How does outsourcing work in accounting?
According to a recent survey conducted by Intuit (the makers of QuickBooks), 89% of small business owners say that they experience more success when they are working with a good accountant. But what does that look like and how do you find one? There are several paths you can take, and it is important to choose the right one. Of course you can hire a dedicated, full-time accountant, but this is an expensive option that often doesn’t yield the results businesses are looking for. A better and more affordable option is to hire an outsourced accountant.
More and more, businesses are turning to outsourced accounting firms that combine experienced accountants with the latest technology tools for a cost-effective solution to their accounting needs.
What is an outsourced accountant?
Essentially, an outsourced accountant is someone that works with you on a part-time basis to do your bookkeeping and accounting. This takes the place of the business owner doing the accounting themselves or hiring an employee to do it. Outsourcing accounting work is a great solution for companies that don’t have the budget or desire to hire an internal person.
How does outsourcing work in accounting?
One of the advantages of outsourcing is that you have flexibility to get the services you need without having to pay for those you don’t. Typically, an outsourced services provider will start with an assessment to determine what you need and how best to help you reach your goals. From there, they will provide a proposal that outlines the services they can provide and the related costs. Sometimes this involves the implementation of new systems or business applications that will make your life easier and provide better information. Other times, they will recommend changes in your accounting practices to improve internal controls or enhance efficiencies. Regardless, working with the right firm can make all the difference for your growing company.
Why do companies outsource accounting?
The benefits of outsourcing accounting services are myriad, but three of the main reasons companies turn to outsourced accounting firms are:
- they save money
- they get the expertise they need across a wide spectrum
- they free up time
- Save Money: Small and mid-sized businesses usually don’t have the luxury of big budgets. They need to spend their money wisely, which is why outsourcing often makes sense. Often a small business owner can hire an outsourced accounting firm to cover the bookkeeping and accounting needs of the company at a fraction of the cost of a full-time internal person.
- Expertise: One of the classic mistakes we see companies make is trying to hire one person to cover a wide spectrum of functions. Most companies, even small businesses, have a range of accounting needs from basic bookkeeping to financial forecasting. Those functions need to be performed by people with the right skill set and level of experience. A bookkeeper, for example, is probably not the best resource to prepare a cash flow forecast or detailed financial projection. Likewise, a controller or CFO is not a good choice to handle the processing of your day to day transactions. An outsourced accounting firm can provide part-time resources to fill all of those roles in a cost-effective model.
- Free up Time: Time is the enemy of all entrepreneurs. It’s the thing they value the most, and yet often use the worst. As a business grows, more time and focus are needed to properly handle the accounting functions. It’s estimated that small businesses spend approximately 120 working days per year on bookkeeping and other administrative tasks. By using outsourcing accounting services, you will not only get more time to run your business but you will also be able to focus your time in a way that leads to better results.
Is outsourcing accounting right for you?
It’s important to ask yourself what your goals are with your business. Take an honest and objective view of where your finances are right now and think about where you want to take your business in the future – what steps do you need to take to make that happen? Odds are, you have a million different tasks and responsibilities to focus on, and doing your own accounting and bookkeeping shouldn’t be one of your top priorities. Outsourcing your accounting may be one piece of the puzzle that will help you get where you want to go.
What’s the first step?
At Milestone, we believe you should be focusing your energy on running your business, not on keeping your books.
Explore our bookkeeping and accounting solutions and discover a flexible, customizable monthly service that starts at just $250 a month. Our customers have found that our outsourced accounting solutions have made a world of difference, but don’t just take our word for it! Mike Reynolds, the founder and CEO of Innovatemap says that “they have been with me since I first started Innovatemap, and have helped us build a solid foundation for growth. I get the information I need to make good decisions and the strategic insights to position my company for success.”
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