Outsourcing your accounting and bookkeeping services has become increasingly popular among businesses of all sizes. It used to be that only big companies could afford to outsource their accounting and bookkeeping. However, small businesses can enjoy the same advantages too!
As your business grows, keeping up with accounting tasks while running your daily operations can become increasingly challenging. This is where outsourcing your accounting comes in and makes your life that much easier.
Business owners can access knowledgeable, trained staff by partnering with a remote, U.S.-based accounting firm. The team will help your business run more efficiently, grow faster, and make more money.
The Benefits Of Outsourced Accounting
While the primary benefit of outsourcing is savings in cost and time, it ultimately gives you peace of mind knowing that your books are taken care of. This will give you more time and headspace to focus on your core business functions.
Let’s explore the pros and cons to help you make an informed decision and determine whether outsourced accounting and outsourced bookkeeping are right for you.
Outsourcing is More Cost-effective
The most commonly discussed benefit when outsourcing your accounting is the cost savings. Engaging the services of an outsourced accounting firm offers a more economical and cost-efficient solution compared to hiring in-house accounting staff.
In today’s job market, finding qualified talent to fill open positions can be challenging. Searching for the right candidate can consume significant time, resources, and attention, leading to frustration and disappointment.
Even after conducting months of interviews, you may still struggle to find suitable candidates who meet your requirements. You may have to settle for underqualified applicants who demand high salaries.
Outsourcing your accounting tasks to a dedicated team of professionals can eliminate the hassle of finding and hiring the right people.
With an outsourced accounting team, you can rest assured that qualified experts will meet your accounting needs with the necessary skills and experience. This approach allows you to avoid the cost and ongoing overhead costs associated with recruitment and employee management.
Unlike hiring an employee, outsourcing does not incur overhead costs such as paid time off, health insurance, retirement, vacation, workers’ compensation, and sick days.
In addition to the cost savings, outsourcing your accounting can provide the added value of having a team of experts at your disposal. This can help reduce non-compliance risk and ensure reliable financials, which is particularly beneficial for small businesses.
You Get a Proactive Approach
As a business owner, your primary focus is driving growth and achieving your company’s vision, not managing financial operations. We are willing to bet you didn’t go into business to become a trained financial professional and spend countless hours overseeing the books. This can be a significant drain on your time and energy.
By partnering with an outsourced accounting team, you don’t just get more time back. You can take advantage of their expertise and proactivity. Their trained eyes can spot potential red flags ahead of time, notifying you of any issues related to things like cash flow.
Focus On Your Big Business Ideas
A common challenge for many smaller business owners is finding the time to work ON the business instead of always working IN it.
Unless you’re an accounting firm, accounting is not driving your revenue or area of expertise. You are, however, an expert in your specific industry.
Outsourcing your accounting frees up more time to work on tasks you excel at — the functions that will bring in more revenue and lead to business growth.
Reduce Potential Fraud
Due to fraud, businesses suffer significant losses in the United States, averaging around $150,000 annually. Unfortunately, small to medium-sized businesses are particularly vulnerable when a single person handles the accounting duties.
This situation creates an environment where manipulating the books or concealing fraudulent expenses can go unnoticed for extended periods, sometimes even years.
Recognizing the warning signs of fraud is crucial, as it often stems from an employee experiencing financial hardship. When faced with such pressures, employees may resort to fraudulent activities out of desperation. Mindlessly placing trust in an employee without implementing proper controls or accountability is a clear invitation for fraud to occur.
Outsourced accounting services provide an added layer of protection through multiple pairs of expert eyes overseeing everything. This heightened level of internal control significantly reduces the risk of fraudulent activities.
While it is impossible to eliminate fraud, having a dedicated team with specialized knowledge in accounting best practices increases the likelihood of detecting anomalies. In contrast, relying on a single overburdened individual with an overwhelming workload may inadvertently create opportunities for fraud to go unnoticed.
Keep Your Accounting Function “Always On”
When you rely on an in-house accountant, there’s always a risk associated with having a key person responsible for a specialized area of your business. If your in-house employee goes on vacation, takes sick leave, or faces an unexpected personal absence, it can disrupt the flow of your accounting processes.
Unorganized books, unpaid bills, and the piling up of financial tasks can quickly spiral out of control. In essence, your accounting function stops for a certain period.
You can eliminate these concerns by outsourcing your accounting to a dedicated team. You can enjoy the peace of mind of knowing your accounting functions are always active and well-managed. Your books are consistently organized, payroll is processed smoothly, and your financial obligations are settled efficiently and on time.
The risk of unexpected employee absences derailing your accounting operations, especially before critical deadlines, is no longer a worry. You can confidently rely on your outsourced accounting team to ensure the continuity and reliability of your financial processes.
Outsourced Accounting Pitfalls
Partnering with a U.S.-based accounting firm to manage your accounting and bookkeeping is attractive for many business owners. However, there are some common pitfalls to consider when deciding to outsource.
Beware Of Potential Hidden Costs
When engaging in a paid service, it’s important to be mindful of the possibility of scope creep. This phenomenon occurs when a single task unexpectedly expands into multiple jobs. This leads to unforeseen costs that were not initially anticipated or may have slipped from your mind.
To mitigate this risk, it is crucial to establish a clear understanding of the month-to-month relationship and set clear expectations right from the start. Doing so can minimize the chances of scope creep and ensure you stay within the agreed-upon scope of work and budget.
You Have Less Control
When you opt for an outsourced accounting team, you gain the advantage of their proactive approach. However, it’s important to acknowledge that you won’t have the convenience of walking down the hall to inquire about every financial event. Instead, you’ll have access to a dedicated account manager who can provide regular updates and monthly reports. This reliance on an outsourced relationship may require a certain level of trust.
As a business owner, entrusting the control of your books to an external team can sometimes feel uneasy. To address this, it is crucial to establish a comprehensive onboarding process. This process will define clear roles, ensure policies and procedures are in place, and set expectations for effective communication. By investing time in this initial phase, you can build a strong foundation of trust and ensure that your outsourced accounting team meets your needs and delivers reliable results.
Your Accountant is Not In The Office
The physical separation from being in the same office can sometimes impose limitations. However, a reputable outsourced accounting firm will have effective communication policies, ensuring their team remains accessible and easy to reach. Considering your priorities and weighing the options, instant responses versus the time it may take to obtain accurate answers is crucial.
To avoid ambiguity and challenges in managing the outsourced relationship, it is essential to establish a clear communication schedule and define the division of responsibilities with your service provider from the outset. Discussing these aspects and your goals for the outsourced team will help create a transparent and manageable partnership. Taking the time to do this is important.
Maximize Your Business’s Potential By Outsourcing Your Accounting
The purpose of your outsourced accounting team extends beyond mere maintenance of your financial records. Their role is to revolutionize and optimize your accounting function. This will drive profitability, enhance cash flow, and foster business growth. They enable you to unlock new opportunities and propel your business toward success.
Notion CFO and Advisors help you save time and money while gaining access to expertise, improved accuracy, and flexibility. This gives you peace of mind, allowing you to focus on growing your business. Maximize your business’s potential by outsourcing your accounting. Contact us today to learn more about our Outsourced Accounting Services for small businesses.
