“Over half of business leaders say that payroll services have been affected by the shortage of payroll skills. What does that mean? It means that there will be late payments, inaccuracies, noncompliance, and reputational damages as well,” says Ben Dale Gough, the Senior Service Director at ADP, in a webinar.

While Payroll might appear to be a back-office function, it is far from the truth. As Ben points out, a single mistake in payroll can impact the morale, trust, and compliance, and may lead to irreparable damage. That is why hiring the right Payroll Accountant isn’t just a nice-to-have—it is essential. 

When Do You Need a Dedicated Payroll Accountant?

A Payroll Accountant is responsible for maintaining, analyzing, and verifying the financial records of an organization. Some of the common payroll functions include calculating salaries, managing benefits and compensation, and withholding taxes and deductions. 

Small firms often tend to have a single resource who can handle the roles and responsibilities of multiple people. But there might be a situation when you need a dedicated Payroll Accountant. If your HR team is overwhelmed or your finance team is juggling to play too many roles, payroll errors are bound to happen. Your sign for hiring a dedicated payroll accountant can include: 

• You have more than 20–30 employees, and pay cycles are frequent

• Your business operates across different geographies

• You need audit-ready records for tax, compliance, or funding

• Your existing team spends too much time fixing payroll issues

• Employee satisfaction is dipping due to delayed or incorrect payments

If you do not have the capital, means, or resources for hiring a full-time Payroll accountant, you might consider outsourcing. It can protect you from legal issues, financial penaltie,s and high attrition. 

How to Hire the Right Payroll Accountant with an Attractive JD?

The Payroll and Bookkeeping industry in the US has grown at a significant rate of 2.8% between 2020 and 2025. Employment in this field is projected to grow 6% between 2023 and 2033. 

Finding the right fit for your organization begins with you being clear on what it is you are looking for. Do you want your Accountant to perform the basic salary calculations, or are there nuances that they need to get right? Is your employee hierarchy straightforward, or does the Accountant need to be aware of the several band grades?

No matter what you are looking for, finding the right team member begins with an impeccable JD. Here are the common factors that you should include: 

• Job Title: Whether you want an Associate, a Consultant, or a Payroll Manager, make sure to explicitly spell it out. There should be no room for confusion as to what you are offering and what the candidates should expect. 

• Role Summary: In about 2-3 lines, explain why this role exists. The candidates should be clear about what is expected of them and how they are contributing to the business goals. 

• Key Responsibilities: This is one of the most common areas where confusion between the organization and the candidates arises once they are part of the team. Adding key responsibilities helps both parties stay aligned and avoid confusion. This also helps ensure there is no overlap. 

• Required Skills & Tools: This segment in the JD is another vital part. This should be a combination of experience required, technical skills and software knowledge, as well as the soft skills that are important to be complied with in this role. 

• KPI and Success Metrics: In a role like a Payroll Accountant, it is important to lay out what success looks like and how it will be measured. It helps the candidates to work towards their goals from day 1.

• Compensation: No matter what anyone tells you, candidates want to know what they will be paid. At the end of the day, this stands out as a motivational factor. Include salaries and benefits to attract high-end candidates.

What Are the Common KPIs You Should Use to Attract and Assess High-Performing Candidates?

KPIs are not just numbers that you can set against a candidate. These are the factors that will drive your teams to work towards a common goal of growth and success. During performance evaluations, having KPIs also makes it easy to understand where the candidates stand and if they need support of any form.

Some of the common KPIs you can use to evaluate your team members include: 

• Payroll accuracy rate (% of payroll runs processed without errors)

• On-time payroll processing (consistency in meeting payroll deadlines)

• Compliance issue rate (frequency of legal or tax-related errors)

• Audit pass rate (success in internal/external payroll audits)

• Payroll cost per employee (efficiency metric)

When you include KPIs in your job descriptions, it makes it easier for the hiring team to know what the goals are that they want the candidates to achieve, and the candidates know if they are in sync with the organizational goals. It saves time, energy, and money. 

What Should You Choose – In-house or Outsourced Payroll Accountants? 

Different things work for different businesses. But over the last few decades, outsourced accounting has emerged as one of the top business strategies that has helped accounting firms reduce costs, focus more on CAS, provide better client service, and scale effectively.

Let us analyze the difference between availing in-house vs outsourced Payroll Accounting services. 

DOWNLOAD FREE PAYROLL ACCOUNTANT JOB DECRIPTION TEMPLATE PACK

A Payroll Accountant is a critical role that any accounting firm needs. Setting up job descriptions is only the first step. The struggle arises because of the shortage of skilled accountants in the market. 

This can be addressed with offshoring. Partnering with offshoring firms like Finsmart Accounting gives you the freedom of choosing the number of resources you need, their seniority levels, the kind of offshoring model you want to choose, and so on. In this partnership, you get access to pre-qualified, pre-vetted, English-speaking professionals, which relieves you of the time and effort needed in the hiring process. 

Get started with us: 

• Discovery – We capture all key firm details: client types, core services, internal structure, point of contact, and expected deliverables.

• Tech Setup – From accounting software to secure document management and communication tools, we align with your existing tech stack to avoid friction.

• Process Alignment – Our experts conduct a deep dive into your workflows to ensure everyone is aligned on expectations, tasks, and timelines.

• Workflow Launch – With our proven 14-step offshoring playbook, we set your team up for success with clarity, accountability, and minimal hand-holding.

Still have questions about offshoring? Book a free consultation with our offshoring expert today: https://finsmartaccounting.com/usa/free-consultation/ 

The post Payroll Accountant Job Description: What They Do & How to Hire [+ Free Template] appeared first on Finsmart Accounting - USA.

Accounting firms are very much aware of the scenario that is going to happen between the middle of January and the middle of April. For small accounting firms, especially, there is a dire need to plan in the best way possible. Knowing how to set goals the right way is extremely important for accounting industry leaders. The busy season is chaotic, and while many argue about the need for mandatory Saturdays, it all depends on accurate planning.

In this article, Finsmart Accounting – trusted globally for bookkeeping outsourcing services – will share insights with CPAs and accounting firms to manage workflow during tax season in a better way.

Why is goal setting important?

If you have only recently started an accounting firm, you might think that you can plan as you go. But that is the biggest mistake accounting firm owners make. Goal setting is important and here’s why:

To be on the same page: When accountants need to maintain accuracy despite the madness during the busy season, there is just one thing they fail to do – prioritize. That leads them to feel like they aren’t being able to meet deadlines, achieve their goals, and cope. Setting goals helps align the team members’ efforts with the overall objectives of the clients. During the busy season, when every task contributes to the larger financial picture, remaining aligned helps ensure that everyone is working towards the same goal.

To remain focused: Staying focused to attain the goal is one of the key elements to answering why is goal setting important. For accountants, who need to be mindful when completing tasks and ensuring there are no errors that can jeopardize the audits for the clients, it is essential to stay focused. Defining goals helps in prioritizing tasks, reducing distractions, and maintaining focus amidst a pool of activities during the busy season.

To maintain the motivation: Having clear goals gives the accountants a sense of purpose and direction. It motivates them to stay committed and strive towards achieving the targets. During the busy season, accountants lose motivation and always feel stressed. Setting goals helps tackle these daunting times better.

To inculcate a sense of accountability: Setting goals is important. It helps the leaders give ownership and accountability to the teammates, thus ensuring more involvement with the business. This helps accountants to feel that they belong. Team members also understand what is expected of them and it is easy to track the progress.
To ensure you are setting goals right during the busy season, here are some of the top things you should plan:

• Number of resources that need to be allocated, including any extra hands you might need to get through the busy season
• The number of projects and clients you are willing to take on
• The amount of growth your firm is ready for

When you have clear answers on how to set goals through the questions above, you can make a difference on how to survive the period better than others. Without a plan, you would find yourself and the team burdened with tasks, with no way to prioritize them, which in turn leads to a huge mess for the firm and the clients.

