Challenges Faced By Small Businesses In Managing Accounting

November 19, 2013 6:27 pm0 commentsViews: 138

challenges1Small businesses face challenges different from those of other businesses, and these challenges can impact key functions, such as bookkeeping and accounting, before eventually affecting other services provided by the business. 

 

Multitasking

Most often, someone involved in other functions or services will be pulled out to also manage and handle the bookkeeping responsibilities in a small business. While this is not convenient for anybody involved in the business, it tends to be a quick-fix solution and one that doesn’t involve any additional costs either.  Multitasking can take care of immediate concerns, while leaving the road open for larger issues and problems to follow.

 

Compromise in quality

Though the persons handling finances part time does have some knowledge of financial services, they would not be equipped to manage all aspects of a small business’ bookkeeping and accounting needs. This can compromise the business.

 

Overall loss in productivity

Because someone not trained to do so, is working on your bookkeeping, services and expertise offered by you to other clients may suffer in quality, leading to overall loss in productivity for a small business, particularly. Data entry needs a high-level of accuracy. Any error at this level can cause your accounting to be flawed. Eventually, your financial reports could also reflect unreliable figures of available cash reserves, etc. For a small business, the definition of financial loss can be radically different from that of a regular, large one. In a small business, even small losses can be compounded to create an overall deficit in the budget.

 

Stressed out tax preparation

For a small business, tax times can be stressful, especially if the bookkeeping in the past year has not been adequate or there are areas in the operations or services portfolio that the accounting has missed out on. This can put undue stress on the lone accountant who does your tax preparation at the end of the financial year, while also increasing risks of financial errors.

 

How can this be helped?

  • Outsourcing your small business’ bookkeeping needs can be a very efficient way of ensuring quality in financial reports and improvement in overall services. Outsourcing will ensure your work is done by experts, in this case, someone who understands the elements of small business bookkeeping services.
  • Outsourcing reduces your need to invest in infrastructure and skilled manpower. 
  • Accuracy and well-managed financial reports are the backbone for any business. Outsourcing can help you ensure reliable financial records, through sound bookkeeping.

 

The impact of sound practices in accounting and bookkeeping services is the same for both, small-sized and large businesses. Ideally, hiring professionals for your accounting and bookkeeping needs works out best for your business; or outsourcing your requirements to a professional can also ensure reliable financial reports for your business.

 

Outsourcing your bookkeeping will also ensure your tax preparation is thorough and on-time.

 

About Author:

logo_analytixAnalytix Solutions Editorial Team

Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

 

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