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When Your Business Needs An Accountant In Addition To Software

This article was originally published by It’s BlueVine’s mission to be the fastest and easiest way to get invoices paid, helping small business owners to free up cash for paying expenses and growing their company.


Small business owners often have to work with sparse teams and don’t have the funds to keep tons of extra staff on payroll. One recurring dilemma that many of our customers tell us at is that they’re too busy building their businesses to focus on upgrading their accounting systems.

Many fairly experienced and successful entrepreneurs continue to use excel or paper invoice records to keep track of their finances because it’s the way they’ve done it for years, or because accounting software seems overwhelming. While these business owners may be confident in their abilities to run mini-empires in sophisticated fields such as management, marketing, IT, consulting, advertising or PR, they sometimes put off accounting until tax season because it feels too time-consuming, daunting or complex. When you’re running a company and wearing so many hats, it’s understandable that you don’t want to don yet another. You may be accustomed to your system and the idea of setting up accounting software may seem like a chore, but the irony is that avoiding your accounting could cost you more time and money in the long run.

Enlist an Accountant (We did!)

Setting up accounting software will take about 15 minutes and mastering it will take a few hours. It may seem overwhelming, but the relatively small amount of time and effort it takes to properly set up accounting software will pay off in the long run. You can set up the software yourself or get help from an accountant, depending on how confident you are in your accounting skills. To truly understand the benefits of getting help from a professional account and setting up your own software, we interviewed Beth Damis, an accountant and consultant who’s been coaching small businesses for years.

BlueVine: What are the pros to accounting software vs excel?

Beth Damis: Excel can work to gather tax information for businesses that don’t have many transactions to record. The problems arise when someone accidently changes a cell or deletes data. Many accounting packages offer two essentials, which help alleviate the concern of data entry errors and deletions. These essentials are reconciling, which is used for crosschecking data entry and password protecting the data so it cannot be changed.

BlueVine: When (in a company’s growth trajectory) should the business set up online accounting?

Beth Damis: Now. There are many choices of SaaS accounting packages available to choose from. In addition, companies can use hosting services like Harborcloud to host a desktop accounting package if they cannot find a SaaS product that works for them.

BlueVine: Should folks check with an accountant to make sure they’re properly using their accounting software?

Beth Damis: Yes! There are many types of accounting software for businesses to choose from which can be set up in different ways. In order to ensure proper regional and federal tax reporting, these products need to be set up correctly. One of the biggest business mistakes I regularly encounter is a non-accountant misfiling their taxes for years because they were including something as a business expense, such as a loan, which is not an expense. These mistakes can become very costly and stressful in an audit situation.

A great accountant can also teach businesses how to read financial statements and how to run meaningful management reports to help run the business. Not all accountants are familiar with all the accounting packages and a business should hire someone to review their setup who has experience with the program they are using. For example, I teach other accountants and CPAs how to use QuickBooks properly. I know many CPAs who only know how to enter journal entries in QuickBooks and have no idea how to use items and forms. Is there a potential downside to using software versus hiring an accountant?

Beth Damis: Using accounting software to manage the business makes good sense and can reduce costs if the information is organized properly. No company should buy accounting software off the shelf, set it up, and use it if they have no accounting background. I see errors all the time that end up costing clients more to fix than it would cost them to pay someone to set up the file and receive training on how to use it.

BlueVine: What is the upside of using accounting software versus hiring an accountant?

Beth Damis: For many of my clients who are doing their own bookkeeping or have accounting departments, I perform monthly or quarterly reviews. The reviews by client vary and consist of services such as: reviewing financial performance, helping prepare regional and state taxes, and providing ongoing training.

Using accounting software and using an accountant complement each other. Accountants can help guide the business on staying compliant with all the business tax and license regulations. They can help the business decide which performance indicators to watch. For example, many of my clients think with volume they will succeed. When we rearrange their file structure, we often isolate a customer or a service they are selling that is consistently losing money. This allows the company to make adjustments and their profits rise.

BlueVine: When should a business hire an accountant? Is there a certain revenue level at which an accountant is absolutely necessary?

Beth Damis: Anyone running a business should have an accountant supporting them, period. An objective opinion from an outside party is beneficial; accountants do more than prepare taxes. Prior to starting a business, I suggest finding a great accountant that provides business consulting as well as tax planning. Spending a couple hours talking to a great accountant is worthwhile for any business – at any revenue level, at any stage in their business – well before year-end.

BlueVine: Are there any special considerations for marketing, advertising, creative agencies and other service type businesses?

Beth Damis: An issue I notice in the service industry is they are often unaware of all their business tax obligations. For example, in Washington State our sales/use tax laws can be extremely complex, with some services being taxable events, and others non-taxable events. One of my graphic design firms found this out the hard way when they hired a computer company to upgrade and provide support for their company. In a sales and use tax audit several years after the work was done, they were assessed use taxes on the work that was completed, since the computer company had not charged sales tax. In addition, the graphic design firm had to pay the state penalties and interest.

Business regulations varies from state to state and can be complex. Having a consultant on your side can alleviate some of the compliance confusion.

Another area where an accountant can be very useful is in helping develop reports that give valuable management information. For example, while one customer may generate the most revenue for a consulting firm, that customer could potentially also have the lowest profit margin. Profit margin is Revenue minus Cost of Sales. Some customers take more time and energy than others. If you are not tracking the time and expense per customer and per revenue stream, you are missing out on this valuable information. In accounting we call this information tracking “job costing”; it helps us determine how much profit is generated so we can make decisions on which customers to keep and which services we should sell more of. It also helps determine which customers to cut loose and which services are actually losing the company money.

The takeaway for small businesses & startups

To avoid getting tangled in receipts, legal troubles down the line, or risk potentially losing information with excel, it’s imperative for every small business to set up online accounting. And you shouldn’t have to do it alone. You can enlist the help of a professional like Beth Damis who can help you set up the program, recommend the best type for your business, and review your books to make sure that your software is installed correctly. With a few hours and a little patience, you’ll become an accounting semipro and gain the confidence to maintain your own books. You’ll soon find that it won’t just save you time, it will save you money and help you understand how to better run your business.


Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at