In the last article on upgrading your accounting system (http://bit.ly/CamusoCPAAcctI), we discussed developing basic recordkeeping systems for beginning investors and small business owners. As your finances become increasingly complex your focus will shift towards accounting automation, outsourcing accounting and hiring an in-house CFOs.
Automated accounting systems such as Quickbooks or Xero will increase your expenses but save you time and costly errors. As businesses expand, monthly revenue and expenses will continue to increase making it untenable to effectively manage your finances using a spreadsheet.
A system such as QuickBooks or Xero enables all your business bank accounts and credit cards to be linked in one central location. Further, each income and expense item is charted to specific income and expense categories to ensure the most accurate and advantageous tax position when filing.
At this level of financial sophistication, Camuso CPA recommends having a top-tier CPA set up and chart your account but to manage your monthly accounting tasks yourself to cut costs.
As your business and investments continues to expand to the point where the time investment combined with the risk of error outweighs the savings, it is time to outsource your accounting function to a top tier CPA firm. This is a significant business investment, but allows you to focus on your highest value tasks while still receiving accurate and professional financial reports. Generally, businesses and investors sped about 3-6% of annual gross revenues on accounting.
The transition to working with an outsourced accountant from a self-managed process usually takes about two to three months in which you should be virtually removed from the management of your accounting.
Camuso CPA PLLC offers a series of services to develop and tailor a first-rate accounting system for your business needs. Reach out to our team regarding any questions about commingling funds or establishing a first-rate accounting system.
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