As a small business owner, you don’t have a lot of time to research all of your options for accounting services. Plus, there’s not a lot of information out there about monthly accounting. How are you supposed to find your right fit if you can’t compare all of your options?
CSI Accounting & Payroll has worked with small business accounting for over 50 years. We know a thing or two about our specialty - as well as different accounting options that may be a better fit for some businesses.
While each of our articles and videos briefly touch on differences between monthly accounting and annual accounting, no pieces explicitly outline the differences and how they might meet your needs - until now. Here, we discuss:
What is monthly accounting?
How is monthly accounting different than annual accounting?
Which is the best option for your business?
What is Monthly Accounting?
When you think of monthly accounting, you might think of bookkeeping. However, it’s a much more extensive service.
This approach allows you to have a clear understanding of your cash flow and helps you to catch and correct errors more quickly. The other focus is on your taxes. Monthly accounting also removes the need to work with an annual tax accountant - and the cost to file your taxes is included in your monthly fee.
With regular touch-ins from your monthly accountant, you can ensure your tax liability is minimized through tax planning. With the help of tax projections, you’ll also know what your tax season will look like.
What’s the Difference Between Monthly and Annual Accounting?
Monthly accounting is much different from annual accounting. Annual accounting is mostly just the process of preparing and filing taxes each tax season.
In general, annual accounting by itself is often a cheaper, limited service - but how do you know if this option is good enough for your business?
Is Monthly Accounting or Annual Accounting Better for Your Small Business?
Annual accounting (paired with bookkeeping) is a good option for small business owners who are just starting out. This time span can vary a bit depending on your industry. If you’re just starting out, either you need to grow more before you can afford a larger accounting investment, or you need to increase your financial activity before you truly get value out of a more insightful service.
Monthly accounting is an ideal solution for small or medium businesses that are able to invest in their accounting - and see the value in doing so. This option might cost more than annual accounting in some instances, but it’s a complete service with value to match or exceed the price.
If your business is ready for monthly accounting but you still choose to only use annual accounting, you can put your business at risk. If you’re having any issues, you won’t notice them as quickly - and they can snowball. Many business owners find monthly accounting to be worth it to stay on top of their finances and make better-informed decisions for their businesses.
Find Your Ideal Accounting Service with a Free Consultation from CSI
It can be difficult to find your ideal accounting service! Now that you know about your options, ultimately, the decision comes down to your specific business needs.
If you have a high volume of financial transactions and want a more complete service, monthly accounting may be a better option. If you have a smaller business with fewer transactions and don’t want to invest in a full service yet, annual accounting may work just fine.
To schedule a free consultation with CSI Accounting & Payroll, click the button below!
Not ready to talk? That’s okay! First, you can learn more about the different types of advice a monthly accountant can provide.
Brian began working at CSI in 1996, and he purchased the business in 2002. As Owner, his primary role is in the management and growth of the firm. Since 2002, the firm has more than quadrupled in size. In 2009, Brian started CSI’s payroll service to complement CSI’s accounting and tax services. Brian received his Bachelor’s degree from the University of North Dakota, with a double major in Accounting and Financial Management. He’s a member of both the National Society for Tax Professionals and the National Society for Accountants, and he serves on the board of directors for the Professional Association of Small Business Accountants, where he was once president. Brian also serves on the business advisory council for Opportunity Partners, an organization that helps people with disabilities find employment. He’s also contributed to several business books, including Six Steps to Small Business Success and The Lean Mean Business Machine. Fun Fact: To help put himself through college, he used student loans, delivered pizzas, and worked summers in a salmon processing plant in Alaska.