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When you look for an accountant, you don’t just want someone who can help you reduce your tax liability and prevent trouble with the IRS. You also want someone who can help make your business better. A good business accountant doesn’t just crunch numbers, he or she offers financial advice that improves your overall position. If you’re trying to decide whether to outsource your accounting needs or continue doing it in-house, you might be wondering what value you’ll receive in exchange for what you’ll pay.

Here are ten questions you might have when you consider outsourcing:

1. What Are the Potential Risks of In-House Bookkeeping?

If you do your accounting in-house, hiring requires finding someone with the right experience and a proven track record. If you’ve been using employees who are self-taught, you might end up with processing that is sub-par. In-house bookkeeping requires internal controls to provide checks and balances and protect your business from fraud risk.

2. Why Would an Organization Outsource?

Outsourcing improves the quality of the accounting department. Outsourced accounting firms give you access to a team of professionals committed to the financial operations of your company.

Sometimes businesses decide to outsource because they experience rapid growth and their old bookkeeping practices no longer keep pace. Others make the change because they recognize outsourcing can improve results.

3. What Are the Benefits of Outsourcing?

CPA firms provide high-quality work and extensive expertise. All certified public accountants are required to attend continual professional development to stay up to date. They base that development on topics most relevant to your business.

4. How Does Growth or Expansion Affect Accounting?

Sudden, rapid growth often creates demands existing staff can’t meet. Expansion exposes businesses to new situations, challenges, and regulations.

5. What’s the Cost Difference?

When calculating the cost difference between in-house and outsourced accounting, start with itemizing all the expenses involved with in-house solutions. There isn’t just the bookkeeper or full-time accountant’s salary, there is also additional employee overhead including payroll taxes, benefits, and retirement plans.

CPA firms save money by conducting a thorough financial analysis to help your business operate efficiently. They work regularly with the IRS on behalf of clients, and offer audit support if ever needed.

6. What about Confidential Data?

In today’s digital age, information security is a valid concern. Work with a firm that conducts background checks, ensures confidentiality, and has security measures in place for electronic data.

7. How Long Does Outsourcing Take to Implement?

Your chosen CPA firm should take a few weeks to assess your company and create a proposal. After you accept their proposal, they’ll configure any equipment and start the conversion process. In most situations, secure documents can be transported by courier. Digital data can be transferred via internet, fax or email.

8. What if an Organization Is Too Small?

Outsourcing can always be conducted to scale. If you need less, outsourcing can still help you save money and protect your business from financial mistakes.

9. Will Business Owners Lose Control Through Outsourcing?

CPA firms often give owners more control, because they have up-to-date, accurate information to make decisions. Owners have the opportunity to review and must authorize all disbursements.

10. How Should Businesses Choose a CPA Firm?

Owners should interview firms they’re considering, comparing their fees, specialties, certifications, and availability. Choose a firm that has worked with businesses like yours and offers a high level of service.

Gilmore Jasion Mahler Audit Partner Bob Bobek contributed this article. Did you find this blog helpful?  You can receive more informational articles and tax strategy ideas direct to your inbox. Be sure to sign up for our free GJM tax newsletter Focus. You may also want to consider signing up for some of our free quarterly industry newsletters, including The Manufacturer (for those in manufacturing & distribution), On-Site (construction & real estate), Practice Management Advisor (physician practices and other healthcare entities) and The Expert (with a focus on business valuation and litigation support). Sign up here for any of GJM's free newsletters.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities. 

Gilmore Jasion Mahler Audit Partner Greg Taylor joined the firm in the fall of 2017. Greg came to GJM with over 25 years in public accounting, as well as CFO and private equity experience. He says he started talking with GJM about possibly coming on board, and it made him realize that he missed the client service role in public accounting.

If you're interested in receiving informational articles and tax strategy ideas direct to your inbox, be sure to sign up for our free GJM tax newsletter Focus. You may also want to consider signing up for some of our free quarterly industry newsletters, including The Manufacturer (for those in manufacturing & distribution), On-Site (construction & real estate industries), Practice Management Advisor (physician practices and other healthcare practices) and The Expert (with a focus on business valuation and litigation support). Sign up here for any of GJM's free newsletters.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

A major financial concern for many Gilmore Jasion Mahler (GJM) clients in the construction industry is finding good people to do the work. You'll often hear about the workforce shortage in manufacturing, but it is also having a profound impact on contractors. GJM Partner Bob Bobek, CPA lead's the firm's Construction Specialist Group, working with many clients in the industry. 

If you're interested in more articles and information impacting your construction business, be sure to sign up for Gilmore Jasion Mahler's free quarterly e-newsletter On-Site. You may also want to sign up for Focus, GJM's e-newsletter offering tax updates and strategy for businesses. Just click here for quick and easy sign up.