Recommended: Accountant hiring tips and ideas for CPAs and accounting firms

How to set accounting goals for team: A checklist

When aiming to tackle the busy season, it is essential to understand a very important question – how to set goals and achieve them. Here is a checklist that will help you ask the right questions to yourself and your teammates and set the right rhythm:

The number of hours they are expected to work: The busy season often ruins the regular rhythm of work. If you want to avoid sudden surprises of your team members backing out of working long hours, it is essential to specify the minimum number of hours you expect them to work during the busy season per week. Also, mention the overall goal in terms of the work hours during this season. Do not forget to share details of the incentives (if any) for the longer hours. Sharing these targets with your teammates well in advance helps ensure that they hit the goal and easier for you to have a conversation when they fail to achieve them.

If you plan to set a range of hours, you might want to think again. Some members might log off when they hit the minimum value. Not everyone wants to put in the elongated hours. However, when setting the hours be mindful that you do not set it just for the sake of it. Keeping in mind the mental and physical health of the employees, especially during this season is vital.

The number of days they are expected to work: Mandatory Saturdays have been a decade-long practice in the accounting industry. The times have changed and firm leaders need to analyze the need for this model. There might be some clashes with the employees as the younger generation of accountants tends to value their flexibility and balance between the personal and the professional. Understand your client’s needs and discuss with the team members on how many days are needed to meet the deadlines, especially during the season.

In case you expect them to work on the weekends – all of them, alternate, one of the days – let them know in advance. Also, let them know if they get some perks for working on the weekends. If their perception of what is expected and what you expect varies, it might be a good idea to have a detailed chat with them.

The process for preparing and reviewing the work: Even though for most firms the process of preparing and filing for taxation is the same, firms might have different ways of completing a certain task. If you have a process that has been followed in the firm for a while now, you might want your employees to use sticky notes or something similar to set up in their workspace. If it’s not documented already, it might be wise to set up a meeting and train them on what is expected of them in terms of the review process, much ahead of the tax season.

When you document the process once, it becomes your guiding force during a training session or as a reference if any team member needs help. This is also helpful in case you decide on taking some additional hands during the busy tax season and do not have much time to train them in detail.

The expected response time for internal and external communication: Being responsive is a key element in the accounting profession. It is paramount to set clear expectations with clients and internal teams about the turnaround times of any communication. While on a regular day, an accountant might be able to instantly reply to an email or a chat, during the busy season, they might be away for the longest time and the turnaround time increases. At the beginning of any association with the clients, it is essential to set a boundary and to prevent them from expecting the team to be at the beck and call of the client.

By setting response time expectations, you can allow your team to serve the client better and attend to their roles and responsibilities without too many interruptions.

Setting clear goals this accounting season

For an accounting firm leader, it is important to accept that despite setting goals, sometimes your employees will fail to attain them. So how do you set goals that do not fail? The only way to do that is to experiment, fail, and learn. While one process works for a certain firm, it might fail brutally for you. As a leader, you need to equip your team with the means needed to rise even if they fail. Investigate issues that have been in the pipeline for long and provide them with the support they need constantly.

If this busy season is becoming overwhelming for your team, get the expertise, and global tax talents, and serve your clients better by outsourcing. Write to us at connect@finsmartaccounting.com for more.

Don’t forget to check out:

India entry services

Accounts receivable and payable services

Outsourced financial controller services

The post How to Set Goals with Your Accounting Team This Busy Season? appeared first on Finsmart Accounting - USA.

Today, CFOs need to approach the challenge around accounting talent acquisition and retention in a different way:

– CFOs need to utilize their knowledge and influence to involve personally in recruiting and training the most talented resources

– As CFOs take on the responsibility of managing the global talent pool for their organizations, they need to grow as a leader or a strategic thinker as well. 

– They also need to make sure that employees who have been associated with the organizations for quite some time, develop enough technical skills.

In this article, Finsmart Accounting – globally trusted for outsourced bookkeeping solutions – will share everything to help CFOs hire and retain global accounting talent. Let’s start!

What can CFOs do to Hire and Retain a Strong Global Talent Pool?

1. Add the new-age touch to the work and workforce: Accounting and finance businesses have changed the way they operate. Changing business needs, service models, and employee demographics have led the firms to rethink the nature of work, workforce, and workplace.

Modern CFOs and businesses need to rethink the work that the organization does, especially the ones that involve humans. Understanding which of the tasks can be automated and what needs the human element is of utmost importance. While artificial intelligence should play a role in completing repetitive tasks, the strategic and value-addition needs humans.

When an organization rethinks work, rethinking the workforce also becomes inevitable. Understand the division of labor at all levels. Overseeing AI-generated errors needs human intervention and so do other strategic operations. While automation does free up a lot of time, relying solely on these tools can prove detrimental to the business. Upskilling the workforce is another key element in generating the results you are looking for.

Rethinking the workplace is yet another important need. Post-pandemic, people are looking for better flexibility in terms of work. Remote working has gained significant popularity. Video conferencing and new communication platforms need to be integrated seamlessly. As technology advances, it is important to bring changes in the concept of the workplace and let the evolution happen. 

Recommended reading: Cash flow management reporting tips and ideas for CPAs.

2. Enhance Employee Engagement: The boomer accountants have either retired or are on their way out. There is a need for the CFOs to evolve in their pursuit of dealing with the millennial and Gen-Z workforce. It is simple. They do not treat the workplace like a separate entity where they complete the designated work hours and leave. The lines between the personal and professional have been blurred. And they are inclined to make their workspace more personalized. They want to converse and coordinate with their colleagues, build bonds, feel motivated, and stay positive about their employers.

For the CFOs, it is important to take a step ahead in this direction. Planning employee engagement to make them feel valued and included is important. Engagement is also important in driving ownership towards individual tasks and ensuring productivity. Being employee-focused isn’t limited to just engagement activities. It is also essential to build policies that are inclusive of the changing lifestyles and prioritize the mental and physical well-being of the employees. The more employee-focused a firm is, the chances of an employee sticking around is better. 

3. Increase in diversity and inclusion: Before agreeing to sign an offer letter, an accounting professional no longer merely looks at the client portfolio. The needs of the employees in a workplace are based on their ethics and principles. In recent times, diversity and inclusion have been at the center of the workplace conversation. Bullying, sexism, racism, and bias are some of the things that the modern workforce steers away from. They are much more aware today and want their employers to be mindful in their practice.

CFOs need to understand that being diverse and inclusive gives a competitive advantage. Employers that have people from different backgrounds, socio-economic strata, and gender diversity are the places that the new-age workforce tends to incline towards. CFOs need to analyze if their workplaces are diverse and inclusive. If the answer is no, you might need to consider your workplace practices, learn to be respectful of differences, spread awareness, and grant everyone equal opportunities. 

4. Nurture the next-gen leaders: It is the responsibility of a good leader to build great leaders. While some say leaders are born, that might not be necessarily true. Leaders need motivation, grooming, and a mentor that can help them on their growth path. Today’s accounting professionals do not want to just be confined to tasks like bookkeeping, and taxation, and remain stagnant; they want opportunities to learn and grow. They want to take up strategic and advisory roles. For CFOs, it is important to look ahead, set an agenda, and help the employees in particular and the organization as a whole to navigate from the present to the future. It is also essential to develop programs that train leaders with different personalities. As we continue to grow as an industry, CFOs and business leaders need to think and act out of the box to lure a global talent pool. 

Recommended reading: Learn everything about auditing in accounting.

Where to Find the Right Accounting Talent?

