When to Outsource Accounting for your Business

When to Outsource Accounting for your Business
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If you’re reading this article, you’re probably already interested in outsourcing accounting for your business, which means that even if you don’t know exactly what’s not working with your current in-house accounting (whether it’s a part-time bookkeeper, employee, or you’re doing it yourself), you just know it isn’t.

Business outsource accounting to CPA firms for all sorts of reasons ranging from time constraints and lack of knowledge to dealing with an audit or late payroll. Don’t worry, you’re not the first business to go through this.

Together, let’s walk through some of the signs it’s time to look elsewhere for accounting help

Signs That You Should Start Outsource Accounting for Your Business

Signs That You Should Start Outsource Accounting

Sign: Spending too Much Time on Accounting Processes


If bookkeeping, reconciling bank statements, payroll, and budgeting is taking time away from other tasks critical to your business—things like sales, handing clients, or the work that brings in revenue—it’s probably time to get some accounting help.

It doesn’t matter the industry, whether you’re a law firm, real estate agent, run an ecommerce or online business, or even trade crypto, most business owners put their efforts toward their strengths in business operations and the core of their business while outsourcing their accounting to a firm that can manage that in the background. Especially in niche markets, ongoing accounting tasks can get super time consuming.

Moreover, if your staff members are doing two jobs at once and your accounting is consuming too much of their time, you need someone to handle these responsibilities exclusively.


Here are some of the steps to consider:

  • Divide your hours into two different categories — tasks that generate income for your business and tasks that involve accounting
  • Calculate the weekly hours spent on accounting and compare the potential cashflow you are losing by devoting time to accounting instead of income generation.
  • Speak with a CPA and evaluate whether the cost of outsourcing to an accountant makes sense and would be worthwhile.

Sign: Your Payroll and Accounting are Delayed


Payroll is an essential component of a business since it affects how your employees feel about working for you. Know that your employees depend on you financially, and payroll delays affect them financially and make them much more likely to seek work elsewhere. If word gets out, it will also make it difficult to recruit new individuals to your company. If you have been late or missed payroll entirely, had errors with raise increases, it is DEFINITELY time to consider having a qualified professional manage this task for you.

Additionally, if you are late on payments or your books are a mess, this is a serious sign of a business that needs some outside help.


These are the steps you shall consider:

  • Recognize that payroll delays cannot happen, and make sure this was caused by human error and not technical error.
  • Speak with a CPA about payroll capabilities and platforms.
  • Considering outsourcing this facet of your business to someone who can take responsibility for running your payroll on time, and catering to all the issues that might result in delay. 

Sign: You Aren’t Doing Much or Any Tax Planning


Businesses have so many options available to lower their tax burdens. If you aren’t engaging in tax planning, or only doing small forms of it, you’re probably spending money on taxes that could go back into your business.

For example, if you don’t know how close you are to the next tax bracket and taking proactive steps to prevent your business from clearing that tax bracket (i.e. investing in new equipment or expanding your office), the money that could be going toward your business is going to taxes instead (yes, even the money you could be paying a tax professional to keep an eye on your tax brackets).

You need to have your taxes planned. With your tax planning in place, you will be able to analyze your financial situation and ensure that all the elements of your business work together, while also making strategic choices that lower your tax burden and take full use of deductions and benefits.

Effective tax planning for sure can help you save your money through the deductions offered by the IRS, and can prevent you from mistakes that can then penalize your business operations. 


These are the steps you shall consider:

  • If you’re not going to work with a CPA, make sure that you (or your in-house finance person) are well aware of all the updates on the IRS’s tax deductions and penalties, and that they have time to prioritize this task
  • Realize that outsourcing to an accountant who specializes in both accounting and tax planning would have all the knowledge regarding tax planning and could help you optimize your business’ strategy.
  • Speak with a few CPA’s and other business owners in your network to see how they manage tax planning. In most cases, outsourcing to a CPA will get you better value and be a worthwhile investment for your business.

Sign: You’re Unprepared For an IRS Audit


Imagine you get a notice from the IRS tomorrow informing you that you are being audited. Do you have a plan in place? Are your files organized? Do you have all of your receipts?

Here’s a big one — will business-critical and income-generating tasks have to stop so you can focus on this?

If you’re not ready to be audited tomorrow, you definitely need to consider working with a CPA.

