Outsourcing accounting services was once a luxury that only large companies could afford. However, the modern business landscape has made this practice much more common. Today most businesses have at least some portions of their bookkeeping and accounting handled by an outside party.
Let’s look at why so many companies choose to outsource bookkeeping and accounting, and how outsourcing these functions can help your business grow.
More Cost Effective
One of the best reasons that many companies are outsourcing accounting instead of keeping it in house is to save money. Accounting services may not be cheap, but compared to the cost of keeping a full-time accounting staff, the cost is negligible. Full time accountants require floor space, payroll, benefits and equipment. An outsourced accountant has these extras built into their pricing, and, best of all, you only pay this cost when you need them.
By outsourcing bookkeeping, you gain access to a team of professionals whose sole focus is to save you money and keep your financial records straight. As a business owner, your impulse might be to keep your accounting under your own control, but the benefits of having an experienced accountant cannot be understated.
A good outside accounting company will have advanced knowledge of your industry’s tax structure and be able to offer financial advice that would otherwise be unavailable to you. This will enable you to make strategic decisions for your company.
Many businesses choose to outsource accounting after a sustained period of growth. Once a company reaches a million dollars in revenue the scope of managing bookkeeping in house may become unrealistic.
As companies grow, they become more susceptible to financial errors and, in the worst cases, fraud. Hiring outside accountants minimizes these risks. Professional accounting services stake their entire livelihood on eliminating these problems from companies, so you can rest easy knowing that your finances are in good hands.
Outside Investment Capital
Another reason that business send their accounting to an outside company is that they have received a large investment from an outside source. These types of investments come with all sorts of requirements from investors looking to make sure their money is well spent.
One of those requirements is the presence of an unbiased financial assessment from an outside source. If you are looking to spur the growth of your business with outside investment capital, you can get ahead of the game by outsourcing your accounting to a firm that both you and your investors can trust.
Focus on Business
You started your business to sell a product or a service. Outsourcing your accounting lets you and your key staff focus on the parts of your business that matter the most.
Being aware of the financial health of your business is a vital part of keeping it afloat. That does not mean that tracking it should dominate your time. Businesses that outsource their bookkeeping have a better opportunity to focus on their sales and marketing while feeling secure that their finances are well managed by skilled accountants.
Outside accounting services have access to the best bookkeeping services and technology available. By structuring their company around accounting, outside financial services have no reason not to keep their equipment and technology held to the highest standards.
If you are still managing your business through QuickBooks or Sage then you already know the frustrations that come along with technology with only a rudimentary knowledge of the software. Outside accounting firms not only have access to the most capable software available – they have the time and skills to learn how to get the best results from it. This expertise will impart direct benefits to your company.
Assert More Control
By sending bookkeeping to an outside source, you gain the opportunity to take a more proactive approach to the task. An accounting firm is there to provide a service for your company and will complete the books just as you request.
By hiring an outside firm, you gain the services and resources of a dedicated professional so that you can be sure that your books are being done to your exact specifications.
Make Life Easier At the end of the day, one of the most important reasons why you should outsource bookkeeping is to make your life easier. Running a business isn’t a cakewalk, and it isn’t supposed to be. But by outsourcing accounting and bookkeeping, you can reduce the stress of one of the vital components of your business.