| In today's society we are constantly being presented | | | | If the hourly wages for an employee including benefits, |
| with opportunities and suggestions that we can do | | | | equals $25 per hour and a business owners has to |
| everything ourselves and that it will save us money. | | | | spend an additional 2 hours each month managing and |
| This extends to business as well. Software companies | | | | training the employee then the direct costs are $475. |
| are selling bookkeeping software to run your business, | | | | The indirect costs are not as transparent or as easily |
| there are web site offering free advice for managing | | | | measured but may be even more significant. The |
| your business, and you can go to hundreds of | | | | indirect costs can include lost sales opportunity, |
| websites to become incorporated at a fraction of the | | | | decreased efficiencies and higher expenses in |
| cost of going to a qualified professional. | | | | operations, a decrease in customer service or overall |
| Does a small business actually save money by doing | | | | quality of services or products being sold, simply due to |
| these tasks themselves or do they inevitably cost | | | | the business owner having less time to spend |
| themselves money, time and opportunity. A small | | | | managing the operations side of the business. |
| business owner has to wear multiple hats including | | | | Indirect cost may even include mistakes due to an |
| being the president and owner, the sales and | | | | insufficient understanding of the subject matter, laws |
| marketing team, financial and accounting specialist, | | | | or filing deadlines. It may also include in an inability to |
| administrator, HR guru and technician. | | | | access financing due to an improper corporate |
| The key to success for any business owner is to | | | | structure or poor financial reports that lack supporting |
| identify those tasks that are essential and productive | | | | backup documentation. |
| to growing their business and seeking assistance for | | | | It has been our experience as a professional CPA firm |
| other tasks. The two most essential functions in any | | | | that has looked at thousands of owner prepared |
| business are sales and operations - finding customers | | | | financial statements that the vast majority of them are |
| to sell to and providing them with the goods and | | | | incorrect and in many instances have contributed to |
| services you are delivering. | | | | the failure of a business. |
| All other functions of a corporation are non-core | | | | Finally, lawyers, CPAs and other professionals will |
| functions. This is not to say that they are not important. | | | | typically spend more than a hundred thousand dollars |
| In fact having a good solid financial and accounting | | | | investing in their education and learning to practice in |
| system is essential to understanding the performance | | | | their respective fields. They then have to pass a |
| of your business and then using this information to | | | | rigorous exam showing a proficiency and |
| effectively manage your business and make informed | | | | understanding of the knowledge in there respective |
| decisions is crucial to your success. | | | | fields. Most likely they will have dealt with hundred of |
| Most business owners do not have the knowledge, | | | | clients and thousands of unique situations. This |
| expertise and/or training in these disciplines to perform | | | | experience should not be minimized or dismissed. |
| these functions correctly. If they do have this | | | | When the investment of hiring a professional CPA is |
| knowledge and expertise, is their time better spent on | | | | matched against the direct and indirect costs of not |
| growing their business and managing their operations | | | | hiring a professional CPA, the decision will be a "no |
| or is it performing bookkeeping and financial | | | | brainer." By hiring a professional CPA firm a business |
| administrative tasks? | | | | owner realizes the following benefits: he or she frees |
| I submit to you that the value of their time is best spent | | | | up valuable time to manage their business; the |
| growing and managing their business. The realty is, | | | | bookkeeping is done correctly so that the owner has |
| when an owner is spending time away from focusing | | | | accurate timely financials to make informed decision; |
| on the core functions of the business he or she has a | | | | financials are available to a banker or venture capitalist |
| direct cost that is associated with performing those | | | | when financing is required; the business owner stays in |
| tasks as well as indirect costs. | | | | compliance with the tax laws. |
| The direct costs are quantifiable and can be | | | | At the end of the day a CPA firm will end being one |
| measured. The cost of an employee or the business | | | | of your most inexpensive but most valued members |
| owner managing his or her own books, running his | | | | of your team. Not tapping into this knowledge and |
| payroll, filing sales tax or payroll tax reports, running | | | | experience puts the business owner that is not utilizing |
| financial reports, etc. multiplied by his or her hourly | | | | these services at a disadvantage to their competitors |
| wages. | | | | who are making use of these services. The |
| If a business owner spends 15 hours per month on | | | | competitors that are utilizing these services and |
| bookkeeping, accounting or payroll tasks and their time | | | | tapping into this experience are saving time, money |
| is worth $50 per hour or more then the direct costs | | | | and capitalizing on opportunities that will contribute |
| are more than $750 per month. If an employee is | | | | directly to increasing both the top line - sales and |
| performing these tasks then all wages including | | | | bottom line - net income. |
| benefits and payroll taxes have to be factored in as | | | | If you are not currently using a CPA and trying to go it |
| well as the time an owner spends managing and | | | | alone, give a CPA firm a call and learn how they can |
| training the employee. | | | | put their experience and knowledge to work for you. |