1. Within the Organization 

More often than not, the resources that we look for are already within our organization. The problem is we agree to spend more on hiring new talent than to retain the ones we already have. As CFOs, you need to understand that there is a significant shift in the mindset of the workforce. Gone are the days when they would settle for anything. Employees want more – more opportunity, better flexibility, harmony, work-life balance, and pay that is as per market standards. It is important to prioritize, listen to, and understand the side of the employees. They stick by firms that have an employee-centric approach. The right methods and policies can go a long way in ensuring you do not lose out on the talent of global standards.

2. Through outsourcing

The accounting and finance industry has been facing an acute shortage of talent for a long time now. Hiring and retaining talent comes at a cost that small accounting firms might not be equipped to deal with. Outsourcing is a great way to not just access a global talent pool, but also give the firms access to expertise at a reasonable cost. By outsourcing your accounting tasks, you do not have to be worried about the seasonal surge of work. An outsourcing partner has a team of experts who can take up additional workloads and help firms work on multiple clients and projects at the same time. 

Recommended reading: Learn about the accounting outsourcing services pricing in India!

Hire Outsourced Bookkeepers in India

Today, CFOs are equipped to understand talent gaps across the teams and their decisions can go a long way in ensuring that accounting firms can secure high-quality global talent. Today, soft skills have become particularly important. While technical skills can be acquired, it is the soft skills that you should be looking for. CFOs need to build business models that encourage leadership internally. In the race to find the best talent, we often undermine what we have at our disposal. Having a clear vision and workflow is key to retaining talent. A CFO must be prepared at all levels to adapt and profit from the rapidly changing economic climate.

If you want to reap benefits and ensure stability in this volatile market, you might want to consider outsourcing. To outsource with the industry’s best, write to us at connect@finsmartaccounting.com.

Also, don’t forget to check out:

India entry consulting services

Accounts receivable outsourcing services

Outsourced financial controller services

The post Accounting Talent Hiring Tips and Ideas for CFOs Aiming for the Best appeared first on Finsmart Accounting - USA.

Tax filing FAQs 2024

Let’s first look at the common tax filing queries that we come across whenever the season starts:

Are tax year and tax season the same thing?

No, it is not the same thing. The tax year is the financial year when you earn, pay your income taxes, work on side gigs or freelance, and make charitable contributions. During the tax season, you file, report, and pay taxes owed from the last year. It is always the past tax year’s filings done in this year’s tax season. 

When is the 2024 tax filing season?

The Internal Revenue Service (IRS) has started accepting tax returns from January 29. They will continue to accept the tax returns until April 15. Taxpayers in Maine and Massachusetts will have deadlines until April 17 because of Patriot’s Day and Emancipation Day holidays.

Taxpayers can file for an extension of up to six additional months, October 15, 2024, to submit a complete return. If your clients still owe taxes, they must pay the estimated amount, along with the extension form. Taxpayers can file a late return without an extension. In case there are no taxes owed or the taxpayer expects a refund, there is no penalty. If there is an outstanding tax, they will have to pay a penalty.

Recommended: Learn about the cost of outsourcing accounting services in India!

When should taxpayers expect their refunds?

If the taxes are filed electronically, through direct deposit and there are no issues with the return, taxpayers can expect their refund within 21 days. Legally, the IRS has to wait until mid-February to issue refunds to taxpayers who claimed earned income tax credit or additional child tax credit. Such payments must be received by February 27 through direct deposit and no other issues. 

Can taxpayers see the status of the refund?

The status of the refund is available with the IRS in the “Where’s My Refund?” According to the IRS, the Where’s My Refund? tool provides details on a taxpayer’s refund. It will be more elaborate than just a typical message notifying that it is being processed. It will become easy for taxpayers and accounting firms to see if the IRS needs more information or other details. 

How are the tax brackets different in 2023 from 2024?

Due to inflation, the IRS has adjusted the tax brackets for both 2023 and 2024. While in 2023, the tax brackets were upward by about 7% to account for last year’s high inflation. The IRS adjusted its tax brackets upward for 2024, pushing limits by 5.4% higher this year. A crucial tax filing update for 2024!

What are tax credits and deductions?

Both tax credits and tax deductions are methods where you can help your clients save more on taxes. However, both of them work differently. Tax deductions help lower the amount of taxable income. Some deductions are only available if you itemize your deductions, while others are available when you take standard deductions. 

Tax credit is the dollar amount subtracted from your tax bill. There are two types of tax credits: refundable and non-refundable. If the credit is greater than the owed amount, the difference is paid as a refund. If it’s a non-refundable credit, the tax bill will become zero. Another important difference you must understand before tax filing in 2024.

What’s the purpose of online accounts in 2024?

Taxpayers and individual taxpayer identification number holders can use their online accounts to view, approve, and electronically sign the tax information authorizations from their tax professionals.

The online accounts can also be used to perform the following tasks:

– View schedules and the history of the payments

 – View or apply for payment plans

– Request for tax transcripts

– Find e-copies of IRS notices

– View data from the recently filed tax return. This will also include adjusted gross income

– Verify bank accounts and save multiple accounts. Eliminate the need to re-enter bank account information after every payment. 

We are done with tax filing FAQs for the year 2024. Let’s now look at some tips and ideas for filing your tax like a pro!

Tips to file taxes in 2024

– Gather all the information needed to file the client’s return

– Organize tax records including Social Security Numbers and Identity, individual taxpayer identification numbers, adoption identification numbers, and identity protection personal identification numbers. 

– Follow up on documents until you have everything handy

 – Tax preparers should be especially mindful of clients who are reporting unemployment compensation, pensions, or retirement plan distribution and annuities. 

– Accountants should also assist their employees in deciding if they should file electronically or through direct deposit.

Recommended: Here’s how outsourced bookkeeping pricing looks like in 2024 

Be aware of tax scams

As businesses get more sophisticated in their approach, the scammers become better at scamming. Thousands of people have lost millions of dollars and their identities to these scams. Scammers know who, when and how to lure their next target. They use emails, telephones, and text messages to target individuals, businesses, accounting, and tax professionals. 

As we continue to embrace digitalization, awareness becomes all the more important. IRS does not initiate contact with taxpayers by email, text messages, or social media channels. They would never directly request personal or financial information.

Learn more about identifying tax scams here. Know more about tax scams and phishing from the IRS.

Tax filing in 2024: It’s time to gear up!

With the right preparation and optimum guidance, you can help your accountants stress out less. While tax season evokes a lot of apprehension and complexity, it also presents an opportunity to feel empowered and take responsibility and accountability. Gain the knowledge you need, stay organized, and seek help wherever necessary.

For small accounting firms, running on limited resources, feeling overwhelmed is normal. For leaders, it is important to address this issue and seek help. Outsourcing is a great way to handle the seasonal workload without hiring additional resources. It also allows accounting firms to cater to more clients while paying less. 

Get help from the top tax experts today. Write to us at connect@finsmartaccounting.com. 

Also, don’t forget to check out the services we are most popular for:

Outsourced payroll services in India
Outsourced financial controller services

India entry consulting services

The post Tax Filing FAQs 2024: Almost Everything Covered appeared first on Finsmart Accounting - USA.

– 37% of them admitted to not having complete trust in their data.
– 50% of the senior accounting professionals mention that they do not completely trust the financial data they are working with.

This lack of confidence is largely due to the cash flow invisibility, which, in turn, challenges the business responsiveness. The market fluctuations and the out-of-date inaccurate information are what leads to this issue.

If you are a CFO who faces issues in global consolidation, you probably need to dig deeper. Understanding the causes will give you the means and enable you to avoid them. The questions you need to ask yourself are:

– Will you be able to assess risks and opportunities without accurate data across all entities?
– What if an investor is unable to get a clear picture of the company’s finances?
– How will you showcase compliance?

