Not only will both of you save time on your switch, but your accountant will also have a sense of your current structure to start with and can focus on making any helpful adjustments instead of toiling over tons of transactions.Īnother reason businesses decide to switch to an outsourced accountant like indinero is because their current solution doesn’t handle taxes. This is a win-win for both you and your new accountant. However, most outsourced accounting providers, like indinero, are able to tap into your existing bookkeeping system (QuickBooks, Xero, etc.) and pull data to recreate your books. Traditionally this involves going through your banking history (general ledger, receipts, and historical transactions) to do some retroactive bookkeeping (super time consuming). This is helpful for both you and your accountant and will help him create your chart of accounts and accounting policies. Many outsourced accounting providers will build a historical financial profile (typically including information from previous months of the current year). If your business has been around for a while, you’ll have prior bookkeeping and tax history. Historical bookkeeping records and tax returns (if you have them) This is most helpful for producing your burn rate and cash runway reports. Planning: If your accountant has your payment schedule, they can use it to plan just as with any recurring expense.In order to properly categorize these payments and create the most accurate journal entries in your books your accountant will need the loan agreements and the corresponding payment schedules. Practical: Your outstanding debts are going to show up as liabilities or equity on your balance sheet and the payments you make against your loans and debts are going to show up as expenses on your profit & loss statement.There are a couple of reasons an accountant needs this information: This helps them thoroughly understand how your ownership or partnerships work, know who the decision makers are, and how to allocate your profits and losses accordingly. Whether you’re a corporation, proprietorship, or partnership, any accounting provider will need to know your ownership distribution using either a capitalization table (cap table) or operating agreement. Your accountant is focused on the financial health of your company, so he or she will look to this document to interpret your basic needs based on age, location, and lifestyle. If it helps, you can think of your outsourced accountant as your doctor and your Articles of Incorporation as your medical records. It gives your accountant a look into your business model and corporate bylaws. This document is the starting point for understanding what your company’s accounting and tax responsibilities are. To verify this information most accountants will request your Articles of Incorporation (aka Certificate of Incorporation or Corporate Charter). How an outsourced accountant learns about your business:Į ssential company information refers to a few specifics, mainly your official company name, incorporation date, location/state of incorporation, and authorized shares/shareholders. Knowing the standard types of documentation, paperwork, and records an outsourced accountant will ask for, and how they will use that information to learn about your business, will alleviate any angst of switching so you can start enjoying the perks of outsourcing. Little do they know that being stuck in a business rut is exponentially scarier than anything they’d have to worry about with switching. More often than not, this reluctance is based on a lack of understanding of what to expect (and a little fear of change). Larger companies stretch the limits of their current bookkeeper’s bandwidth or find that having a controller or CPA and their outside resources get too expensive.Įvery business owner is motivated by the goal to run a more efficient business.Įven though the pain is common, most business owners still hesitate to outsource their current bookkeeping and accounting tasks. Small teams reach a point where doing it themselves becomes too time consuming, or QuickBooks gets frustrating as the business gets more complex. In my conversations with entrepreneurs, I’ve heard many reasons for why businesses decide to outsource accounting.
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