Building Your Best Accounting Team

As small businesses grow, one of the first areas where the need for help becomes obvious is accounting. It is possible to ‘go it alone’ for a while, but inevitably accounting-related tasks crop up and simply keeping up takes away evenings and weekends from the small business owner. And I’m pretty sure that’s not why you started your business!   

Additionally, small business owners don’t want or need just any warm body to perform accounting tasks. They need someone who can tell a story with the data – about the direction of the business, potential blind spots, and whether the current business trajectory is leading towards the realization of goals. In short, a good accountant (or accounting team) is absolute gold for the small business owner.

Most business owners recognize the need for solid accounting help – but how should you decide whether to hire an internal employee or work with a contractor?

Our Perspective: Internal Staff Versus Outside Expert

Before we even get into our analysis, it’s important to note that whether you are deciding on an internal employee or a contractor, the range of services and skills, ability to handle the complexities of your business, and overall cost will vary greatly. This underscores the fact that it’s critical to have a talent evaluation system in place, because the worst thing a small business can do is make a bad hire, period. (In fact, I think that will be our next blog!)

Note that this analysis is also focused on small businesses that are just crossing the threshold of needing accounting help. The decision of whether to build an internal team or rely on an outside expert can certainly change as a business gets larger.

Also, please note that the pros for the contractor perspective below is heavily influenced by our own model at Joy Accounting Services. We utilize video technology and we operate remotely, but that is not true of every contractor. Therefore, our comparison is focused on an on-site employee versus a remote contractor.     

First, I’ve listed the pros/cons of an on-site employee from our perspective.

Pros:

There is something nice about having face-to-face time with people and getting to know them in person. This is easier with an onsite employee who is physically present.

With a set schedule you know exactly when and where you can find this person.

Cons:

Small businesses may not require a full-time employee (or they may require 1.5 employees, which would lead to the same issues). If you hire a full-time person, then it’s your responsibility to keep them busy with interesting tasks for 40 hours per week. If you instead opt for a part-time employee, you are eliminating a large part of the job-seeking population and less likely to find the right fit that has the skills you are looking for.

If you hire one person you are limited to the expertise and knowledge that individual brings to the table. This means that when (inevitably) things come up outside of the individual’s skillset, you’ll need to hire a contractor anyway in addition to the employee.

Hiring an employee carries responsibilities that hiring a contractor simply does not. This includes specific laws and requirements that vary by state. But this also includes more informal responsibilities related to training, managing and covering for vacation time, and general people management which can all be very time consuming for a small business owner.

The second pro listed above can also be a con; the lack of flexibility with an on-site person means that if you need them outside of working hours, you’ll have to wait until they are physically back in the office.

Turnover is a huge issue for companies. Individuals invariably move on, sometimes due to things beyond their control.

Next, I’ve listed the pros and cons of the remote contractor model (specifically focused on the Joy Accounting model).

Pros:

Good contractors are able to design a team for you that will meet your needs. At Joy Accounting, we typically provide high-level (Controller-level) guidance along with completing day-to-day accounting tasks. Allowing a contractor to build a team means you don’t have to staff in the rigid way that on-site employees often require. In our model, you get two (or more) skillsets rolled into one overall offering.

A word that sums up our model is ‘flexible’. As a contractor, we can design offerings that make sense for exactly what you need, so that the scope matches the value that you are looking for. The difficult thing about the traditional employee model is that changing the scope is very difficult – if you bring someone on for 15 hours of work and you find that you actually need 30, then you’ll likely have to find someone else.

As a contractor, we work with many other clients, which means we are always problem-solving. And because we see a wide spectrum of client needs and design solutions for them, this means that we can often take lessons from another situation and apply it to your company.

The nature of our model means that we are continuously learning and adjusting. This continuous learning enables us to bring thought leadership as a team to our clients in ways that they wouldn’t expect.  

Contractors are more able to operate within the flow of the business, so that when you need them they are there, and when you don’t need them you are not paying for a warm body sitting in a seat.

As a small business owner, you don’t need to worry as much about ‘people management’ with a contractor as you do with your own employee. If a contractor’s employee is not meeting the mark, it is up to the contractor to make it right. And, if they ultimately can’t meet your needs, it is easier to part ways.

