3 ways to minimize accounting cost without compromising
Amidst the initial hustle and bustle of starting a venture, usually we tend to overlook accounting processes. But even if it does not fit in your main priorities, accounting is part of company’s compliance costs which is generally unavoidable. Here are three things you should know that will help you put the accounting system in place at a lower cost, without having to compromise with the compliances.
Rely on accounting system rather than a ‘person’
Instead of focusing on managing mundane accounting transactions and documentation, the entrepreneurs should focus their energy on their core business processes—on developing products and acquiring customers. This way the startups can reduce opportunity costs of managing the books-of-accounts.
The entrepreneurs should design a robust account control system that helps maintain checks and balances in transactions,and has control points to avoid losses and leakages. The system should also define responsibilities and accountability of the people involved in the accounting processes and transactions, and a review mechanism that helps identify discrepencies. The processes should run automatically by the system rather than on the discretion of any one person. With the system in place, the top-management can limit their role to merely reviewing the results.
Hire part-time accounting personnel
We can assume that startups are not generally bombarded with huge volume of transactions. So there is no point in hiringa full-time accounting personnel and keeping him/her underutilized. A part-time service providers make more sense in terms of the cost and the flexibility with working hours and working terms. However, the downside is that you may not find qualified accounting personnel to work for you on a part-time basis. In fact, hiring unqualified part-timers might backfire and may increase your compliance and legal costs.
Outsource your accounting function
There are account outsourcing firms that provide all the basic accounting services like bookkeeping, taxation management and financial statement, along with part-time services with flexible timings. A few accounting service providers provide particularly structured services for startups. Outsourcing accounting processes of the startup, on the other hand, will free the time for the top-management to set up concrete account control and accounting management systems that will help fulfil all compliance requirements.