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When You Should Outsource Accounting For Your Small Business
| StreetShares Blog

By StreetShares on July 26, 2018

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As a small business owner, do you find that controlling every aspect of your business single handedly is becoming a hard nut to crack? One crucial area for small businesses that often gets overlooked is accounting because, let’s face it, for many small business owners, accounting isn’t the most exciting topic. However, accounting doesn’t just have to be a necessary evil. Smart business owners know that when the time comes, outsourcing their finance and accounting needs can provide some major benefits. We’ll explore when and why you should consider it.

Focus On What You Do Best

When it comes to small businesses, the owner is generally the visionary. No one can grow your business better than you can. However, there are many accountants who can oversee your financial situation better than you. Therefore, doing your own accounting might actually be a waste of your valuable time or perhaps even a costly mistake.

Outsourcing your accounting activities allows you to focus your time on creating, selling, and growing the products and services that create value for your business. Allow your outsourced accounting team to focus on processing your payments and invoices, managing your vendor relationships, and even keeping a pulse on your financial trends and company statistics.

See also: Comparing Accounting Software Products for Your Small Business

Get Expert Advice

Small businesses often try to squeeze several accounting and finance functions into the role of one full-time employee. Although they all roll up into the umbrella of accounting, bookkeeping, payroll, tax preparation, and financial reporting are actually all very different functions. Worse yet, as an owner, you might even be tempted to just tack on your payroll or accounting responsibilities to your own to-do list.

Outsource your financial and accounting services, and gain some peace of mind knowing that you’ll have access to true experts to manage your accounting needs. Outsourced accounting experts make it their job to keep up with their field’s regulations, laws, best practices, and emerging technologies. When you let the experts handle your accounting needs, you can get back to what you do best, managing your growing business.

See also: Selecting an Accounting System for Government Contractors

Reduce Costs

Spend money to save money. Outsourcing your accounting services might actually just save you some cash in the long run. Why? You only pay for the work you need as opposed to hiring a full-time in-house employee.

Additionally, your wallet is going to take a hit when you try to find an in-house employee with the same skill and experience that you’ll find on a team of outsourced accounting professionals. For many small businesses that do not outsource accounting, their accounting department is usually only a one or two-person team. You’ll also save on the costs associated with office space, computer equipment, and even accounting software systems. The money you save can be reinvested to help grow your business.

Access To The Best Technology

Choosing the best invoicing and expense reporting software can be challenging. The good news is that an accounting firm is in a perfect position to suggest the best available and proven accounting technologies for your business. A good accounting firm will provide you with accounting solutions for your small business, not just services.

For example, if you want to access up-to-the-minute and secure financial records via your web browser, cloud-based accounting applications are what you need. Having live access to your data ensures quality bookkeeping without always reaching out to the accounting firm.

Likewise, web-based Business Intelligence (BI) systems can connect to a multitude of databases and systems to provide finance related data and insights across all of your company’s departments or systems. Real-time data reporting helps you and your team to understand performance on the fly. Additionally, an outsourced accounting firm can choose software that is scalable for your growing business whether you are adding new products, employees, or clients.

See also: Best Small Business Accounting & Finance Software for VOSBs without a CFO

Make Adjustments On The Fly

Although it’s often misunderstood, accounting is more than just bookkeeping and tax preparation. An outsourced accounting firm can also provide your small business with managerial accounting services. An accounting firm can analyze and report back to you on the operations and finances of your small business. Make more informed financial decisions on pricing, overhead costs, and profits with help from managerial accountants.

An experienced firm is also typically in the position to offer your business sound advice that can improve your cash flow by pointing out where to cut and where to improve costs. With positive cash flow, your business is likely to grow.

See also: Tips from a CFO: Get to Know Your Cash Flow and Receivables Turnover Ratio

Final Thoughts

If your growing small business would benefit from any of these accounting optimizations discussed above, outsourcing your accounting needs might be the correct solution for your company. Outsourced accounting is helping more and more small businesses to be financially prepared as they scale or transition into new markets.

Outsourcing your accounting truly does offer many benefits as a small business owner. However, to reap the maximum returns, it is essential that any business owner looking to outsource their accounting does their research. Be sure to look into the background of any potential service providers. Assess their areas of expertise, security practices, and reputation. You need to be comfortable with whomever you choose to work with and that’s only possible once you know exactly what they have to offer!

 

If your small business needs funding for accounting services (or anything else!), it’s time to look at what types of financing are available. We take a deeper dive into the topic in this ebook, “The Basics of Small Business Financing”. Learn more about how to apply for a small business loan, how to open a business line of credit, or how to acquire government contract financing. 

Learn the Basics of Financing

This communication is provided for informational purposes only. It is not intended to be an advertisement, a solicitation, or constitute professional advice, including legal, financial,  or tax advice, nor is StreetShares providing advice on any particular situation.

Topics: Veteran Small Business, Funding Your Business

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