No matter what stage your business is in – startup, early growth, scaling up, or preparing for exit – accounting is critical to your success.
In fact, accounting can be a competitive advantage and an engine for growth. But for most companies, it’s far less than that.
And the gap is getting even wider with the emergence of new accounting software combined with cloud-based technology. When properly integrated, it is possible to create custom paperless, highly automated accounting solutions that free up your time, save you money, and provide valuable insights that can power your growth.
So the question becomes, do you want to invest the time and money to create that advanced cloud accounting solution yourself? Or do you find an outsourcing partner that is both tech-savvy and can provide the expertise you need at a cost that makes financial sense for your business?
This article will help you decide.
Accounting has always been high on the list of business functions to outsource.
The key benefits:
Pay only for the expertise you need.
- Pay only for the expertise you need.
Outsourcing accounting allows you access to bookkeeping and accounting expertise without the burden of full-time salaries. proper record management and reporting, and payroll requirements are now in the hands of experts whose job is to make sure that your day-to-day accounting tasks, including bookkeeping, data entry, tax preparation, data analytics, and financial reporting are done in accordance with GAAP standards and best practices.
- Simplify HR
With accounting off your plate, you no longer have to deal with recruiting and retaining accounting personnel. Hiring processes consume business time, are costly, and your new hires will require onboarding, training, to get fully up to speed. Recruiting, vetting, and hiring accounting talent is now the responsibility of your outsourcing partner.
- Reduce operating costs
Every business will have to do their own math to determine the total cost of their in-house accounting department. Be sure to consider the cost of recruiting, onboarding, training, benefits, turnover, supervision, and payroll taxes, to get a fair comparison. And don’t forget the hidden costs of office space, equipment, stationery, software, and other things required to run your accounting department. Most businesses find that an outsourced accounting solution makes
- Prepare for growth
Outsourcing accounting gives you freedom to scale up operations without the serious time lag of finding and bringing on new hires. When business growth expands your accounting workload, your outsourcing partner can scale up and give you the accounting bandwidth you need at a moment’s notice. And that works both ways, since you are charged based on the services you use, you can scale down or up according to your changing requirements. That’s especially helpful for businesses with fluctuating activity due to inherent seasonality.
- Save time and money on the technology curve
Keeping up with the rapid advance of accounting technology requires two things that most businesses don’t have a lot of extra…time and money.
Time, to do the analysis of what software is available and how it can help the business. Time, to vet the various solutions and decide. Time, to implement and debug the solution. Time, to train your accounting team on how to use the new solution. There’s also the challenge of change management, getting employees to buy-in and use the new system instead of finding workarounds.
And oh yes, these new software solutions require money. Technology can be an expensive investment when you want to get to the leading edge.
Make sure your outsourced accounting firm is up-to-date with the latest technologies. This saves time, minimizes human errors, gets you real-time reports, and helps catch potential issues and resolve them before escalating.
- Create a single source of truth for all of your accounting functions.
One of the biggest challenges for business owners is that there are so many disparate systems being used – one for bookkeeping, one for invoicing, one for bill paying, one for tracking employee time, and another for payroll expenses. When questions come up, someone has to dig for the answers…and that’s not the best use of anyone’s time. A well architected cloud accounting solution will give you a single source of truth for your financial data as well as greater transparency which reduces the risk of internal fraud.
- Enable better decision making.
Outsourced accounting gives you the information you need to make more informed business choices. Monthly reporting on Key Performance Indicators (KPIs) gives you a better understanding of your company’s financial performance, enables more accurate forecasting, and identifies areas for improvement.
- Enhanced security
Outsourced accounting firms that implement cloud-based solutions provide enhanced security and protect your financial data and Personally Identifiable Information from hackers, and other potential breaches, thefts or disasters such as fire and storm damage. Cloud service providers (think Amazon, Microsoft, Google) have the most advanced security systems in the world. They are responsible for the security of information for literally millions of customers. They do it better than you.
Accounting in the cloud is a game changer.
Sometimes technological advances occur in such compressed time frames that they render traditional methods obsolete as soon as they become possible. Look no further than Blockbuster and Netflix. Streaming technology (and some epically bad decisions) put Blockbuster out of business and made Netflix a global powerhouse.
Across all industries, the cloud and integrated software solutions are enabling incredible levels of process automation, with improved effectiveness and efficiency. It’s what many people refer to as “digital transformation.” And the ones who successfully adopt and adapt are going to pull farther ahead of those who sit on the sidelines.
If you’d like to know more about how outsourced accounting can turn your accounting into a competitive advantage and an engine for growth, schedule a brief discovery call with Nikole here.
Accounting complexity increases throughout the business life cycle.
If you’re a startup, accounting is likely a low priority, and nobody’s full-time job. It’s something you do at the end of each month or quarter when you have to tell their shareholders or backers what they’ve been doing with their money and the results they’ve achieved. It’s necessary but they really can’t justify a full-time position.
Early growth companies face increasing complexity. Typically this occurs as annual revenues approach $1 million. Accounting challenges go beyond basic bookkeeping and require a more sophisticated approach to accounting processes and cash management. Is it time to hire a full-time controller?
Companies that are scaling up have to hire people to do the added work, and with that comes a new set of payroll and benefit challenges, establishing cash reserves and operating lines of credit, and an expanded workload for payroll, accounts receivable and accounts payable. The strategic vision of a CFO is needed, but comes with a big price tag.
Businesses looking to exit need bulletproof financials and accounting records and they have to be accrual based. If the business hasn’t modernized their accounting systems, potential buyers may see that as a negative. Plus, eliminating the expense of a fully staffed accounting department can make a positive impact on the P&L statement.