Bob Bobek is GJM's lead Audit Partner and has over 30 years of public accounting experience. As the lead of the Firm's construction team, Bob is very active with industry associations including the Association of General Contractors of Ohio (AGC), Ohio Contractors Association (OCA) and the Construction Financial Management Association of Northwest Ohio (CFMA).

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

GJM’s Mary Jo Pitzen and Marie Saner presented a tax planning session November 15^th at Gilmore Jasion Mahler’s Maumee office for members of the local chapter of the National Association of Women in Construction (NAWIC), an organization that provides members with opportunities for professional development. Topics tackled at the session included construction industry year-end planning, depreciation and tax credits and incentives.  They also reviewed President Elect Trump’s proposed tax reform plan. Mary Jo Pitzen and Marie Saner are members of GJM's Construction Specialist Team and have expertise in the industry, working with clients across the region. Mary Jo is also an active member of NAWIC.

Now’s the time to move forward with updating your employee retirement plan so that its in compliance with the latest IRS requirements.

Every six years the IRS mandates that retirement plans with pre-approved status update their plan document or restate… to incorporate any recent regulatory or legislative changes. In return, they receive a new “opinion letter” from the IRS.   

We’re in the middle of a two-year restatement period for pre-approved defined contribution plans, which includes 401(k)s. The restatement period started August 1, 2020 and will close July 31, 2022. Since it is the third cycle of defined contribution plan restatement since the Pension Protection Act (PPA) of 2006, it’s also known as Cycle 3 Restatement.   

What does it mean to do a plan restatement? In simple terms it is a complete rewrite of your retirement plan document. It will reflect those mandatory regulatory changes and include any voluntary changes you’ve made to your plan document since your last restatement.

Pre-approved document definition: A pre-approved plan document has fixed provisions and pre-selected choices that can be chosen by the plan sponsor. The pre-approved language has already been reviewed and approved by the IRS. Any employer adopting a pre-approved plan can be confident that the terms of the plan will satisfy IRS code requirements. An important terminology note: “prototype”/ “volume submitter” are terms you’re likely familiar with but are no longer recognized by the IRS. There are now two types of pre-approved plans: standardized and non-standardized. The chart below offers a helpful side-by-side comparison.

Why do you need a plan restatement? As laws and regulations change, so must your plan document to remain in compliance. It must reflect new rules because of acts of Congress and new requirements from the IRS and US Department of Labor.

The IRS released its “Cumulative List of Changes” document in 2017, including new regulations in place since the prior restatement period that ended in April of 2016. But the cumulative list of changes happened before some other major changes included in the SECURE Act and the CARES Act.

SECURE Act and CARES Act changes won’t be part of Cycle 3 (or Post-PPA) restatement, but instead be incorporated separately through good faith amendments. 

Why should you act now? The two-year plan restatement period is already half over. If you don’t do a plan restatement by the July 31, 2022 deadline, you’re subject to IRS penalties and can also jeopardize the plan’s tax status.

Some other important considerations:

• Any plans terminated and cashed out prior to the restatement period will only need to address the changes brought on by the SECURE Act and the CARES Act. They won’t need to do a full restatement.
• Plans you’re considering terminating, are inactive or frozen do need to go through the restatement process.

Our Specialization.

GJM Accounting Services Manager Molly Wolf specializes in employee benefit plans and assists many GJM clients with plan restatement. In many cases she works very closely with those responsible for managing their company retirement plan document. Other times the client prefers to be more hands off with the project. Each business must determine their level of comfort and what works best for them.

“There’s quite a bit involved in terms of evaluating a plan document, ensuring compliance, and avoiding any penalties,” says Wolf. “Quite often the retirement plan manager will step aside and let our team take the lead. That way they can rest assured they’ll stay in compliance.” 

If you have yet to begin your plan restatement, Wolf says you probably don’t want to wait much longer. She says now’s the time to reach out to your service provider to be sure Cycle 3 (Post-PPA) restatement isn’t an afterthought, but a priority. GJM clients in need of a plan document restatement who haven’t begun this work already, are encouraged to reach out to their GJM team to discuss what’s needed.

Molly Wolf is an accounting services manager with over 15 years of experience specializing in employee benefit plans. The first 9 years of her career were spent as a dedicated employee benefit plan auditor. Her expertise also includes consulting for third party plan administration and benefit plan design, compliance testing, payroll integration and reconciliation. Since joining Gilmore Jasion Mahler in September of 2019, Molly continues to provide third party administration services, prepares related tax forms, consults on plan design, and prepares plan documents. She is a graduate of Bowling Green State University with a Bachelor of Science in business administration with accounting specialization

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.