Financial consolidation is not just another function, it feeds into different actions that percolate into and define a company’s growth. It also lets investors understand the opportunities available and gives the leaders, management, and auditors an understanding of the company’s finances.

To achieve accuracy in data and become an expert in project management across all entities, an effective financial consolidation is needed. As businesses scale, the complexities scale too.

In this article, Finsmart Accounting – globally trusted for outsourced accounting solutions – will share everything about the consolidation of financial statements for CFOs.

Let us delve deeper into the common challenges that CFOs face in global consolidation and ways to tackle them:

1. Inaccurate data caused by manual entry:

The Problem:

Businesses continue to have a persistent problem of unreliable data. The field of accounting is vast and deals with an enormous amount of data, most of which, to date, continues to be processed manually. Consolidating multiple sources and judging their accuracy is a long-drawn process.

Once an error has been committed, it can take months for the CFOs to have it rectified. Data keeps getting added to the pile and so do the errors and inconsistencies. Making decisions using this data can prove detrimental to the business.

The Solution:

Introducing standard processes and solutions right from the input of data can help throughout the data journey. Effective data management practices will also help the CFOs in making decisions that make a difference.

With the volume of data that accounting firms deal with daily, it is only expected that a human error will occur. Choosing automation tools for consolidation is progress in the right direction. It helps save time, effort, errors, and money.

All data should be centralized, so the chances of a piece of information going amiss are low. To ensure consistent results, it is important to have a quality check in place. This helps the CFOs flag an inconsistency early on and make amends as soon as possible.

2. Unable to automate the consolidation process:

The Problem:

Although automation is the way to go, automating the lengthy financial statements consolidation process might not be as easy as it might seem. However, the failure to do so results in further loss of money and becomes an expensive neglect. Indeed a major challenge related to consolidation of financial statements.

The Solution:

Begin by understanding the gaps in your financial statement consolidation process. When you know what it is that your business needs, it becomes fairly easy to spot the automation tool you need.
Make an informed decision and invest in software that is equipped to handle financial consolidation and that can integrate seamlessly with the current systems and processes. Look for solutions that can easily streamline transactions with other companies. Make sure to avoid losing data and time in transferring.

3. Currency Fluctuations:

The Problem:

When we talk about global consolidation, it involves financial data from businesses and entities from different countries. The problem is that each of them has their currency. As exchange rates fluctuate, it can have a significant impact on the financial performance, and position of the consolidated entry and make the businesses susceptible to risks.

The Solution:

To mitigate risks related to currencies, the CFOs can implement hedging strategies that can protect against adverse exchange rate movements. The use of sophisticated financial modeling techniques and scenario analysis helps in the forecast of the suspected impact of currency fluctuations. Its impact on the consolidated financial statements helps businesses in proactive risk management.

Recommended reading: Collaborative approaches for MNCs entering the Indian market.

4. Changing Reporting Requirements

The Problem:

Guidelines for reporting and compliance regulations are constantly evolving. As companies continue to scale, it can get difficult to stay on top of it all. Maintaining compliance is an ongoing challenge for most businesses and it is equally important for global financial consolidation.

The Solution:

In such a situation, you need an ERP system to handle global accounting standards and compliance. For a CFO managing so many different tasks at different levels, it is extremely difficult to stay on top of compliance, along with other things.

It might be wise to appoint a junior member who can keep an eye on the regulatory standards. As you continue to scale, be mindful of the standards and update data as required.

5. Risk of fraud through data manipulation:

Firms deal with a lot of data daily and most often they use spreadsheets. It is one of the most alarming concerns when it comes to data security. On a spreadsheet, changing and manipulating data is a matter of just a few digits. It is essential to make security a priority, especially for firms and roles that deal with this kind of information. Data manipulation often leads to the risk of fraud. In short, a major consolidation of financial statements challenge.

The Solution:

To begin with, using spreadsheets for critical information is one of the worst moves that businesses can take. Invest in advanced security tools with features that can control functionality across all levels. Automate the data to be input to reduce the information that humans can manipulate.

Perform regular checks on manual data entry and statements to get rid of any inconsistencies. Clearly define data management policies and train the teams on data integrity. Sensitive data should not remain accessible to everyone, thus controlling the ability to manipulate.

Recommended: Learn about the cost of outsourcing accounting services in India!

6. Cultural and organizational challenges

The Problem:

While technical complexities and the implications of the global consolidation of finances are enormous, they also present cultural and organizational challenges for the CFOs. Managing teams with diverse backgrounds, time zones, and communication norms requires strong leadership and interpersonal skills.

The Solution:

Building a culture of empathy, inclusion, collaboration, and transparency is needed within the finance function. As businesses aim to overcome cultural barriers, promoting effective communication across geographies is important. Collaboration tools to foster the culture and virtual meetings to keep the essence of togetherness intact are the need of the hour.

Making Global Consolidation Easy for CFOs: Endnote

Times have changed and so have the needs of the businesses. CFOs are no longer treated as an alien entity within an organization. A lot of power is vested in this role and a CFO is trusted with many important decisions. Global consolidation of financial statements is a complex and nuanced process, of course. But some ways can push the CFOs to make the right decisions. Technological adaptations, implementation of robust processes, and fostering a culture of growth and collaboration are some of the aspects that can help.

Still struggling with the proper consolidation process? It might be a sign to outsource.

To know more, write to us at connect@finsmartaccounting.com

Also, don’t forget to check out:

Outsourced payroll services in India
India entry consulting services
Outsourced financial controller services
Outsourced bookkeeping solutions

The post CFOs, Is Global Consolidation of Financial Statements a Challenge for You? Read this! appeared first on Finsmart Accounting - USA.

Over the years, businesses and their CFOs have been more inclined to make data-driven decision-making. Along with the data revolution, the accounting industry has been witnessing changes in financial technology that have helped bring about innovations in software automation, and artificial intelligence.

In this article, Finsmart Accounting – globally trusted for accounts receivable and playable outsourcing services – will share everything about cash flow analysis and cash flow reporting. We will also be listing tools that will make the task of cash flow analysis easy. Let’s start!

Critical cash flow types

When it comes to understanding the current status and predicting the future of cash flow, it is no exception. For CFOs, it is necessary to identify risk and prepare for consequences based on the data. The process is often termed as cash flow analysis.

There are three types of cash flow that businesses should track and analyze:

– Cash flow from operating activities
– Cash flow from investing activities
– Cash flow from financing activities

Why should CFOs conduct a cash flow analysis?

The amount of money available for the business to conduct its operations and make payments – this is what a cash flow analysis helps understand. The calculation is current assets (cash or near-cash assets) minus current liabilities (liabilities in the upcoming accounting period).

For a CFO who handles the end-to-end finances of a business, cash flow analysis is essential to understand if the business can pay the bills and continue to generate cash for operations, pay its vendors and employees, etc. If the negative cash flow situation persists for a long time, it might be a sign that the business is moving towards bankruptcy.

Before we get into the details of cash flow analysis, let us understand what leads to inefficient cash flow management.

Reasons behind inefficient cash flow management

Inefficient cash flow management can herald a lot of problems. Here are the major reasons behind inefficient cash flow analysis and management:

1. Seasonal trends: Businesses evolve and change in every season. This is especially true for B2B businesses. For some firms, the summer months are slower; for others, it’s the holiday season. For CFOs, it is important to catch the trends in advance as this impacts cash flow. Just like an unexpected shortage of cash leads the firm to unimaginable troubles, so does over flow of cash. Businesses end up making unnecessary expenditures and not-so-important investments when there is a surplus. By the time the CFO catches on to the present, unforecasted data, they would already be posed with a new set of data.

2. Lack of necessary information: For a CFO, it is important to know what information is needed and how it should be used. Data-driven analysis is not just about having one piece of information. It is about having everything that is needed. Breaking down the available data into smaller pieces helps develop a cash strategy that fits the organization’s needs better.