Con:

Contractors are not physically there with you, which means it can be more difficult to build rapport and a relationship. And if it’s truly important to you that everyone is physically present, then you’ll likely want to go with the traditional model.   

In the digital age that we live in, working with an outside expert is increasingly becoming a more attractive option. If done well, it can provide the small business owner with expertise, flexibility, and direction that is difficult to realize via the more tradition staffing model.

Want to Start a New Business? Ask and Answer this One Simple Question

Earlier in January we posted a blog on what you need to do to start a new business in Washington state. I recommend that you check this out if you are considering starting a business as it gives you some tactical steps to take to be successful (including some that, if you miss, can lead to a lot of headaches later).

Before you even get to tactics, however, it’s important to ask and answer this very simple question: What do I want my business to do for me? This isn’t just a starter question; this is as important for the individual who has owned a business for 20 years as it is for the person who is just starting a business. This answer becomes the North Star, and the business owner who stays true to his or her answer will have more energy, fulfillment, and confidence than the one who doesn’t.

Although this question is simple on the surface, it takes continual honest and sober assessment as you build your business and time goes on. It is essential to have this North Star in place, stay aligned with it, and continually assess if you are meeting it. Because without this alignment, owning a small business can be difficult and lonely. Many more people choose to have a typical job with typical hours with typical benefits – and there is absolutely nothing wrong with taking that path if your own small business is not doing for you what you need it to.

But hey – we are in the small business game, and we wouldn’t change it for a second. We absolutely love what we get to do each day. Below are a few things to think about as you think about that simple question – What do I want my business to do for me?

Don’t Be Afraid to Get Personal

When you work for a large corporation, you are essentially opting in to its’ values (and associated perks). If bringing my dog to work is the most important thing to me, I’m going to choose to work for a company that allows me to bring my dog to work. But you don’t really get to bend the company rules – unless you are the next Albert Einstein! Additionally, you don’t really have the luxury to think about how your personal needs are going to be met; you figure that out on your own.

The beautiful thing about owning your own business is you can focus more on the personal side of things – some might say that you can be a little selfish. But I would dispute the ‘selfish’ notion; being able to set the terms enables us, as small business owners, to have a balanced life and be able to give back to the community in other ways. In fact, I’d say what the world needs right now is fewer frazzled, stressed-out people running around!

Is it important to you that you are home to take your son to soccer practice? Or that you can meet your spouse for lunch on Fridays? Absolutely build those types of things into your plan, and don’t be willing to give them up!

Review Your Preconceptions

We all have preconceptions about what it means to own a small business. A fairly common mindset is that you have to work long hours, barely make it month to month, stress out about costs like health care, and constantly do things you don’t like (such as accounting). Many people still start a business despite that, as they believe it is worth it because they are doing what they love and not answering to “the man”.

These preconceptions are further cemented by noticing how small businesses around us operate.  Whether we realize it or not, businesses are trying to impact our experience of their product/service from the moment we wake up to the moment we go to sleep.

Owning a small business has made us even more hyper-sensitive to these daily business interactions. We notice everything when we are connecting with other businesses – and not just the obvious things like customer service. We see subtler things as well, like when a business undervalues its’ services or is willing to work with people who don’t match its’ values.

As you analyze what you want for your own business, observe others – which business owners seem genuinely happy and how are they doing it? Which business owners seem miserable running a business and why are they so hassled or frazzled? And make sure that you are reviewing your own preconceptions. Don’t be willing to settle for less of an experience just because you think being a small business owner equals a frazzled life – it doesn’t have to!

Your Business (and your Answer) Will Change

In some ways, it’s easier to ask and answer ‘What do you want your business to do for you?’ when you are starting your business. When you’ve owned a business for any length of time, it really becomes a part of who you are. Walking away from a business is not easy – nor is making significant changes even when they are required.

As you embark on your journey, you need to understand that both your business and your answer will change. Your business will grow and it will face and overcome new challenges. Five years from now your business – the structure, people, and services – may look very different. But as your business grows and evolves you absolutely need to go back to the key question, because growth for growth’s sake is not worth it. Every change to your business needs to be viewed with the same approach that you started with, accounting for changes since you started.

Additionally, know that the answer to this key question will change as well. Perhaps you were single when you started your business and you got married along the way. You’ll definitely want to revisit the question and re-set what you’re doing so that the business is working for you.