Most small business owners and entrepreneurs juggle every aspect of business management, from administrative tasks to bookkeeping duties. At some point, however, many owners reach a point where managing every task becomes overwhelming, an ineffective use of time and resources.
Small business owners often turn to outsourced accounting services for expert financial guidance and management. Are you wondering if an outsourced solution to financial management is right for your company? In the content below, we explore the benefits of outsourced accounting and discuss the signs that it is time for your business to look into a comprehensive financial solution.
Understand the Benefits of Outsourced Accounting
Small businesses often face stringent financial pressures. On one hand, effective management of business finances is critical for reporting, analysis, continued optimization, tax preparation, and success, and you may lack the time or expertise to effectively manage company finances.
On the other hand, outsourcing accounting services may feel like yet another expense. However, most business owners eventually find that juggling all company aspects is overwhelming – perhaps impossible. While few will be able to grow your business better than you, the visionary, an accounting expert may be able to handle business finances better than you can.
For many small business owners and entrepreneurs, managing accounting tasks may be a needless waste of time and resources. In this case, outsourcing accounting services to a professional team is the most cost-effective option.
- Outsourcing eliminates the expenses that accompany hiring an employee, including benefits, paid time off, insurance, payroll taxes, etc.
- Outsourcing removes the time and expenses inevitably associated with recruiting and training additional staff.
- An outsourced solution allows you to only pay for the expert help you need, as you need it.
- Money saved utilizing an outsourced accounting team can be reinvested in business growth and development.
In business, time is valuable – especially as it is finite. Small business owners and entrepreneurs understand this well. When financial management tasks are handed to an expert, you are afforded time to emphasize administrative projects.
If you find yourself spending more time worrying about the accuracy of your company’s financial reports than investing in client relationship management, product optimization, or process efficiency, it may be time to hand accounting to an expert and dedicate your resources to the other facets of managing a business.
Access to the Latest Technology
Outsourcing accounting often guarantees access to top-notch accounting technology. Desiring to remain competitive in their industry, outsourced accounting firms typically maintain access to the latest invoicing and expense reporting software. As a small business, easy access to an updated, cloud-based dashboard of customer payments, deposits, payroll updates, invoicing, and financial forecasts is invaluable.
Additionally, access to daily financial reports allows you to make informed business decisions whenever needed, always optimizing, and staying ahead of the competition.
Access to the Experts
When your accounting tasks are outsourced to a firm, you can be confident that experts are monitoring your finances. Do your financial reports meet regulatory and compliance standards? Are your accounting tasks getting completed on time and with accuracy? Do you know the differences between bookkeeping, financial reporting, and tax preparation tasks?
An outsourced accounting firm will understand and properly manage these complex yet important financial distinctions.
When Should You Consider Outsourcing Accounting Services?
How can you determine when and where to start accessing outsourced accounting services? Considering one or more “triggers” can be helpful in assessing your need for help. As a small business owner, if your company has reached one of these triggers, it may be time to find a new accounting solution.
Small Business Triggers:
- Earning at least $1 million in business revenues
- Requiring sophisticated financial reports, especially for data-based decisions
- Accepting outside investor capital
- Employing at least eight people
- Entering accelerated growth stage of the business lifecycle
- As business owner, if you are feeling overwhelmed with the prospect of being continually involved in every area of the company
Similarly, nonprofit organizations experience triggers that indicate the need for an advanced accounting solutions.
- Various programs are competing for limited funds and require ROI justification
- Earning at least $500,000 in revenue
- Grants require foundation reporting
- A Board of Directors requires more sophisticated financial reports to demonstrate ROI and confidence
Beyond a variety of triggers, certain situations and processes – often during the planning stages of the business lifecycle – necessitate the help of a financial professional. A few significant examples are listed below:
- Establishing Your Business
If you are still in the planning stages of business development, now is an excellent time to outsource financial expertise. Establishing a company is no small feat, a process involving dozens of important decisions, including what entity structure is best and how to properly set up business licenses.
If you formed your business without expert guidance, it is not too late to complete an audit. Doing so ensures that every detail is optimized for your long-term corporate vision while also complying with legal standards.
- Writing a Business Plan
Writing a comprehensive business plan requires access to financial projections, often provided by top-notch outsourced accounting specialists. Accurate financial projections allow you to write a realistic, professional business plan – essential for continued business growth and financing.
- Comprehending Compliance and Taxes
Before launching a business, it is important to understand compliance-related tasks you may be administrating, including (but not limited to) sales tax, issuing 1099s, or managing payroll. If you do not have a solid understanding of these issues – or other reporting matters that are compliance-related – looking into outsourced help is critical.
SCORE: A Valuable Resource for Up-and-Coming Business Owners
Juggling every component of business management is challenging, especially for new business owners determined to succeed. Guidance is critical, and SCORE is an invaluable mentorship resource partner of the U.S. Small Business Administration (SBA). Having helped over 11 million entrepreneurs through free business mentoring and educational programs, SCORE has become a premier resource for up-and-coming business owners.
MyRQB: Outsourcing Accounting Services for Small Businesses
Our cloud bookkeeping technology is state-of-the-art, providing business owners with real-time insight into critical financial data. Additionally, we dedicate a complete team to your company, allowing us to have top-level staff working together on your account.
To learn more about our services, contact our team at 866.567.4258 or via our online contact form! We look forward to beginning a conversation.