Category Archives: Small Business

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.

Artificial Intelligence and Accounting – The Challenge of ‘Now’

Although we can understand the past (what we’ve experienced) and try to predict the future (what we can dream up), often the most difficult thing to understand is what is happening RIGHT NOW. And nowhere today is that more true than in artificial intelligence.

Over the last couple of years, we’ve all heard buzzwords such as ‘artificial intelligence’ a million times. And there is no doubt that the buzz is real; the resulting advances will change the way we work and live in a fundamental way. According to Andrew Moore, Dean of the School of Computer Science at Carnegie Mellon University, “Artificial intelligence is the science and engineering of making computers behave in ways that, until recently, we thought required human intelligence.”

When it comes to AI, on the one end of the spectrum – let’s call it ‘The Sky Is Falling’ view – the questions are along the lines of ‘How long until I lose my job to a robot?’On the other end – let’s call it the ‘Pie in the Sky’ view – the questions more closely resemble ‘How long until I can live comfortably without working so much since AI will be doing my time-consuming work?’

Our own mental model of the world is shaped by past experiences. When something completely new comes into existence – like the Internet in the 90’s – it’s takes some adjusting to wrap our brains around what it means and how to use it. You don’t have to look very far on Facebook to see that many of us are still on the social media learning curve – ourselves included!

On the other end of the spectrum, our ability to dream helps us to see what is possible in the future. Movies have always tried to predict what the future will look like, sometimes with creepy accuracy…and sometimes not. I looked up a few big misses, and they included gems from movies like Back to the Future II, which showed at various points both restaurants with workout bikes and people floating around on hoverboards (not to pick on this movie too much as it also basically predicted the Cubs winning the World Series after a 100+ year drought). We don’t always get the future right, but many people enjoy thinking about what could be possible.

Although we can understand the past (what we’ve experienced) and try to predict the future (what we can dream up), often the most difficult thing to understand is what is happening RIGHT NOW. And nowhere today is that more true than in artificial intelligence. I’m sure that each of us have two kinds of stories – the first kind involving ‘wow’ experiences (“I can’t believe this system is that smart/helpful/amazing”) and the second kind quite the opposite (“I can’t believe it’s 2019 and this device still can’t do X, Y, or Z”).

Terra and I had the second type of experience while navigating through Seville, Spain, a couple of years ago. I made the mistake of driving towards the center of the old town, and we found ourselves on roads that were so narrow that the sidewalks were essentially acting as rails on both sides. A couple of restaurants had to move a few tables for us to get around them! We were guided to this perilous location by our helpful Google Maps assistant. Worse yet, when we got to a pedestrian square, her directions basically indicated that we needed to stop, pick up and carry the car across the square, and continue on our merry way. Yeah right!?!

Existence in this seemingly perpetual transitory state can seem confusing at best and irritating at worst. Every intelligent system we use (and the companies behind them) are continually trying to improve, but we are (sometimes painfully) living through their growing pains. Technological advances have absolutely enabled us to say “Yes, we can help” to just about every single problem/issue that a client can come to us with.

This is no less true in the Accounting industry. On the one hand we (as Accounting professionals) are experiencing amazing times because of this technological improvement. We are constantly finding new ways to utilize cutting-edge technology to solve business problems. Although we do encounter a lot of similar issues, there are occasions for new problems to come to the forefront. And when that happens, we invariably say ‘I’m sure there is a solution for that!” And then we invariably find it. Technological advances have absolutely enabled us to say “Yes, we can help” to just about every single problem/issue that a client can come to us with.

But the important thing to realize is that artificial intelligence is in many ways in its infancy, and therefore as a small business owner it’s critical to have professionals by your side who have ‘seen it all’ and understand the pitfalls and challenges associated with each system. Despite the amazing progress we’ve made, businesses still need trained professionals who know how to scout out the errors or anomalies in an imperfect software world.

We at Joy Accounting have built a library of knowledge based on these particulars, including how well specific systems work together (or not). Recently we noticed some minor calculation errors in one of our accounting programs that, had we not known what to look for, would have gone unnoticed and could have affected clients negatively. This latter example is more related to automation than AI per se, but the same idea applies – you need someone who knows the ins and out of the software you are using by your side. Despite the amazing progress we’ve made, businesses still need trained professionals who know how to scout out the errors or anomalies in an imperfect software world.

I’ll leave you with a Forbes article from 2018. Although the article clearly suggests that artificial intelligence is the future of accounting (in fact that’s in the title!), it also states that “Despite being very promising, the accuracy of the machine learning algorithms used in most of today’s solutions still needs to significantly improve in efficiency to avoid accounting errors and really fulfill their promise of automation.”