by CE Wynn

Created on: May 24, 2008   Last Updated: March 27, 2010

The small business owner needs to have a good understanding of all aspects of business, including the finances. Running a business is difficult, but keeping track of the financial compliance can be overwhelming for some owners. Even for small businesses the compliance required is often complex and time consuming, yet outsourcing can be expensive.

So what is the ideal option. It all depends of the specific business, the skills of the business owner, and how much can be spent. There are several accounting options for small business, all with there own advantages and disadvantages.

* Going it Alone

Keeping up with compliance, and managing the accounting function of any small business, no matter how small is not easy. To efficiently keep control of the finances of a business, it is necessary to not only be organised, but also have an understanding of basic accounting concepts and the compliance required to be lodge with the various government departments. All of this can take a considerable amount of time, and there is no guarantee it will be right without having a professional look over it.

The key advantage of going it alone is that as a business owner, you should have a good understanding of how your business is travelling financially. This is extremely important for small business owners, as poor financial records is often a significant reason why small business fail. In addition, although most owners may try to avoid the financial activities of its business, it is important to have an understanding of how to manage the finances of a business well.

* Bookkeepers and Accountants

If time is an issue, hiring a bookkeeper or accountant to manage the accounting aspect of the business, will enable you to have more time to work on other aspects of the business. Although similar in nature, there is a significant difference between hiring a bookkeeper verse an accountant.

A bookkeeper, should have a good understanding of basic financial concepts, and will no doubt be able to input and compete basic financial statements, and prepare some compliance related tasks. However, not all bookkeepers have professional qualifications, keeping this in mind, always try and get a recommendation from someone that has had a good experience with there bookkeeper.

An accountant on the other hand, has professional qualifications and generally a significant amount of experience dealing with business similar to your own. This additional knowledge can be a huge advantage and will further

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