A small business or a startup in its infancy stage can easily get away without having the need for a full-fledged accounting department. Naturally, the number of transactions they engage in are far limited, and there’s very little need for such an investment since paperwork is relatively uncomplicated. However, soon enough, when small businesses transform into larger ones their number of transactions slowly increase and their paperwork gets more complicated to handle. This is where these businesses must take a step back and think about how they are going to handle their financial management functions.
The two alternatives, as you might have already guessed, remain either enlisting the help of a financial management and accounting firm that is competent enough to unburden you of excess stress, thereby allowing you to concentrate on increasing your productivity. Or, there’s the second option of doing it all by yourself. You must be aware of what entails the creation and lifelong maintenance of an entire department within your organizational framework. Right then, which way should you go? Allow us to present a list of ‘things to consider’ for both your options. We shall leave the decision to you.
If there’s one thing that you should be aware of, it is that an accounting firm is populated with tax shelter accountants and financial management professionals who have been around for long enough to spot the tiniest of accounting blunders from a mile away. This essentially means that you’re guaranteed quality for the fees you’re paying them. Here’s more that you must consider:
An accounting firm can function as per your specific needs. If your business isn’t large enough for it to require a comprehensive package, that is not a concern. With accounting firms, you can change the specifics of the financial management functions you want them to handle your business as per your budgetary constraints. There’s always the option of entering into a contract with a reputed accounting firm that can include other essential functions such as risk assessment, business mentoring, and other paralegal services, such as debt collection and criminal record suspension. On the other hand, when you enlist the services of an in-house accounting department, you are essentially tying yourself up with regular salary alongside all the other standard benefits that would entail.
As we have already mentioned above, the primary reason why firms (regardless of their size) prefer to rely on the services offered by an accounting firm is that there is a certain quality standard that is guaranteed. This upgrade in quality stems from the fact that a reputed accounting firm consists of professionals who represent some of the finest of their respective fields. A testament to this fact is that the professionals employed at quality accounting firms such as Altitude Accounting happen to be entrepreneurs, tax shelter accountants who are ex-CRA accountants and have observed the financial framework of the land from close quarters. When you have such professionals working on your accounts, there’s very little chance of the Canadian Revenue Agency finding any irregularities. And, in the process, you get to avoid unpleasant penalties.
Here’s the other side of the coin. Traditionally, the standard route for a business was opting for an in-house accounting department that works in unison alongside other departments that operate within the firm. Like it is the case with just about any decision, there are things that work for and against the decision. It all begins with the recruitment process, where you must ensure you hire the right candidates for your very own in-house accounting department. Here’s more on the essentials you should know about:
When you’re in charge of your financial management functions, you retain complete control over the policies and functionalities of your business. Your in-house department operates according to the direction you set forth, as there is always a fear of authority among juniors. This is perfect for those entrepreneurs who prefer things to run as per the systems they design. However, the same sense of control over an in-house department can backfire when the members of the department turn into ‘yes men’, and operate mechanically even if they have objections with the way things are decided by you. The problem with the same is that your firm lacks someone with the requisite authority to challenge you when they disagree with your strategies.
The principal reason why there’s a risk in opting for an in-house accounting department is that there is very little flexibility that comes with it. For instance, you might believe there is a requirement for four or five personnel members as a part of your financial management department. The problem with freezing on those five personnel members is that there is an uncertainty about the requirement for the same, assuming there is a condition when business is not as busy as expected. Under such circumstances, you are essentially paying remuneration for employees that you might not have sufficient need for. Not to mention that you are going to have to allocate additional space to your office premises for your in-house department.
There are things to consider before you can come to a definite conclusion about the route you should take. We have summarized the essential facets of both your options and the final decision lies with you. If there is uncertainty about the specifics of opting for an accounting firm, you can contact us to tell us more about the nature of your requirements, and our team of tax shelter accountants would love to help you.
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