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3. Rigid tools: For the longest time, finance professionals, including CFOs swore by Excel to solve their number woes. It is a great tool for maintaining data, but it is most certainly not the tool you could seek when building a long-term forecast plan. The tech of the spreadsheets is limiting, but there are so many options out there to get the support you need.

4. Limitations: Differences in time and time zones, availability of skilled resources, and access to software for quick completion of tasks are some of the top hindrances that CFOs face. This leads them to spend too much manual time on report creation. And if that is the case, the team most likely will not have much time for strategizing the firm’s moves.

Cash Flow Analysis Tips and Recommendations

Now that we understand the reasons for hindrances in cash flow management, let us understand the steps involved in cash flow analysis:

1. Target positivity in cash flow: As a CFO, your focus should be making operations grow sustainably with as little cost involved as possible. When operating income exceeds net income, it is an indicator.

2. Take risks for positive cash flow: Be mindful of the risks that the business might be taking when it comes to cash flow and its risks. Positive cash flow for investment purposes and negative cash flow in the operations do not signify the outcome you are looking for. Most often, in such cases, the business is selling off assets to meet the operating expenses. It’s probably time to change strategy.

3. Be critical of the negative cash flow: A negative cash flow could mean a lot of things and it is not necessarily bad. It is also equivalent to investments and expenditure in making products, building infrastructure, etc. That is why, it is important to conduct a thorough analysis of the cash flow. A positive cash flow in operation and a negative one in investments denotes growth.

4. Calculate the available cash flow: Free cash flow is what is available after payment of operational and capital expenditures. This remaining cash can be used for all ad-hoc expenses like buying stocks, acquiring another company, principal payments, and so on.

5. Operating cash flow margins: The operating cash flow margin ratio measures the cash from operating activities as a percentage of sales revenue. Having a positive margin showcases profit, efficiency, and quality in earnings.

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How can CFOs assess and enhance cash flow reporting

Real-time Transparency

– Use a centralized financial management platform for real-time visibility of cash position

– Use cloud-based software to track cash movements, and monitor liquidity levels and cash shortfalls

Cash flow forecasting and analysis

– Build a forecast model including historical data, current trends, and future projections to optimize liquidity

– Create a scenario analysis to assess the impact of economic scenarios, market fluctuation, and enabling risk mitigation strategies

Optimization of workflow capital

– Analyze metrics like Days Sales Outstanding, Days Payables Outstanding, and Inventory Turnover to optimize conversion cycles

– Streamline AR processes, negotiate to terms that favor the business, and optimize inventory levels

KPIs and Cash Flow Ratios

– Monitor Cash Conversion Cycle, Operating Cash Flow Ratio, and Free Cash Flow to Sales ratio since it greatly helps assess financial health.

– Establish KPIs that meet organizational objectives and drive constant improvement

Risk Management and Emergency Planning

– Identify cash flow risks such as credit defaults, supply chain issues, regulatory changes and market volatility

– Build contingency plans to address expected cash flow disruptions, to ensure the continuation of operations in difficult times

Compliance knowledge

– Stay aware of the changing regulatory requirements related to cash flow management, liquidity risk management

– Conduct audits and internal reviews to assess the effectiveness of internal processes, cash flow management, and reporting

Continuous Monitoring and Evaluation

– Establish a process of continuous monitoring and review of cash flow performance, and underlying drivers to identify opportunities for strategic adjustments

– Conduct regular reviews and benchmarking exercises against industry best practices to stay in the forefront of cash flow management

Accurate Reporting and Communication

– Develop dashboards and reports that allow you (CFO), the team, and the management to get a holistic view of the cash flow metrics and financial health of the business before making decisions

– Always maintain clear, transparent, and effective communication with the stakeholders including board members, investors, and auditors to maintain trust and keep everyone on the same page about the business’s financial health

Best Tools for Cash Flow Management

Cash flow management becomes easy when you have the right tools. Such software not only makes the task easy but also helps reduce dependency on others to get the job done. Here are the top cash flow management software that CFOs can use:

– Cube
– Anaplan
– Workday Adaptive Planning
– Centage
– Causal
– Jirav

Efficient cash flow management with Finsmart

An effective cash flow management system is critical for global CFOs. As they continue to navigate through the complexity of the financial world, this becomes imperative. However, as a CFO, it is important to remember that making correct financial decisions depends upon the insights that you bring to the table. Hence, making the right use of data to gain real-time visibility, forecasting, and risk management is extremely important.

Struggling with managing cash flow? Outsource your accounting tasks with Finsmart Accounting.

Write to us at connect@finsmartaccounting.com.

Also, don’t forget to check out:

Best outsourced accounting solutions
Outsourced payroll services in India
India entry consulting services
Outsourced financial controller services
Outsourced bookkeeping solutions

The post Smart Cash Flow Management Reporting Tips, Ideas, and Tools for CPAs appeared first on Finsmart Accounting - USA.

The worst thing about this industry is it is volatile and has a high failure rate. The payment processing time is relatively higher and there is an inconsistent cash flow.

Tracking each of the expenses, calculating the revenues, and making a note of the financial data is key to keeping the company in a positive cash flow state. Accounting in construction is different from that of other industries.

In construction, there is a need, not just to segregate the projects, but also further break them down. The funding and the costs are then allocated to each of these tasks. These costs mainly comprise the material and labor charges. Consulting and architectural fees are a part of the indirect costs under which payments are made. The projects that incur supervision, equipment rentals, support costs, and insurance are part of indirect costs.

In this article, Finsmart Accounting – globally trusted for best outsourced accounting solutions – will share everything about construction industry accounting. Let’s start by understanding how construction accounting is different!

Construction Industry Accounting is Different

The construction industry deals with varying needs from clients, contractors, and other stakeholders. The way this industry operates is largely different from an average manufacturing unit. Here are some of the top ways why construction accounting is different from the rest:

Project-based: In construction, the method of production varies widely based on the project being undertaken. Each production process involves a whole different set of materials, equipment of varying size and cos, and various resources at all levels.

Decentralized location: Unlike other manufacturing industries, every project in construction takes place in a new location. Each of these locations has different site conditions and unique challenges. To address these problems, there is a cost involved.

Inconsistent vendors: This is, indeed, one of the major challenges in the construction business. In the duration of completion of a project, there is a need to contact vendors and suppliers for different specialties and most often they are neither consistent with the delivery of the materials nor with payments.

Retainage in payments: Another critical challenge in the industry is that in most cases some portion of payments are often withheld until the completion of the project, even after he contractor’s work is over.

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Irregular cash flow: This can put several aspects of a project’s completion in jeopardy. Due to retainage, slow payments, and high upfront costs, it leads to irregular and delayed cash flow cycles. In the initial days, this can even be perceived as a loss.

Job Costing in the Construction Industry

Like any other business, a construction company also maintains a general ledger to keep track of the finances and accounts. While accounts payable and receivable, accrued payroll, and marketing are some of the top costs that would cover all aspects in other industries, it is not enough for construction companies and their projects.

Job costing is a tool that comes in handy here. Each segment of a project involves costs and revenues that are recorded by the budget. Job costing is a cycle of using the previous data to make better financial decisions. The cycle includes:

1. Recording all job-specific costs and codes that provide details of each expense.
2. After the completion of a project, the job ledger is stored for future use.
3. These job ledgers are analyzed by the management before the beginning of the next project to create better estimations and bids, based on the market.

Read on to discover more insights about construction industry accounting and best practices!

Methods of Accounting in the Construction business

There are 4 top accounting methods among construction companies. The approaches determine how they track income, expenses, and profit. It is important to analyze different aspects of the client’s business and pick a method that suits them.

Cash Method

What is it?

