How To Determine Whether Outsourcing Your Accounting Department Is The Right Thing For Your Business

Choosing to outsource your bookkeeping and operational accounting takes careful consideration. While multisite companies stand to gain economies of scale and cost savings through outsourcing, if you choose a company not suited to your needs or without the necessary experience and infrastructure, the pitfalls of poor execution can be devastating and expensive.

This series of articles is designed to help you gain the confidence and information necessary to determine whether or how outsourcing your accounting department could be successfully achieved. We begin with an overview to help you determine whether outsourcing your accounting department is right for you.

Why Should My Business Outsource Accounting Services?

There are many reasons you should consider outsourcing your accounting services including:

• You free up your internal resources to focus on the core of your business so that they can perform value-added tasks.
• You are better prepared to scale your business when your outsourced partner can add and reduce resources to meet the changing needs of your business and support you to achieve your goals more quickly.
• You can make data-driven decisions with real-time reporting available when you need it so you can track KPIs and remain on top of your business performance.
• Outsourcing can help you increase profitability by not only providing real-time reporting to make better decisions but also by helping you avoid costly mistakes. You can remain compliant, avoid repetitive, time-consuming work such as data entry, eliminate costly rework and less time reviewing the information for errors and discrepancies.
• Outsourced accounting keeps you proactive and informed, so you aren’t blindsided by cash flow issues, back taxes, penalties for late payments, lack of working capital.
• You have staffing coverage with focused resources fully accountable for their work, during vacation, illnesses, leave of absences, etc.
• You maintain consistency in work as you always have hands-on expertise even if you experience staff churn or the above issues of absenteeism.
• You get to leverage the experience and skills of trained professionals, as long as you find an outsourcing partner that understands your business and can help you improve efficiency and reduce cost.

When You Should Consider Outsourcing Accounting Services

Here are some of the indicators that outsourcing your accounting services might make sense:

Cost: If you are finding it expensive to constantly be scaling up your accounting department to meet the needs of the business, you might be surprised how much more cost-effective outsourcing can be compared to having people full-time on the payroll.

Wasting time: Wasting too much time on the books is a classic sign a small business owner needs help with their accounting.

Financial advice: It can be hard to know if you are making smart business decisions. Outsourced accounting provides you access to valuable insights from experts who can help you drive your business forward.

Cash flow issues: Understanding cash flow is key to your business success. With outsourced accounting services you’ll receive regular reports that keep you on top of cash flow. You’ll know when your money is coming in and where it’s being spent so you can make smart decisions and take a more proactive approach to improve operations.

Your only accounting is taxes: If your business accounting is driven by tax accounting, you are missing out on real-time insights and management that improve operations.

You don’t have access to real-time information: If you don’t have the key information up to date and at your fingertips, you run the risk of making uninformed and costly decisions.

Audit nightmares: If non-compliance is leading to audits, penalties and fines, outsourcing your accounting provide good bookkeeping so everything is organised and compliant.

You’re never home: As an entrepreneur, your business tends to become your life, which shouldn’t be the case. You didn’t go into business to be a bookkeeper, and it is important to have time with family and friends even if it’s just to take a break.

Business owners are faced with many challenges trying to manage their business, and there are likely more than listed above. The right outsourcing partner can help you navigate the challenges of running your business and allow you to focus on doing what you enjoy most.

Is Outsourcing Your Accounting Operations Right For Your Company?

If you find yourself asking if outsourcing your accounting is right for your business, you have the first hint that it’s the right time. Asking the following questions can help you break free from the current status quo:

Do you have access to the information you need to run your business?

If the answer is no, you’ll continue to fall further and further behind on creating the financial reporting system you need to make informed decisions. You need to gain control now, so you are capable of making data-driven decisions that lead to successful expansion and profitability.

Do you want to have more time to focus on your business passion and serving clients?

If the answer is yes, outsourcing your accounting is the quickest way to do so. Outsourced accounting frees up your time to focus on your core business, improve customer service, and free up your team to take on more value-added tasks and maybe take a break.

Do you have a trusted adviser to help navigate the challenges of running your business?

If the answer is no, you are missing out on the opportunity to reduce stress and optimize operations and productivity. Without an expert by your side, you might not realize your potential. Outsourced accounting provides access to financial expertise and guidance to help you make the best business decisions. You also check your gut instinct with someone else.

Are you resource-constrained, limiting access to professional advice?

If the answer is yes, it’s time to reach out for that professional advice and find the expertise you need. You’ll have access to resources that keep you on the path to profitability and operational excellence.

With the right accounting solution in place, you can improve the quality of the information you use to run your business by partnering with an outsourced expert.