Can you outsource accounting?
“Outsourcing” can have a bit of a negative connotation these days with all the news articles about jobs going overseas, but in some cases it can be a positive and helpful way to grow your business; outsourcing does not have to mean “offshoring” work to foreign countries. Often small and medium businesses reach a point where they need to consider adding more employees to cover all the administrative functions or figure out other solutions to take the burden off of the current employees. Outsourcing accounting functions can be a simple, cost effective solution with a lot of benefits, but you should consider all the angles. Let’s take a look at why some businesses choose to outsource their accounting and if that is the right move for you.
Why do companies outsource accounting?
There are many benefits of outsourcing accounting services, including:
Many small businesses start off doing their own bookkeeping to save money, thinking that the do-it-yourself method will be cheaper and work just as well. Unfortunately, the hidden cost of time and effort isn’t always factored into that equation. Every hour that a business owner spends doing accounting is an hour that isn’t spent doing other essential tasks. Outsourcing accounting can free up a lot of time that can be reallocated for tasks that only the business owner can do (and that can lead to more revenue!) and allow you to focus on your business’ core mission.
Once businesses start to expand, the accounting and bookkeeping grows right along with it. Things often get more complicated and time consuming, potentially adding payroll as you hire new employees, or needing to forecast your sales in order to understand and plan for your cash flow in the upcoming months. Often multiple accounting software solutions are required, and getting them to talk to each other and communicate properly can be a huge headache and ultimately not get you the results you need. Growing businesses have growing needs, and accounting can become a huge task very quickly.
Reduce Costs/Access Multiple Services
When faced with the decision of whether to hire an inhouse accountant or to outsource the services, many businesses are turning to outsourcing as a solution. Hiring an outsourced accounting firm is often less expensive than taking on an employee with a salary and providing office space, equipment, etc to get them all set up. Additionally, the benefits of outsourcing bookkeeping can give small businesses access to services that they wouldn’t otherwise be able to utilize since these solutions specialize in accounting and bookkeeping and have vast resources available.
What companies outsource accounting?
It is very common for small to medium-sized businesses to outsource their accounting. While these companies don’t have the deep pockets of a larger organization, they have many of the same needs. This is why they turn to outsourcing as a solution. Small and mid-sized companies can cover a range of functions from bookkeeping on the low end of the spectrum to CFO services on the high end, all at a cost-effective price point. Another reason companies outsource accounting, even as a start-up, is that they recognize the importance of having solid financial systems and processes to support good decision making from the outset. Many nonprofits also use outsourced accounting in order to keep their books well organized in order to support grant reporting requirements.
Can you outsource accounting?
As we have seen, there are many compelling benefits of outsourcing accounting and payroll services. However, there can be some disadvantages of outsourcing accounting functions. One potential disadvantage is that you do give up some control. While most business owners enjoy getting out of the weeds, it can sometimes be a problem if you are one of those people that want to keep total control. There can also be hidden costs that sneak up on you, depending on what services you use. A reputable firm will work with you to avoid surprises and maintain expectations. Like any business relationship, communication is an essential ingredient to success. You can run into problems with your outsourced accounting firm if you don’t establish good communication channels and set proper expectations on deliverables. Most good outsourced accounting firms understand these potential pitfalls and will work hard to avoid surprises and missed expectations.
Why you should outsource your accounting
Simple – you’re not an accountant! Here at Milestone, we know what we’re doing and can help guide you with flexible, affordable accounting solutions. Our services help you focus on what you do best and give you back your time in order to focus on your core business instead of spending frustrating hours trying to keep the books. Our CEO, Tom Gabbert is a successful entrepreneur who is dedicated to helping other entrepreneurs realize their dreams and our team is ready to jump in and help your business thrive. You won’t get locked into a long term contract at Milestone, and your accounting can be as flexible and adaptive as your business needs it to be.
Click here to learn more about how Milestone can help you unleash your back office and reach your full potential today.
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