• The most straightforward means of tracking finances.
• A company recognizes as revenue when payments are received and as expenses when bills are paid.
• Cash received minus cash spent is the profit.

Advantages

• Having cash handy allows you to pay bills for the next year early. This means you can use the abundant cash to pay in advance. This way you can artificially reduce the profit and save on taxes.
• In the case of cash, you can ask customers to send end-of-year payments at the beginning of the next year, reducing the tax liability.

Disadvantages

• This method works only for small size businesses
• The statements cannot be trusted for proactive planning
• It might be too late by the time the company identifies a cash flow problem

Learn about the cost of outsourcing accounting services in India!

Accrual Method

What is it?

• This method identified revenues and expenses as soon as bills are sent and received
• Construction companies with retainage do not identify profits until the project is complete because of this method

Advantages

• This method can recognize income and expense before they occur, helping the financial managers prepare well in advance
• Management can foresee problems in advance and can make necessary adjustments

Disadvantages

• Businesses pay income tax on unrealized profit since the system records revenues before they have been received

Percentage of Completion

What is it?

• It is a type of accrual accounting but recognizes revenues, expenses, and profits based on how much work is completed
• This method is useful for large construction businesses and companies with long-term contracts
• Divide the costs to data by the estimated cost at completion to get the result
• Construction businesses with revenues over $25 million over the last three years use this method

Advantages

• This method helps financial managers get a clear view of the current financial status of each project
• Larger businesses also include general overhead costs of each project, which can provide a clear understanding of how profitable each job is

Disadvantages

• Using this method, businesses can underpay or overpay taxes, depending on the accuracy of cost estimation

Completed Contract Method:

What is it?

• This method does not allow recognition of income and expenses until a contract is complete
• This is used by construction companies when they have a high volume of short-term contracts
• The expenses and revenues are revealed as each contract comes to an end

Advantages

• This method helps eliminate the uncertainty associated with a project’s costs and revenues
• When the contract is completed and all costs are known, it allows an accurate picture of the company’s financial conditions

Disadvantages

• When all incomes come in together, it becomes difficult to manage the cash flow
• This is majorly the case for long-term contracts, which are generally more compatible with the percentage of completion method

Tips for Smart Construction Accounting Processes

Whether your firm is relatively novice when it comes to construction industry accounting or you have been struggling with it for a while, here are some tips that will help you manage your clients better.

Segregate business and personal expenses: No matter the size of the business, your clients must have a separate bank account for the business. All they need to do is visit a bank or a credit union to set up a business account that suits their firm.
To set up a business account, your client will need a Social Security number, Personal identification, copy of the business license, and organization documents filed with the state.

Job Costing: As we have already talked about how construction is a project-centric industry, as a construction accountant, you need to help your clients track, categorize, and report transactions for each job. Not only will this help the company stay prepared for the tax season, but help provide an accurate accounting for each job.

Record day-to-day transactions: Whether you use the traditional method of journaling or spreadsheet or you have upgraded to the accounting software, make sure to add a detailed record of the everyday transactions – date of transaction, amount, equipment and labor costs, and administrative costs. There are several invoice templates available that you can assist your clients with billing their clients.

Select a revenue recognition model: Understand your client’s construction business well and help them choose from the four revenue models – cash, accrual, percentage of completion, and completed contract. Consider factors like the size of the business, the model that works for the vendors, and contractors associated with the firm.

Track business expenses: Make sure to create as many categories as possible – by service, by individual jobs, etc. Using an expense tracker is important, especially for a construction business that indulges in so much petty cash daily.

Most common expenses of the construction industry will include Business registration and licensing, Bank fees, Tools and equipment, Travel expenses (including fuel), Electronics, Trade school tuition, Vehicle maintenance, Phone and internet expenses, Lodging, Software subscriptions, Membership fees (unions and associations), Mileage (tax write off), Insurance, Lease payments, Safety equipment, and uniforms, Employee payroll, Advertising, and marketing

Use accounting software made for the construction industry: As a construction industry accountant, it is important to make a foolproof process in accounting. And choosing software built to cater to this industry can help. Send invoices online, track expenses, monitor the status of the payment, generate financial reports and so much more. It also helps enhance accuracy, which helps your clients avoid unnecessary delays and errors.

Thriving as Construction Industry Accountant: Summary

While the role of an accountant in the construction industry is complex and multidimensional, completing the tasks does not have to be that hard. However, the accountant does need a deep understanding of industry-specific accounting principles, the intricate details of a project, and the nuances involved with the regulatory framework.

As the construction industry continues to evolve, it is important for the small accounting firms, engaging with the jobs of this industry, to keep themselves up-to-date.

Lack of the bandwidth to handle the complicated nature of the industry? Outsource with Finsmart Accounting. Write to us at connect@finsmartaccounting.com.

Also, don’t forget to check out:

Outsourced payroll services in India

India entry consulting services

Outsourced financial controller services

Outsourced bookkeeping solutions

The post Dominate Construction Industry Accounting with These Growth Insights appeared first on Finsmart Accounting - USA.

In this article, Finsmart Accounting – the leading accounting outsourcing services provider in India – will share everything about choosing the right accounting software and automation platform. Let’s start!

Choosing Accounting Software: Questions to Ask

Before you pick the right kind of software, here are some questions you need to ask yourself:

Is the accounting software cloud-based?

Besides allowing accountants to access data anytime, anywhere, cloud-based software offers low-maintenance costs, automated backup facilities, and a multi-layer authentication system to avoid data theft. They can also be easily integrated with other software.

Is the accounting software cost-effective?

For small accounting firms, there are, anyway, a lot of costs involved. The fact that most of such businesses are on a tight budget, makes it a compulsion to seek solutions that are pocket-friendly, yet meet all business needs.

What is the usability of the bookkeeping software?

To get an answer to this question, certain factors need to be considered, such as:

• The number of users who need access to the accounting automation software
• If the team needs mobile access to the software
• The capabilities and functions that the software should be able to perform

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Is the accounting software scalable?

Small accounting firms are constantly growing and hence, they need accounting automation software that can help them scale with ease. The accounting software you choose should be able to accommodate the changing business needs. 

How to choose an accounting automation platform for your firm?

Choosing the right kind of bookkeeping software depends solely on the capability you are looking for, which means you have to determine the functions you want them to perform. It will also depend upon the business complexity you are looking for them to solve. Here are a few things you might be looking for and the best software that can solve your needs:

Accounting functions

They make for the backbone of an accounting firm. If you are looking just for software that helps manage financial transactions, bookkeeping, and generating reports, you need software to perform these basic functions. Such software helps streamline and automate accounting processes, reducing manual labor and human errors. They also enable functions like expense tracking, invoicing and billing, bank reconciliation, financial reporting, and cloud access.

Some of the top software that help cater to these functions include:

Quickbooks Online: This software stands out as the top choice for small accounting firms. It has a user-friendly interface with features that offer comprehensive accounting solutions. With cloud-based access and collaboration features among the team members, it makes for an ideal choice for remote work.

Xero: Another accounting automation solution with cutting-edge features, Xero is known for its intuitive design and collaboration capabilities. It helps streamline work features like payroll, bank reconciliation, and inventory management. Xero allows the integration of software that lets the user customize the platform based on specific business needs.

Wave Accounting: It is a cost-effective solution for small accounting firms. It is known for its easy invoicing, expense tracking, and basic accounting functions. Its simplicity and affordability make it an amazing choice for small firms with basic accounting needs.

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Document Management

Accounting firms deal with a lot of data and documents that need careful storage, tracking, and management. One of the common challenges that small CPA firms face is access to documents across different levels. Having software that is equipped with document management helps reduce paper dependency, encourages better collaboration, and secures the storage of sensitive data. Automation tools that provide document management have features like version control, secure access control, collaboration, audit trails, and integration capabilities. Some of the top applications in this section include:

Hubdoc: It is designed to help ease document collection and management. It gets financial documents from different sources automatically and uses its smart data extraction capabilities to help relieve the team of manual data entry and reduce time spent. Hubdoc helps integrate accounting software platforms to create a streamlined workflow.

