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Aprio Cloud Blog

September 25, 2020 at 8:00 AM

When to Hire an Online Accountant vs. Online Bookkeeper

Outsourced Accounting

Starting and growing a business takes a lot of patience and persistence. It also takes an incredible amount of focus, which is why many businesses decide to hand over their financials to a professional who will make sure all of the numbers add up. Despite the upfront costs, Outsourced Accounting can save you money in the long run.

When to Hire an Online Accountant vs BookkeeprOnce you have decided to outsource your accounting, which financial professional is the right one to employ? While on the surface online bookkeepers and accountants seem very similar, each offer different expertise and services.

Let’s take a look at what online accountants offer and when you should consider hiring one.

Cloud Accountants are Beneficial When You Need Help Writing a Business Plan

Getting an accountant on board at the very beginning of your business will save a lot of time and money (and hair pulled out in frustration). An accountant can add valuable financial projections and reports to your business plan that will help make it professional, and more importantly, realistic.

Online Accountants are Essential When You Have No Idea Which Legal Structure Suits Your Business Best

Should you set yourself up as a sole proprietorship, partnership, Limited Liability Company (LLC), or corporation? And if you choose a corporation, do you choose S or C classification for tax purposes?

Every business is different and deciding which legal form is best for yours is determined by a number of factors. An experienced accountant will help you select the right structure and explain the financial benefits and risks that come with each.

You Need an Accountant Anytime You Have to Deal with the US Government

Even if you’re a sole proprietor with no employees, attempting to file taxes yourself can bring on a panic attack similar to the one you experienced while taking your SATs. A qualified accountant doesn’t flinch at the confusing government paperwork and can file your taxes accurately. They can also help you stay up to date with the latest tax laws and be your advocate should you ever be audited (which is a lot less likely when you use an accountant!).

Besides taxes, there are other times your business may need an accountant to help you interact with the IRS and other US Government entities. For instance, you’ll need to file compliance documents and keep your company status updated with various federal, state, and local agencies. An accountant can also help you prepare annual statements of accounts, maintain records of directors, and ensure all employee tax codes are recorded correctly.

When You Need Help Managing Cash Flow, Online Accountants Give you Peace of Mind

Money coming in… and money going out — Cash flow seems like a simple enough concept, but in reality, it can be quite complex. Inadequate cash flow is one of the top reasons small businesses fail.

An outsourced accountant can help you maintain proper cash flow by developing an investment strategy, selecting equity and option allocation, maintaining a corporate budget, determining the best asset classes to invest in, overseeing critical business numbers, supervising strict debt collection policies (e.g. getting the money owed to you), and determining the right financing options should you need capital for expanding the business.

When You Want to Grow Your Business, an Outsourced Accountant is Critical

The thought of growing your business is exciting, but the transition can be stressful without someone to guide you. An accountant can help you with important decisions like deciding when to rent a larger office space, buy more equipment, or hire new employees. They can also help determine the best time to introduce a new product or a service to your customers. Expert accountants can even advise on research and development tax credits when you are developing new offerings.  With the insights these financial professionals offer, you stand a better chance of making sound business decisions.

When Do You Need An Online Bookkeeper

This is the point in the post where I’m supposed to talk about the situations when you should hire an online bookkeeping service. I’ll admit, the title of this post was misleading. The truth is, you don’t need to hire an online bookkeeper.  Ever.

In the past, you often had no choice but to hire both an accountant and a bookkeeper. Bookkeeping was seen as too unprofitable for accounting firms to offer as a service to their clients. Therefore, most accountants chose to focus on high-level services such as tax and consulting. Many firms still operate under this assumption.

But with the development of cloud accounting software solutions, this has changed for tech-savvy firms. Now, forward-thinking accountants can offer clients bookkeeping, tax, and everything in between.

Bookkeepers usually manage the smaller, day-to-day financial tasks such as accounts receivable, accounts payable, payroll, and reconciliations. When you work with an online accounting firm such as Aprio Cloud, we not only act as your financial adviser and provide the services previously mentioned, we also handle these day-to-day tasks. Think of us as your financial Swiss Army Knife – no matter what your business needs, we’ve got you covered.

Not only will an online accountant make your life a whole lot easier, they will help you at every stage of your company’s development, enabling you to reach your ultimate goals.

Interested in getting started with Outsourced Accounting? Aprio Cloud is happy to chat. Book a free consultation today.

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Editors Note: This post was originally posted in April of 2016 and has been completely revamped & updated for accuracy and comprehensiveness. 

Bruce A. Phillips, CPA

About Bruce A. Phillips, CPA

Bruce Phillips is the Partner in Charge of Aprio Cloud, an early adopter of cloud technology for accounting and other businesses. More recently he has been featured by Xero, Expensify, Gusto, Receipt Bank, Jirav, Veem, Bill.com, and Hubdoc, all of whom he has close relationships with.