If you have been in charge of running a small business for very long, you have already likely come to recognize that constant growth is absolutely important. Without the capacity to continue growing over time, your business will at best become depend on a few original clients and at worst begin to become financially insolvent.
Many businesses with only a few employees (less than 10 people working full time) have found that while they want to spend their time focusing on growth—doing things such as marketing, managing relationships, and networking with key individuals—it is very difficult to find the time that is necessary to do so. In order to free up a little more opportunity in each day, then they will likely need to outsource at least some of their ongoing tasks.
Though there are likely several different tasks that your business could stand to outsource, accounting is one that has become incredibly popular. Most business owners do not like the tediousness that is involved in accounting and even more are uncomfortable navigating these intricate processes on their own.
In this article, we will discuss the most important things for you to know about outsourced accounting firms and how doing so can help you focus on the things your business does best. By taking time away from activities that you do not specialize in and redirecting that time to your specific area of expertise, your business will be able to operate more efficiently and improve its overall bottom line.
What are the most important things for me to know about outsourced accounting?
The outsourced accounting industry has been rapidly increasing. Many businesses have begun to recognize that using a certified professional to help them with their accounting duties is a lucrative and rewarding decision.
Here are a few of the most important things for you to know about outsourced accounting:
- Most outsourced accounting firms can help you balance your books, prepare financial statements, prepare your tax returns, and help with various other tasks
- Many of these firms offer their services “a la carte”—if you only need someone to help you with your taxes, for example, you’ll have the option to do so
- The outsourced accounting firm that makes the most sense for your business will depend on your number of employees, the nature of your business (eCommerce versus brick and mortar), your financial objectives, and your specific needs
The best outsourced accounting firms are the ones that will gladly answer any of the questions that you may (rightfully) have along the way.
How can an outsourced accountant help me save time (and even money)?
The ways that an outsourced accountant can help you save time are clear—instead of needing to spend hours every quarter (or every year) updating your financial statements and preparing your tax returns, you will be able to have a trained individual manage these tasks for you. As a result, you will suddenly have an increased amount of flex time that can be directed to more productive activity.
When contemplating the use of an outsourced accountant, you should do so using an opportunity cost framework. In other words, recognize that every moment that you must spend (as a business owner) focusing on accounting activities is a moment that could have been spent on activities increasing your revenues.
If your business is capable of producing $150 in revenue per operating hour, and the cost of an accountant is $80 per hour, this means that every hour you spend accounting instead of engaging in revenue-producing activities, you are functionally losing $70 per hour. In this situation, outsourcing your accounting activities would clearly be a profitable decision.
But the amount that your business stands to gain from outsourced accounting may be even greater. There are many different tax deductibles, tax credits, and savings opportunities that only a professional accountant likely has the ability to recognize. As long as the decision to outsource can be financially justified, there are very few reasons a sound business would ever choose not to.
What should I actively be looking for when comparing outsourced accounting firms?
Even once you have made the important choice to outsource your accounting duties, you will still need to decide which firm makes the most sense for your business. There are many different options available for you to choose from, and it is important to search for someone who has experience working with businesses similar to your own.
- What is the current size of your business (revenue, number of employees, number of locations, etc.)?
- Does your business operate in the eCommerce or physical commercial space?
- What accounting tasks are you specifically looking for help with?
- What are your business’ long-term financial goals?
- How important is customer service?
- Would you prefer to have oversight during the accounting process or do you prefer to use a firm that can handle everything themselves?
By taking the time to conduct personal interviews, visit the websites of prospective accounting firms, and also do additional research, your business will be able to be significantly more confident in your final decision.
Conclusion
If you are a business owner, you are likely constantly looking for innovative ways to save time and money. By outsourcing your accounting duties to a professional firm, you will be able to improve your bottom line and also devote significantly more time to the other components of your business.