Receipt Bank: If you are looking for an application to simplify efficient receipt and expense management, this might be what you are looking for. Receipt Bank, also known as Dext, helps accountants capture, store, and categorize receipts easily. Receipt Bank also uses OCR to extract data and eliminate the need for manual input. This can be integrated with major accounting software, making the process seamless.

Doc.It Suite: It is a comprehensive solution for document management. Its unique features include document storage, workflow management, and securing client Portals. It has collaboration tools that enable communication between team members and clients, streamlining the document approval process and enabling compliance. 

Workflow Automation

It involves technology that helps automate and streamline repetitive tasks and processes within an accounting firm. Since smaller firms lack the resources needed to complete multiple jobs, workflow automation can come in handy to help enhance efficiency, reduce manual error, ensure a smooth flow of tasks, and keep clients satisfied. These accounting automation tools help in task management, customize workflow as per the needs of the clients, act as a tool for communication, and give the necessary reminders.  If workflow automation is something you need, here are the top applications that can help.

Karbon: This application is designed to help streamline workflow and communication within small CPA firms. It helps centralize task management, and client communication and enables project tracking – all in one place. It also allows the user to automate client reminders and customize workflows, enhancing overall efficiency.

Airtable: It is a versatile project management and collaboration tool that allows customization of several business processes. Small accounting firms can use this tool to create automated workflows for client onboarding, approval of documents, tracking of deadlines, and creating a flexible workflow solution.

Trello: It has a user-friendly interface that makes it a top choice for workflow management. Trello’s boards can be used by small accounting firms to help customize workflows like task assignment, project tracking, and client communication. Trello can be adapted easily to suit the specific needs of accounting professionals.

Choosing the right accounting automation platform: Summing up

Choosing the right accounting software for the business can be overwhelming. Given the amount of research and trial and error needed before making a final choice can be truly daunting. Before you do anything, it is important to assess what it is that you expect your automation tool to do! And when you have the answer to this question, making a choice becomes easy. You can use the above tips to find what is right for you.

If you want to make accounting easy overall, you might want to consider outsourcing with Finsmart Accounting. Have questions? Write to us at connect@finsmartaccounting.com. 

Also, don’t forget to check out:

Accounts receivable outsourcing services

Outsourced payroll service providers

India entry consulting services

Outsourced financial controller services

The post Selecting Accounting Automation Software for Your Firm: Recommendations Included appeared first on Finsmart Accounting - USA.

In the pursuit of finding a candidate who fits in culturally with the firms, the firms end up conducting several rounds of interviews – sometimes in two digits. Both the hiring managers and the candidates need to know their worth, be aware of exactly what they are looking for, and make a choice early on. It saves time, money, energy, and resources for both parties. Before accounting firms go on the search for hiring the “ideal” candidate, it is imperative to have a clear idea of the roles and responsibilities. 

In this article, Finsmart Accounting – trusted for best outsourced accounting services – will share everything about hiring a bookkeeping or accounting talent for your firm. Let’s start by learning about the skills you need to keep in mind while searching!

Hiring a bookkeeper and accountant: skills to look for

1. Attention to detail: Accountants/bookkeepers are responsible for dealing with money, where even the slightest error can prove financially fatal for the client. When looking for the right candidate, it is important to seek someone who is attentive and looks out for the minute details. After all, you do not want a bookkeeper who overlooks discrepancies in the bank statements.

2. Good with numbers: Needless to say an accountant must be good with numbers. Otherwise, their role doesn’t hold value. However, they do not need to be able to solve highly complex mathematical problems to get their jobs done. All they need to know is to use the numbers effectively. This is super important when you are trying to answer ‘how to hire a bookkeeper or accountant’

3. Analytical abilities: A bookkeeper can not be a person of number unless they can analyze data. It is a must-have skill for professionals dealing with a high volume of data and numbers. You want someone beneficial for your business and only a candidate with this quality can spot and analyze trends and help in forecasting.

4. Industry expertise: This is especially applicable if you are hiring a bookkeeper with some experience. Having a candidate who has expertise in the industry you deal in can go a long way in faster delivery of deadlines, less time in training, and ensuring client satisfaction.

5. Adaptability to technology: Just like any other field, the accounting industry is transforming and it is no secret that the use of accounting software, project management tools, etc, has become an integral part of the firms’ DNA. The candidate you are looking for must have used or should be willing to learn and use new technology as and when needed. 

Read on for more recommendations on how to hire a bookkeeper or accountant!

6. Communication skills: Although in the early days it might be fine, you should be looking for a bookkeeper who can handle issues with the clients or internally. For both of these, you need good communication skills. They should also have the ability to summarize and explain the hundreds of documents in an easy-to-understand language. Otherwise, you are at risk of producing graphs and tables that seem incomprehensible to your clients. 

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7. Trustworthiness: In an industry, where people entrust your firm with their finances, it is important to have bookkeepers who have a high sense of integrity. In an interview, this can be assessed based on how “believable” they sound and how they aim to live up to the expectations. This becomes especially important when your firm provides advisory services to clients.

8. Sense of purpose: This is one of the most critical behavioral traits you might be looking for in an individual. As a firm determined to help clients in the best possible manner, a candidate must have clarity of what drives them. The field of accounting demands that candidates stay focused during the long hours and peak seasons. Without a clear sense of purpose, they will likely feel overwhelmed or worse, quit. As an interviewer, it is important to understand their driving force. 

Questions to ask when hiring an accountant:

Most often interviews are tricky. It is important to ask the right questions that help assess a candidate in terms of technical skills, soft skills, and cultural fit. Here are some of the top questions that you can ask a candidate: 

– How well are you aware of the industry we cater to and our offerings?

– Can you share a case study where you have managed a business like ours?

– How do you stay updated with the recent tax laws and regulations?

– Do you have experience with automation tools? Can you share the details of the ones you have used?

– What accounting service do you specialize in?

– How do you plan to respond to any queries you receive from our end?

– How do you handle ethical dilemmas in accounting? Is there an example you can share?

– How do you maintain accuracy and attention to detail under tight deadlines?

– Have you faced a situation where you had to convey complex financial information to non-financial stakeholders? 

– How would you describe your preferred work environment and what type of organizational culture you thrive in?

– What values do you consider important in your workplace?

Above are some critical questions that will give you a keen insight into the minds of the candidates. Indeed helpful in answering the question, ‘How to hire an accountant and bookkeeper’ 

Cost factors in hiring an accountant/bookkeeper:

1. The paycheck of a bookkeeper: The cost of paying a bookkeeper will depend upon factors like the location from which they are expected to work, the experience required, the range of duties, etc. For this, the accounting firm needs to set out the specific goals they aim to achieve. Are they going to just manage the books or if they should have a strategic eye?

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2. Full-time costs of a bookkeeper: In case you are hiring a full-time bookkeeper, or the situation is where the hourly rate is expected to exceed a flat fee, the accounting firms need to have an open discussion. According to the recent salary estimates on Glassdoor, a bookkeeper’s salary ranges between $25000 to $49000. The final price will depend upon the factors that we mentioned above. If you want to provide full-time employment, you will also have to consider providing them with additional benefits.

3. Part-time costs of a bookkeeper: If you are hiring a bookkeeper for the first time, you might want to do so on an hourly basis. Accounting firms with smaller budgets can benefit greatly from this. The average hourly rate of a bookkeeper is approximately $22. The rate goes higher based on the experience and expertise of the professional. Besides looking for favorable hourly rates, you should also estimate the duration that it will take to complete the work. It will solely depend upon the pipeline of work you have lined up.

