You’ve built your business from the ground up. And if you’re like most founders, you’ve been doing everything on your own since the beginning.
That might be perfectly fine when you’re first getting your company off the ground. But as your business grows and finances become more complex, you might find it hard to keep up.
If you’re devoting hours to bookkeeping or catching yourself making mistakes, it might be time to start thinking about outsourced accounting services.
What Are Outsourced Accounting Services?
When you outsource your business’s accounting, you work with external accounting professionals instead of building an in-house accounting department. Accounting services can be tailored to your specific company, but they often include the following:
- Bookkeeping
- Payroll management
- Accounts payable and accounts receivable
- Creating balance sheets, cash flow statements, and other important financial reports
Some outsourced accounting services help small business owners create financial projections, set budgets, and work toward specific financial goals. Business owners looking for more comprehensive financial guidance might benefit from working with a fractional CFO.
Key Indicators That It’s Time to Consider Outsourced Accounting Services
If you’ve grown your company from the beginning, it might be difficult to determine exactly when you need outside help. These are a few signs that it might be time to contact an accounting service:
Bookkeeping Takes You More Than 5-8 Hours Per Week
It’s difficult to set a precise threshold for when bookkeeping becomes too much. But as a general rule, spending more than five to eight hours on bookkeeping each week means your time could be better spent elsewhere.
When you spend that long doing bookkeeping by yourself, your business’s loss of productivity is often equivalent to what you’d pay an outside accountant.
Even if bookkeeping takes you less than five hours per week, it might still be costing you in the long run. Ask yourself if your accounting tasks are taking you away from any of the following:
- Client relationships
- Developing a business strategy
- Other revenue-generating work
If the answer is “yes,” it’s time to hand off your company’s accounting to someone who can dedicate their time to it.
You’ve Lost Out on Growth Opportunities Because Your Books Aren’t in Order
Many business owners understand that DIY small business accounting can be costly in terms of productivity. However, in many cases, the opportunity cost is even greater.
For instance, anyone interested in investing in your company will probably ask to see at least three years’ worth of records. If you apply for a small business loan or a line of credit, you’ll need complete, clean, and detailed financials.
Some small business owners who feel overwhelmed by accounting will avoid these opportunities (even subconsciously) because they know there are unresolved issues with their books. Others may rush to clean up their financial records before a meeting.
Neither is a good place to be. When you have an experienced accountant managing your books, you’ll be able to access your financial records at any time.
You Have an In-House Accountant, but You’re Still Confused by Your Finances
Some small business owners hire a part-time accountant and believe that their financial worries have come to an end. However, as many founders can tell you, hiring one generalist to reconcile your books and do basic data entry can help, but it’s not enough to answer big questions or help you set a financial strategy.
If you already have someone doing your company’s books, ask yourself if you have real financial clarity. If the answer is no, you might benefit from additional outside guidance.
You’ve Made at Least One Decision Based on Inaccurate Numbers
Making a small bookkeeping error and correcting it later is one thing. But when errors compound over time, they become a feature of your company’s accounting. When you base decisions on these faulty numbers, it can create serious financial problems.
Outsourcing your accounting isn’t just about reclaiming your time. It’s about having real confidence in your numbers and the decisions you make.
Why Outsourcing Your Accounting Is Worth It
Many small business owners hesitate before outsourcing accounting. Some worry about cost. Others may feel embarrassed that their books are in disarray.
However, in many cases, outsourced accounting services ultimately pay for themselves. These are a few reasons why outsourcing is likely worth it:
You Can Avoid Potentially Expensive Mistakes
Accounting mistakes are often more expensive than mistakes made elsewhere. And when you have to dedicate time and energy to fixing those mistakes, your business loses even more.
When you team up with outside professionals to handle your company’s finances, you can avoid the stress and losses that often come with money errors.
You’ll Save Money Elsewhere
Hiring a full-time accountant or CFO comes with a whole array of costs:
- Recruitment
- Salary
- Benefits
- Payroll tax
And if you’re like most small business owners, you probably don’t need someone handling your finances full-time. When you work with outside accounting experts, you gain access to expert guidance for a fraction of the cost.
You’ll Be Free to Dedicate More Time to Growing Your Company
When you aren’t dedicating time and mental energy to bookkeeping, you’ll be better equipped to focus on growth. Whether you want to streamline operations, plan for scaling, or increase your product or service offerings, outsourcing accounting and bookkeeping can give you the freedom to do so.
You’ll Prime Your Company for Scalability
When scaling opportunities present themselves, you want to be ready. As your business grows, your accounting needs will naturally become more complex. Outsourcing accounting services means your finances won’t get left behind.
You don’t have to recruit, hire, and train new employees to manage your changing finances. Accounting services are flexible, and they can easily take on the additional work as your company grows.
You Gain a Financial Planning Partner
Many small business owners think that outsourcing accounting just means hiring someone to do the books. That’s an important part of the picture, but the financial professionals you work with can also help you create budgets, set goals, and forecast revenue.
When you’re caught up in the day-to-day challenges of managing your company, it can be difficult to switch gears and look toward the future. The right financial professionals can help you envision the future you want and work confidently toward it.
Choosing the Right Partner for Outsourced Accounting
Outsourcing your accounting needs can be a smart step for your business, but it only makes sense if you choose the right company to partner with. Here are a few tips to help you select the right accounting partner:
First, Define Your Needs
Before beginning your search, take a look at your finances and decide what you need help with. Do you just need someone to handle basic bookkeeping? Or are you looking for more comprehensive financial management?
Look for Accounting Partners Experienced With Your Industry
Different industries have different financial needs. When you choose an accounting partner who’s already experienced with your industry, they may be better equipped to help you navigate hurdles and prevent common problems before they start.
For instance, our team primarily works with contractors, architects, and real estate companies.
Check Reviews and Qualifications
It’s always a good idea to verify a potential accounting partner’s certifications or qualifications before you begin working with them. It’s also critical to find out what current and past clients think of them.
To do this, look for client reviews and testimonials. Remember to look beyond the partner’s website! If you want to get a more in-depth picture of what working with a given company is like, many will provide client references upon request.
How Devine Consulting LLC Can Help You Outsource Accounting
Since 2011, we’ve made accounting and bookkeeping our business so you can focus on your business. Devine Consulting LLC provides accounting, bookkeeping, and financial controller services to small and medium-sized companies.
Although we’re based in Houston, TX, we work with companies nationwide. If you’re ready to turn your company’s finances from a headache to a competitive advantage, contact us today to see how we may be able to help.