Delegating your accounting, a good idea?

Managing your company’s accounting well is a daily, complex, and time-consuming task that is crucial for the survival of the business. While large companies have dedicated teams for this work, independent entrepreneurs might be tempted to delegate this task to an external specialist. myLIFE reviews this hypothesis and tells you (almost) everything about it.*

Before starting this article, let’s clarify that we are speaking here to individual entrepreneurs, independent artisans, or managers of small businesses. As you will understand, delegating accounting when you have more than 5 employees is no longer really an option but an obvious necessity. Let’s not even talk about large companies that have a dedicated internal team.

Finally, one last clarification, hiring an accountant is not a legal obligation for the independent entrepreneur. It is an option available to them and can be justified for all the reasons we will discuss now.

Accounting and more

The field of activities potentially falling under the term “Accounting” is broad, very broad. Without claiming to be exhaustive, we can mention billing processing, payroll payments, tax declarations, tax settlements, the preparation of a balance sheet, etc.

In addition to these tasks, there is an advisory dimension related to legal or tax themes. We will return to this.

It is a profession

At first glance, it is not yours! Thus, although it is always possible for an entrepreneur to manage this task alone, it often remains complex and requires a considerable investment of time. Time that you will not spend focusing on your true activity, your real profession, and the growth of your company.

Are you going to put your energies into excelling in your area of expertise or trying to vaguely get by in a field that is foreign to you?

Are you going to put your energies into excelling in your area of expertise or trying to vaguely get by in a field that is foreign to you? Before answering, consider what the costs of accounting errors related to your lack of knowledge, or your inattention after a hard day at work, could be.

Count on him!

For the entrepreneur who does not wish to take on these tasks himself, it is possible to turn to an accountant, a chartered accountant, or a structure also known as a fiduciary.

Let’s be clear, we are not talking about hiring an employee to perform this function within the company, but rather about calling on an independent specialist, or an external accounting firm.

There are many providers of this type in the Grand Duchy, some even claiming to specialize in the accounting management of freelancers. Click, call, ask your acquaintances, it’s up to you to take action.

He is also counting (a little) on you!

As experienced as your accountant may be, he will not be able to do anything without your good collaboration. Indeed, to be able to process your accounting documents and support you in the best possible way, your accountant must have easy access to all these documents and all the financial information related to your company.

If this seems obvious to you, consider that this “small” part of your work deserves your full attention. Indeed, to avoid mistakes and save time in your exchanges with your accountant, it is important to establish some simple procedures for the exchange of information. The more responsive you are to a request from your accountant, the quicker he will be able to process it.

Thus, when your collaboration begins, share a digital space, set up an archiving system, a nomenclature, and stick to it. For example, agree to send all your accounting documents to be processed at the end of each month rather than in a scattered manner.

Another example that is very important at the beginning: submit one of your invoices to your accountant. He will be able to confirm that it contains all the mandatory legal mentions on the one hand, but also that it is drafted in a way that optimizes its processing on the other hand. If this is not the case, adapting your invoicing template may prove necessary and beneficial.

If the organization and exchanges can sometimes take a while to set up at the beginning, your accountant will eventually come to know your business, your habits, your needs perfectly, and the logistics will only be smoother.

Let’s now study, beyond the classic elements, the range of services that your accountant can take on and in which he can be very useful to you.

It is invaluable to rely on an expert who is well-versed in the current legal framework and who can recommend the right approach to ensure your business complies with the requirements of the Legislator.

A local partner

Luxembourg imposes a specific legal framework, which is not that of France, England, China, or the USA. This legislation is itself in constant flux, and it can sometimes be difficult to keep track of all the changes or to understand what needs to be complied with. This is especially true for the many entrepreneurs coming from foreign jurisdictions.

In light of this reality, it is invaluable to rely on an expert who is well-versed in the current legal framework and who can recommend the right approach to ensure your business complies with the requirements of the Legislator. Failures in this regard could cost you dearly, much more than the fees of your accountant.

A tax partner

The legal considerations mentioned above naturally apply to the tax dimension inherent in Luxembourg. The involvement of a professional such as your accountant is therefore recommended, especially if your activity takes place in foreign jurisdictions and international tax specifics intersect in your accounting.

He is a competent interlocutor to help you, in strict compliance with the law, to optimize your tax situation and that of your company.

A strategic partner

Beyond the specific tasks mentioned above, your accountant, together with your bank adviser, can take on the role of strategic adviser. He is a partner who can help you make the right choices for your business.

If you wish to acquire a new professional vehicle, move into new offices, or renew your equipment… discuss it with him. Not only to know what your resources reasonably allow you to do or not, but also to refine your decision based on the advice he can provide.

As he knows your resources, needs, and habits, he can indicate whether leasing or a loan is more suitable for your new vehicle, for example, or if it is not yet time to buy premises rather than rent them.

An accountant can also help you communicate better with your banks and thus contribute to building a trusting relationship with them. Faced with increasingly complex regulations, banks require more and more financial information (cash flow, business plans, etc.). Some entrepreneurs struggle to provide these documents without the help of an expert by their side, which can be a source of frustration and misunderstanding in their relationship with their banks. Here again, an accountant is a valuable asset.

This price will be determined by the nature of the tasks you submit to them, just as much as the amount of accounting documents you entrust to them.

In the end

Obviously, the services of your accountant come at a price. This fee varies significantly depending on the door you decide to knock on. This price will also be determined by the nature of the tasks you submit to them, just as much as the amount of accounting documents you entrust to them. Based on this information, the accountant should be able to provide you with a fee package.

It is therefore impossible to tell you exactly what the amount will be. We invite you to get in touch with several professionals, communicate your needs so they can make an offer, and then compare to choose the most suitable one. Do not rush to choose the cheapest without ensuring in detail what each service included in the offer entails. Never assume that certain elements not explicitly mentioned in the budget proposal are included anyway. Ask questions, do your calculations, and remember that any fruitful long-term relationship involves commitment, transparency, and mutual trust.

As you have no doubt understood, we invite you to seriously consider the option of outsourcing your accounting to an external specialist. You could save valuable time and gain peace of mind when dealing with a subject that has high stakes and on which the sustainability of your business heavily depends.

* Content translated from French by the BIL GPT AI tool