- Welcome to The Journey.
Today we're going to talk about
how to outsource accounting and save your time.
So if you're like most business owners
dealing with accounting tasks
doesn't exactly spark joy,
but here's how you can take accounting off your to-do list
and find more time to focus on your business
through the life changing magic of outsourcing.
- Now, this content should not be construed
as legal or tax advice.
Always consultant an attorney or tax professional
regarding your specific legal or tax situation.
Now that we got that out of the way,
when we talk about accounting,
what we're really talking about
is three interlinked processes,
bookkeeping, accounting and tax planning.
Let's start with bookkeeping.
So bookkeeping tracks all your day-to-day transactions,
money entering and leaving your business.
It also categorizes those transactions,
so you can see how you're spending money
and how you're making it.
- And the second process accounting.
Accounting takes information from your bookkeeping,
crunches the numbers and shows you the big picture.
Financial reports like income statements,
and balance sheets show you how much money you're earning
and how much you have to work with.
- And last the tax planning involves
looking at your bookkeeping and accounting figures
and using that info to save as much as possible on your taxes.
These three areas often overlap.
For instance,
your bookkeeper might prepare financial reports for you
and your accountant may help you with your tax planning.
- So you might be thinking why outsource your accounting?
Well, accounting eats up time you guys.
There's no way around it.
Even if your spreadsheets are true works of art,
DIY accounting will cut into time
you could otherwise spend,
helping your business grow.
- Accounting is high stakes,
make a mistake on your tax return
and you can get fined by the IRS
or even trigger an audit.
Miscalculate your income for the first month
and you can find yourself coming up short on cash
when it's time to pay ventures.
Accounting is high stakes and small errors
can have big consequences.
- And good accounting takes expertise.
Let's be honest here.
I mean, even if you spend sleepless nights
poring over textbooks,
you won't have the expertise of a professional bookkeeper,
accountant or tax planner,
and that's because they have experience,
they worked with many businesses and understand firsthand
the mistakes to avoid
and when your accounting is outsourced,
you have experts fighting on your side.
- Now let's talk about how to outsource your bookkeeping.
There are two main options for outsourcing your bookkeeping,
hiring a local bookkeeper
or hiring an online a bookkeeping service.
Now let's talk about hiring a local bookkeeper.
So the cost is about 20 to $50 per hour
with usually a minimum of a hundred to $150 monthly.
It's really best for those
small to medium-sized business owners
who want to meet their bookkeeper face-to-face,
or who work with a lot of paper records like receipts.
- So the second option
is to use an online bookkeeping service.
Now that cost can vary.
I know it ranges from, with QuickBooks Online
$25 a month to $70 a month.
And that's best for a small to medium sized business owners
who use online banking and credit cards,
and are comfortable working online with their bookkeeper.
- Yeah, great stuff there.
And now let's kind of switch gears and talk about
how to outsource your accounting.
And let's talk about hiring a local accountant first.
So these accountants will typically charge about
150 to $400 per hour,
depending on their level of experience.
And it's really best for businesses
dealing with a lot of paper financial records
or business owners who want to meet
with their accountant face to face.
- Totally, and another way to outsource your accounting is
by hiring an online accountant.
Cost.
Well, according to Upwork,
the cost of hiring an online accountant on their platform
starts at 20 to $35 per hour.
This is best for business owners
who are already comfortable
with handling financial tasks online.
- And lastly, let's talk about outsourcing that tax planner.
And since I've taken all the local ones,
let's talk about hiring a local tax planner.
So the cost with these according to CPA Practice Advisor
costs an average of $273
to hire a tax planner to itemize your deductions
at both the state and federal level.
And it's really best for the business owners
who want to meet face to face with their planner
or ones who keep mostly paper records.
- Another way to outsource tax planning
hiring an online tax planner.
So I got the online stuff covered here.
So cost starting at around $30 per hour on Upwork
with total price according to scale.
This is best for business owners
already familiar with managing finances online
or businesses in small communities, where
there are you know, slim pickings for tax planners.
- And lastly outsourcing your tax filing.
So this is the final step of outsourcing your accounting
and is to have your taxes taking care of,
thankfully, right?
But this is something that your bookkeeper or CPA
might offer as an additional service.
So reach out to them and see if they can help
take care of those fees for you.
- Yeah and again, this content should not be construed
as legal or tax advice,
always consult an attorney or a tax professional
regarding your specific legal or tax situation.
That's a wrap.
You've learned how to outsource accounting
and save your time.
Be sure to comment below and subscribe to our channel.
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so you can see these episodes first.
This is The Journey.
We'll see you next time.