Bookkeeping Services: Criteria and Costs
What is bookkeeping anyway? Bookkeeping is one of the tasks of accounting, or more precisely of external accounting. Accounting documents all so-called business transactions. These are all transactions that affect the assets and transactions of a company, such as customer transactions, wage payments or loans.
Our firm offers a complete accounting service. The accounting is done by us according to the individual needs of the client.
Find out what external accountants can do for you and what the service may cost.
- What are the advantages of external accounting services?
- Checklist: When does an external accounting service make sense?
- Tax consultant or accountant: choose outsourcing solution
What are the advantages of external accounting services?
Many self-employed people assume that outsourcing bookkeeping is only worthwhile for large, already established companies, but this assumption is counterintuitive. Especially companies in the start-up phase or small-to-medium enterprises are very burdened by the effort and costs of in-house bookkeeping.
Accounting is a ‘resource eater’
For non-professional or self-taught accountants, internal accounting quickly becomes a real time-waster, because routine is missing. You or your employees have to invest a lot of time to familiarize yourself with complex financial and tax issues. Not only it is not very efficient, but it also harbours some dangers. Missing receipts, accounting errors or missing procedural documentation can result in fines if the tax office investigates. In order to meet the requirements of the legal regulations, you as a nonprofessional must invest a lot of time and energy to familiarize yourself with the subtleties. Even the smallest error in accounting can lead to problems with the tax authorities, as the accountant automatically assumes civil and criminal liability for errors. Ignorance does not protect from punishment in this case either.
Rising wage costs for accountants
Due to the growing demands for proper accounting and the retention and documentation of records, the salaries of accountants are also rising. Specialists are not only difficult to find, but also expensive. Especially for a young company, new hiring can quickly become a financial challenge.
Which is often forgotten: The cost of the accountancy does not only include the wage costs, but also the setup of a workplace: This includes the appropriate accounting software and the regular purchase of user licenses. If you want to keep the in-house accountant up to date with the latest case law, you must continue to plan for costs for necessary further training and educational materials.
Financial efficiency: outsourcing budget is transparent and plannable
The advantage of outsourced accounting is that it can be easily budgeted month after month. Accounting service providers usually offer two different price calculations: Either the prices are based on the number of bookings made or the sales total booked.
Checklist: When does an external accounting service make sense?
Accounting is a permanent topic for every company. But when is the right time for you to think about outsourcing? With the help of this checklist, you can find out whether your company could benefit from external accounting.
- Your company does not yet have an internal accountant and you already feel that your core business is working to full capacity.
- You or your employees do the bookkeeping themselves, but you don’t have time for extensive training in bookkeeping and training on innovations and updates.
- You don’t want to run the risk of being held responsible by the tax office for accounting errors.
- You have neither the time nor the financial resources to hire your own employees for accounting.
- You want to avoid absences due to vacation or illness that can occur when hiring your own employees.
External accounting services: Flexible Models
The complete outsourcing does not make sense for every business. Fortunately, there is a variety of outsourcing solutions that you can flexibly hand over to tax consultants and accountants.
You can outsource the following areas of accounting:
- Financial accounting
- Accounts receivable/accounts payable accounting
- Profit and Loss Account (P&L)
- Business evaluation
- annual financial statement
- tax returns
- payroll accounting
Define criteria for external accounting
Before you choose an accounting service provider, you should define your own quality criteria. You should always pay attention to these key data:
- Price/performance: Prices are within your budget, but are not suspiciously low. The latter can already be a first indication of the poor quality of the services.
- Data protection: Your accountant or tax consultant is certified. This ensures that your invoices, receipts, and other sensitive data are protected.
- Liability: The service provider assumes liability for any errors. So you don’t have to worry that the tax office will hold you responsible for these errors and will even impose fines if the worst comes to the worst.
- Security and continuity: In the event of the insolvency of your accountant or tax advisor, it is essential that you are covered. This is particularly important in cases of liability, but also when it comes to meeting deadlines.
- References and experience: Not everyone who calls himself an accountant also has the knowledge required for complex financial accounting. Clarify in advance what training and experience an accountant brings with him.
Tax consultant or accountant: choose outsourcing solution
Your individual requirements determine whether it is better to outsource your accounting to a tax consultant or an accountant. The reason for this is simple: both professional groups are each responsible for different accounting tasks.
Accounting by a tax consultant
If you have your tax advisor do the bookkeeping, you will receive several services from one source at the same time:
- Tax advise and preparation of tax returns
- Preparation of the balance sheet and annual accounts
- income statement
Accounting from an external accountant
Accountants work either freelance or as employees. Unlike a tax consultant, an independent accountant is not allowed to perform all external accounting tasks. Please also bear in mind that “accountant” is not a protected professional title. Activities an accountant may perform:
- Data acquisition according to documents assigned to an account by an authorized person
- Data acquisition according to booking instructions of an authorized person
- Booking, control, and documentation of current business transactions
- tax registration
- payroll accounting
- Carrying out mechanical operations in the keeping of books and records required for the taxation.