The Cost (or Cost Savings) of Hiring Outsourced Accounting Services
August 12, 2021 - Should you consider outsourced accounting services? Business owners make countless decisions every day, from the mundane to the momentous. Without complete, accurate, and timely financial information, you are potentially putting your company’s ability to grow and thrive at risk. Are your financials serving you well, or is your accounting holding you back?
Many business owners cannot confidently answer that question because they’re (understandably) focused on the big picture. What if you don’t know as much about your financials as you think you do? For example, do you know the top three financial issues facing your business right now?
Having a “pretty good” idea of where you stand financially can lead to mistaken assumptions, poor decisions, missed opportunities, and reduced profit. Outsourced accounting services can provide the help to put you on solid ground.
So, what makes you most uncomfortable about your finances?
For some business owners, it’s the accounting process itself:
- Is your accountant (or bookkeeper) working as efficiently as possible?
- Can they clearly explain your reports and statements? Why was revenue down $400,000 this month? Does your gross profit margin seem too low?
- Are you meeting tax and compliance requirements?
- Why does it take so long to get month-end financials?
- Why is cash flow so erratic? Do you have a cash flow statement that’s updated monthly?
- Are you closing your books properly at year-end to ensure taxes are done accurately, without mistakes that could trigger an IRS audit?
And then there’s staffing:
- How much time and money do you really want to spend on hiring, training, equipment, overhead, salary, benefits, and performance management just to maintain an internal accounting person?
- Should you invest in new accounting software? Which platform?
And determining the health of your business:
- Are you making financial decisions for your business based on how much money you have in the bank? Do you know what should actually be considered when evaluating your company’s wealth?
If these concerns feel uncomfortably familiar – and daunting – you’re not alone. Business finances are complex. It’s virtually impossible for a one- or two-person accounting department to stay up to date, let alone get everything done thoroughly, accurately, and efficiently.
Outsourced accounting services provide accurate information to
help solve financial issues
Outsourced accounting can be a time-saver, but the real value comes from the peace of mind that having expert resources can provide.
As with any decision, you must weigh the costs against the cost savings. There are fees associated with any type of outsourcing, based on the scope of services you will receive. But outsourcing could help you realize areas within your business where you could tighten the reins.
Greater efficiency and time management
Wasted time is toxic for organizations, especially those with limited staff. Outsourcing may help offset your accounting workload so you can evaluate your staffing needs or focus on other business priorities. This could help your firm be more competitive.
Replace the time and frustration you’re spending on hiring, personnel administration, and wondering about your finances with a ready-made team of experienced professionals. Gain expertise and resources to handle all your business accounting needs consistently, accurately, and reliably. With your accounting under control, you can make more agile, effective business decisions.
Advice and insight
An accounting partner gives you someone to bounce ideas off and help you evaluate the financial ramifications of potential business decisions. For example, at Redpath, our internal team meets weekly to discuss the technological challenges our clients are experiencing and to explore, as a group, the best solutions. So all our clients benefit from everyone’s input. A solo in-house person is on their own.
If it’s taking longer and longer to get your financial statements after month-end, is that because your business volume (and resulting accounting workload) has increased? Or, is it because you are not making effective use of technology to streamline operations?
Software is expensive, but it’s even more costly to remain mired in manual processes or loyal to outdated technology. An accounting partner can show you ways to save money and make better use of people’s time by changing to the latest software. Your partner should share first-hand experience with products. This will allow you to skip the confusing and time-consuming process of researching options and wading through demonstrations.
If your customer base grows, your business physically expands, or you see the benefits of outsourced accounting and want to take greater advantage of that relationship, your accounting partner can adjust seamlessly by adding more hours or assigning an additional person to your account.
The pandemic forced businesses to think differently – about the value of technology, remote collaboration, available cash flow, and more. And success in the new normal requires embracing and planning for all of the above.
Whether or not you decide to outsource accounting services, having a clear, accurate, and timely picture of your finances is vital to making informed decisions for your business. These decisions could improve cash flow, increase profits, enhance efficiency, or help you plan for the future.