Let’s outsource the accounting department. Now this sounds like a sweet plot for a fun Americans sit com show, but its actually a very effective way to handle your book, especially as a small business owner.
Most of the young entrepreneurs tend to make mistakes such as improper team management, lack of multi-domain experience, especially non-core activities, and poor market analysis.
Despite working for hours with devotion, entrepreneurs fail to recognize that one of the major causes of their business failure is poor cash flow management.
Taking external help to deal with all the accounting processes is the best option for entrepreneurs.
If you are part of the management team of a company, you know how important the financial accounting function of your business can be. You may know how difficult it is to find an efficient, trustworthy, and dependable employee.
No doubt some people have these characteristics but how do you find them and how many headaches does that create until you do find them? Once hired, how do you manage their regular workload if they are out of the office due to vacation, sickness, leave, or other issues?
If you’re in the startup phase, the accounting side of the business may only represent a small portion of your time.
But, with business expansion, the accounting function requires additional time and internal controls for the betterment of the business. You could hire a team of finance professionals or continue handling the work yourself.
Over the past 20 plus years, it has been noticed that there comes a tipping point when it may make sense for a company to outsource its accounting department rather than keeping it in-house.
This typically happens when business volume disturbs management away from its ability to focus its energy on maximizing sales and service.
When this occurs, management is not able to utilize its true power, and, additionally, the company is not getting precise and timely accounting data because management is at full capacity.
No longer is it a time where you need to conform to old school norms. Outsourcing delivers your company affordable, cost-effective, attractive, and valuable solutions to in-house functions. Outsourcing your financial accounting services will let you have peace of mind while you stay focused on your core business.
The outsourcing functions of your business are becoming a much more popular and viable option in todays marketplace. Companies can outsource all sorts of functions including human resources, sales, IT, and of course, accounting.
Generally, outsourcing can be defined as Strategic use of outside resources to perform activities that are traditionally handled by internal staff and resources.” Outsourcing is a strategy by which a business or firm contracts out major functions of their business, to a specialized and efficient service provider.
According to a 2016 survey by Deloitte, more than a third of companies are planning to take advantage of this by outsourcing more of their financial activities.
It is always your decision whether to outsource or hire staff, but there are some prominent signs which show the need to outsource. Let me help you with it!
departments like this are expensive for small businesses.
1) You can’t afford a team:
It may seem a little counterintuitive to hire help when youre trying to spend less. However, as odd as it may seem, it is almost always cheaper to outsource your non-core activities.
Save yourself from having to pay a full-time accountants salary and instead bring on a freelance accountant. Freelance accountants oftentimes cost lesser than full-time accountants, depending on the scope of work.
Salaries aside, youll also save a lot of money by not having to pay for things like health insurance, allowances, and other things. Logically, small-scale businesses cannot afford to hire an in-house team of accountants. Outsourcing is the best solution to save time and reduce costs.
These outsourcing firms manage your accounting tasks efficiently and that too at an affordable price. They have expertise in the whole market. In this way, you can easily increase the growth of your business and analyze your financial numbers in a better way.
“Outsourcing is ultimately paying for the time you need and nothing more.”
With changing technology, you dont need a team get a good cloud based accounting software like ProfitBooks and it will take care of all your accounting needs.
2) you’re spending an excessive amount of time on accounting details:
You may find you are spending more time working in the business rather than on the business. It’s tempting to save your business money by crunching the numbers yourself, but a trained professional will do the same work more accurately and efficiently, gaining greater insights as a result.
Meanwhile, this frees up your time for coming up with ways to market your brand or design your next product line.
When you outsource your accounting department, you are hiring somebody that has studied and practiced the art of accounting. Its easy to get burned out and it happens quicker than you think.
Outsourcing one of your roles is one of the most efficient ways to give yourself a much-needed breather. Now that you have more free time, you will be able to focus your energy on the expansion and development of your business.
Accounting is a time-consuming task and investing so much time in this non-core operation is not a good choice for the owner himself.
So it is a better idea to outsource your finance and accounting department to third parties who can efficiently manage your tasks and allow you to focus on your core activities to increase your profitability.
Entrepreneurs buring the midnight oil because they havent outsource the accounting department
3)Your company is growing rapidly:
Most people don’t become entrepreneurs because they like accounting. If people liked accounting they would simply be part of an accounting department, and not do the other heavy lifting of running a business.
According to a survey, more than a third of companies are planning to take advantage of this situation by outsourcing more of their financial activities.
Rather than merely report your financial situation, outsourced financial analysts dig deeper to determine why you’ve landed in your current spot. If things are down, they find ways to increase revenue and reduce costs, and if you’re financially stable, they help you develop a business strategy to stay that way.
During the rapid growth phase of your business, you should focus your maximum energy on running your business.
Thinking about the opportunity cost, running your business should be a top priority. Also, a small accounting mistake during this time can lead to a downfall in business.
Things are already rapidly changing and difficult to keep track of. The thing that needs to be under control is your businesss finances.
When you outsource, the company has a much bigger stake in your success. When you succeed, they succeed. It is much easier to fire a company than an employee. They know they need to do a great job and help you grow or you will most likely be moving on.
4) You expect results 24/7 and versatile experts:
What happens if your employee gets sick? Goes on vacation? Simply doesnt want to show up to work one day? There is no backup plan. The accounting department goes as they do.
When working with an outside company, you should have multiple people who know your account. You want them to can pick things up at any time. Having someone always available to answer questions or handle a task is a big deal.
A single person only has so many experiences they can draw from. A company on the other hand will have many clients they are currently working with to learn from. Think about this scenario.
An outsourced accounting department works with 30 different clients. They implement something for one of their clients that makes their business way more profitable.
They bring up that solution to all of their clients and try to replicate a similar result. To the business owner this is invaluable. If you have an in-house employee they are only going to know your business.
If that person decides to leave, you are starting from square one. Outsourcing this function and hiring a firm helps to eliminate some of this risk. Unless the company going out of business, there will always be someone there to handle your work.
Finally, Outsourcing will always help you improve your finances and overcome the challenges that are in the market. It is your final decision as you are the captain of this ship.
Happy business owners after outsourcing their accounting department
Conclusion
An accounting department is very valuable to a company, especially as it grows bigger. Outsourcing your accounting department is a good choice for a growing company. If outsourcing is a very difficult choice for a business owner getting an accounting software like ProfitBooks is the best thing. This software is created with business owners in mind not just their accounting department in mind.
Its easy to use and take care of the majority of your accounting needs. We also offer a lifetime free software, visit the website and sign in today.
FAQs
Why should I outsource my accounting department?
Benefits: Focus on core business activities, cost savings, access to specialized expertise, accuracy in financial reporting.
Is outsourcing my accounting functions secure?
Yes, reputable outsourcing firms prioritize data security and employ encryption techniques, secure servers, and strict access controls.
Can I maintain control and oversight of my financial information?
Yes, outsourcing firms provide regular reports and updates, and you can establish clear communication channels for involvement and decision-making.
How does outsourcing affect communication and collaboration with the accounting team?
Outsourcing enhances communication and collaboration through various channels like email, phone, video conferencing, and shared document platforms.
What types of businesses benefit most from outsourcing accounting functions?
Small and medium-sized enterprises (SMEs), startups, and businesses with complex accounting requirements can benefit from outsourcing.
Also read
What is Cloud Accounting, And How it Will Help Your Business
How To Select A Perfect Accounting Software- 8 Tips
Free accounting software for small businesses
Top 10 Free Accounting Software For Small Business