Businesses are expected to be aware of their financial position in times of IRS audit. The accuracy and relevance of information are two of the factors that must be catered to very precisely at such times. An IRS audit comes with different challenges for the business if their accounts, receipts, and reporting are not in the right place. And, an audit means you are likely to face penalties, fines, and added scrutiny.

You have to be sure and prepared with everything when the IRS at the time of auditing examines your accounts, and financial information to ensure that all the tax laws were respected.

Furthermore, you also have to be sure that the amount of tax that you reported to the IRS is correct as that’s a part of your business finances. 

Imagine if you could just forward that audit notice to your CPA, who can take care of this for you?


Be fully prepared for an IRS Audit:

  • Make sure you keep receipts and financial documents organized
  • You have your accounts segregated for different purposes
  • You have all the documents that are needed for an IRS audit
  • Your accountant is well aware of your company’s financial position with all the correct information in hand
  • Talk with an experienced CPA about how you can improve your business for the IRS audit.

The best way to be prepared for an IRS audit is to already be working with a CPA. But, if you are facing an audit and don’t have an accountant, this is a good time to seek some professional help and outsource.

Sign: Your Books are a Mess


While running a business you must realize how your books are crucial for your business. Updating your books will make filing your taxes simpler. But, if your books are a mess, that’s a pretty tell-tale sign it’s time to outsource accounting. Keeping your day-to-day ledger up to date is crucial, and one of the easier tasks of accounting (though it can be tedious and annoying).

But, if it’s Quickbooks, a spreadsheet, or any other accounting program and you’re seeing errors, missing data, or your reports aren’t generating what they should, it’s time for a CPA.

Properly updated books can lead you to track all the information for making vital financing, investing, and operating decisions. If they are not, you can’t be certain how much money your business has or is generating, and in the worst case, you could overspend and go into debt because of mistakes in bookkeeping. You have to be sure that your books are regularly updated with your company’s financial transactions. 

This indication can hasten your decision if you are considering outsourcing bookkeeping services.


These are the steps you shall consider:

  • Audit any discrepancy happening between the cash flow and the accounting.
  • Determine whether your personal and professional accounts are classified and segregated.
  • Determine whether your expenses are on the right track and reported on the sheet.
  • Gather your documents and start consulting with a few CPAs.
  • Hire an outside CPA to clean up your books.

Sign: You are Lacking Behind on Rebates, Policies, and Tax Deductions


Rebates, policies, and tax deductions are delicately crucial for your organization since they can guide it in the direction of financial growth and have stark impacts on your financial situation. If you’re not keeping up with these things—if you don’t know how deductions have changed since last year or what the new tax brackets are, or aren’t applying for rebates, these are big indicators you’re not up to date and need to rely on someone who has the time and resources to look at this stuff year over year.

Missing out on these things could cause you to experience significant financial strain for which your company may not be prepared.

Being a business owner, you don’t have to stay informed about all of these rebates, policies, and tax deductions to make the best decisions possible. You can absolutely rely on a CPA to guide you through that.


Here’s why it’s time to outsource:

  • A CPA cannot do their job without knowing the latest changes to regulations, tax deductions, policy, and deadlines
  • A CPA will know exactly how these regulations impact your business
  • Make sure your outsourced accountant understands your business niche specifically
  • Talk with an experienced CPA to consider outsourcing your accounting. You may not have to struggle with all the hassle.

Sign: You are Tired of It


At some point, running your business and performing your accounting duties simultaneously becomes stressful. Every business owner outgrows the startup stage and grows to a place of wanting to focus on the core of their business and their life outside of being a business owner.

If you’re tired of accounting, even if you understand it and are good at it, it’s okay to outsource it. Most business owners get to a place where they’d rather see a monthly report than constantly be updating accounting plans, records, and keeping your books updated.

If you’re tired of it, it’s time to outsource.


These are the steps you can take:

  1. Dedicate your skills and efforts where they are needed, and can profit.
  2. Work with an outsourced accounting firm that ensures every accounting function regarding your business accounting. 


Accounting and bookkeeping is a crucial but challenging aspect of the company. You have to invest both time and specialized knowledge to make the processes flow properly and give you correct and up-to-date info.

Without accounting expertise, there may be several blunders that cause your organization to suffer or possibly go out of business.

You should outsource your accounting tasks to such service providers if your company exhibits any of these signs or warning flags to produce greater work flexibility, better organization, and better management.

Moreover, it is highly critical that you talk with an experienced CPA while auditing your accounting department. You may never know the tax credits available and how you can take advantage of the right tax strategy to reduce tax liability.

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