4. Software costs in bookkeeping: It is not just the candidate’s expense that you will have to consider, you also need to take into account the cost of the accounting software that the teammates need to use. The cost of the software will depend upon the features you choose. Here are some of the top software:
Quickbooks Online  

Xero 

Zoho Books
NetSuite
Sage 

Hiring a Great Bookkeeper for Your Accounting Firm

A hiring mistake can prove extremely fatal for small accounting firms. An accountant has access to critical information, which, if leaked, can lead to heavy losses in terms of business and reputation. When conducting interviews for an accountant or bookkeeper position, it is essential to eliminate the candidate even in case of the slightest doubts on ethical grounds. Check for experience, behavioral patterns, personality traits, and software expertise. Maintain clear communication and be careful of the quality they claim to provide. Conduct a thorough background check to ensure you do not miss critical information. 

Struggling to find and hire the right accountant or bookkeeper? Outsource your accounting tasks to Finsmart Accounting and ease your resource worries. Write to us at connect@finsmartaccounting.com to know more. 

Also read:

Best payroll software for small and mid-sized businesses

Accounting cyber security measures for 2024

Effective cash flow management strategies

Learn about India entry services from Finsmart

The post How to Interview & Hire a Great Bookkeeper and Accountant For Your Firm? appeared first on Finsmart Accounting - USA.

For accounting firms, compliance has always been at the core. Most modern firms have steered away from merely being accounting service providers to being advisors. However, most clients continue to seek their accounting partners’ help for technical knowledge. In reality, it is, indeed, the technical know-how of the firms that add the majority of the value. When your team can notify you about the changes in accounting, taxation, and auditing and help clients manage areas where they feel directionless, you are certain to gain their trust. 

As technology and automation continue to become a key part of the industry, trends undergo a constant change. Most accounting firms, hence, have been undergoing a cultural shift that favors the new tech. 

In this blog, Finsmart Accounting – trusted for best outsourced accounting services – will share expert tips to stay updated and relevant in the current accounting market. Let’s start!

How to stay updated and relevant in the current accounting market?

Stay updated with the changes: Be it the new regulations or the recent changes in the reporting standard, for an accounting firm, it is important to have awareness of the latest developments in the field. Here are some ways to do that:

– Read industry news in any form. Be it print or digital, subscribe to the top publications that give information on the latest trends.

– Attend industry events. Conferences and summits led by industry leaders are a great way to know everything that’s happening around.

– Connect with industry professionals. They are always abreast with the latest happenings that can boost your growth.

– Keep your tech relevant. Technology is constantly changing and the use of the latest software and hardware helps you gain an edge over your competitors.

Use tech to your advantage: Now is the time to start using apps and software to automate repetitive and strenuous tasks. It helps the team focus on strategic projects. Here’s how you can stay updated and relevant with technology:

– Explore the constantly emerging tools. It will help you understand what works best for you and your clients.

– Automate tasks that take a lot of time off your team’s schedule. This helps the team work on things that matter and helps avoid unnecessary burnout.

– Keep your technology organized. Your project management tools help the entire team keep track of their tasks, avoiding important deadline misses. 

Develop soft skills: Accounting is no longer about merely crunching numbers. Skills like good communication, collaboration, team spirit, empathy, and an inclusive culture have become increasingly important. Here’s how you can help your team develop the necessary skills that are extremely important in today’s accounting world:

– Organize training programs that help focus on these areas
– Conduct team events and extracurricular activities that foster teamwork and collaboration
– Make your team aware of the soft skills in everyday life
– Inculcate a sense of empathy among teammates
– Value employees’ physical and mental health and practice the art of listening

Connect with professional organizations: Connect with organizations like the Institute of Management Accountants (IMA), American Institute of CPAs (AICPA), and Financial Executives International (FEI). Getting associated with these organizations can help you network with other professionals, stay up to date on industry news, and access resources necessary for your firm’s development. Organizations relevant to your field usually organize events, and networking opportunities that ensure constant growth and evolution.

In today’s times, IMA is one of the most prestigious and relevant organizations. AICPA continues to be the world’s largest member association for CPAs. They comprise over 698,000 members, students, and engaged professionals across 188 countries and territories. FEI is another top organization for finance professionals with over 11,500 members. 

Latest Accounting Trends You Should Keep an Eye for

Increased data security: Today, accounting firms and their clients share more information digitally. It becomes essential to protect both parties from cyber threats and other data security problems. To make sure this is effectively in place, start by ensuring that the employees have enough knowledge of data security. Use cloud-based software to scale within your budget.

Firms should also set up systems for two-factor authentication to gain sensitive data because both accountants and clients share confidential information. Focusing on data security helps keep everyone safe. 

Accounting in the cloud: Accounting systems on the cloud have become the need of the hour as this allows access of information to relevant parties anytime. According to a report by Sage, 67% of accountants have agreed that cloud-based solutions make their work easier and better. Most accounting firms have made a conscious effort to shift to the cloud but smaller firms in particular, have encountered challenges like data security, complex integrations, system compatibility, etc.

A comprehensive guide on outsourcing payroll processing online!

It is time for businesses to make a mature approach to cloud migrations, learn from their previous experiences, seek help from professionals if needed, and make amends accordingly. The first step to migrate is to check with non-core operations and then gradually migrate to core functions. 

Offshore staffing: The problem of talent shortage in the accounting industry is no secret. Hence, accounting firms have to seek new techniques to get the talent they are looking for. How they look for candidates is one of the key aspects of the business. As technology improves and the world comes closer, offshore staffing has been gaining a lot of popularity in the industry.

This model is beneficial for the firms on several levels. It gives them the autonomy to choose a team of experts who are dedicated to their work without the hassle of training them. It also helps save costs and gives access to a global talent pool. With a high attrition rate in the market, offshoring helps teams scale without the constant pressure of hiring and rehiring. 

Use of data analytics: Modern accounting clients want to know how they can make more money and give better service to their clients. This leads to the accounting firms acting as advisors. All of this depends heavily on the analysis of the available data. Efficient data analytics is not only key to measuring the success of a business, it also helps save time and money. Analytics help avoid incorrect decision-making and make amends soon.

Predictive data analytics is also a method adopted by accounting firms to set prices and make better forecasts. Despite the hurdles like difficulty analyzing the data due to a lack of professionals and outdated infrastructures, businesses are making progress in the right direction. Businesses that have been able to implement data analytics successfully have enhanced decision-making capabilities, operational efficiency, and competitive edge. 

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Social media as a positive enabler: Accounting and social media seem estranged, don’t they? But in the field, networking has become key to the success of the firms. Post-pandemic, even traditional firms have been using social media to talk to potential clients. These platforms also act as a place to provide credibility to the business. With the increased involvement of social media, the accounting field is gradually catching up to the rest of the world.

Changing jobs of accountants: As accounting firms become more focused on data analytics, more accountants move towards advisory positions. The technology has been changing across the industry, which allows the firms to give clients better and more accurate information. Keeping up with the changing technology will become further crucial as businesses leverage it to support their clients and improve their services. 

Staying updated with the current accounting industry: Endnote

The world is changing rapidly and so is the accounting industry. Change is the only constant and that is the only way how accounting firms can continue to remain relevant. While advanced technology and automation are rapidly taking up the space around, the human touch remains irreplaceable. The sync between cutting-edge tools and skilled professionals is key in navigating through accounting complexities and ensuring financial compliance.

Have limited resources and are struggling to keep up with the changing accounting industry? You might need to outsource your accounting practice. Talk to our experts at connect@finsmartaccounting.com. 

Also read: 

Best payroll software for small and mid-sized businesses 

Accounting cyber security measures for 2024

Effective cash flow management strategies

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