Types of Accounting for Small Business

24 декабря 2019 by Forex Broker business-accounting.net

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The economic situation in the world dictates new rules. The things that a growing market and “full” years used to forgive us when we could afford 5% of the leakage of finance, a stagnant market will not forgive. It’s time to count the money, count, and calculate. Some processes can be made using outsource, some, perhaps, on the contrary, should be developed on in source. Large companies do this regularly, small and medium-sized can do during the lull, in the “low season.” For credit brokers, it usually happens in January and, as a rule, in the summer. 

Peculiarities of insourcing accounting

In everyday language, insourcing is what we do ourselves. Outsource accounting is what we get from third-party performers. The organization can organize any of its business processes according to both schemes. Each of them has its pros and cons.

The main difference between insourcing and outsource accounting is like the prevailing costs. When you insource – more fixed costs, when you outsource – more variable costs. If you have a car, you spend $1 on gasoline on the way from point A to point B. The Taxi charges you $40. If you have your website, you will get a lead for $20, and the supplier will offer it for $150-200. But in fixed costs, outsource wins. They do not exist. Whereas in insource you pay all the time.

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General principles are the following:

  • If you do something for more than a year, insource accounting will undoubtedly be the best way in comparison with outsource accounting;
  • If you are willing to use your resource consistently, it makes sense to insource accounting;
  • If you can sell something after you’re done, it also makes sense to use insource;
  • If you are using something that will allow you to earn more, there is also a sense to turn to insource.

Thus, in some situations, outsourcing will be the best type of accounting. However, the range of such situations is limited. 

The best type of accounting services 

The best type of accounting services in outsourcing. This term is actively used in the market in the last ten years. Outsourcing is a severe type of optimization in accounting for small business. It differs from the traditional accounting services of a freelance accountant in that the company includes the contractor in its business processes. 

We are talking about a full-fledged division of the company, which is a separate legal entity. There is no need to create this group, and you can hire it. The advantages of large companies over single accountants working at home are obvious. The capabilities of an individual, even a professional with extensive experience, cannot be compared with the resources of an entire organization. 

That is, it is not just about reporting once a quarter, but also about compliance with internal regulations and standards, daily maintenance of the company, consulting, building on behalf of the company’s relations with the tax authorities.

Many entrepreneurs take seriously only one reason for switching to outsourcing accounting services – saving money. However, this is not quite right. For small businesses, it is expensive to maintain qualified specialists, but non-professionals in this area are even more expensive. Therefore, turning to an accounting outsourcing company, you can seriously improve the quality of this work.

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