants for your business. An experienced accountant knows a great deal about businesses and how they run. Therefore, once an accountant starts working with you, she will usually be able to come up with ideas to help your business grow. Since she will be intimately familiar with your business and how much revenue it brings in, she will often be one of the best sources of unbiased advice.

Dealing with an accountant can also help you with networking for your business. Accountants typically have many different clients in different areas. Therefore, if you need some type of service for your business, they will often know whom to call. For example, if you need a good computer programmer or banker, they will usually be able to refer you to someone.

Cons

One of the biggest disadvantages to using accounting services is that you lose control over certain things. Many business owners will simply take all of their financial documents and dump them on the desks of their accountants when tax time comes around. While this may get the job done, you will be completely left in the dark. It is up to your accountant to not make any mistakes. If she does, you will be held responsible because the taxes are yours. This is putting a lot of faith in someone besides yourself.

Another disadvantage of using accounting services for your small business is the added cost. Sometimes, a good accountant can pay for herself by finding you ways to save money on taxes and other things. However, sometimes the fee that the accountant charges will be much more than what she saves you. Therefore, this could be an expense for your small business that you cannot afford.