Entrepreneurs spend most of their time on business-related activities. Acquiring new customers, attending to the queries raised by your existing clients, and developing new products and services can take up your whole day. Accounting work is usually considered to be a low-priority task.
This arrangement could work well for some time. However, as your company grows, it could be counter-productive to continue to treat accounting in this manner. At a particular stage, you must stop thinking of accounting as an unpleasant chore and realize that it is a necessary function that contributes to the success of your business.
One option is to outsource your accounting. But how will you know if it is time to start using professional help for your bookkeeping activities?
Every business is different, and you would need to carry out a detailed examination of your company's activities to determine whether it would benefit from outsourcing this function.
However, there are certain signs could tell you that your company is ready to outsource.1. The business has reached critical mass
Are accounting activities taking up an increasing proportion of your time? Do you find yourself ignoring your business operations because you have to look after your books?
If your answer is “yes,” you may need to accept the fact that it’s time to look for an outsourced accounting firm.
There are other telltale signs as well. You may have added new employees or increased your range of services. As your business grows, the complexities will also increase. Bringing in professionals to manage your books could leave you with more time for your core activities and help to take your business to the next level.2. You are getting overwhelmed
It isn’t easy to manage your books yourself. Accounting involves bookkeeping, payroll, financial reporting, and tax preparation. Not only do these activities take time, but they could also be too complicated for you to handle on your own. If you make an error, it could lead to noncompliance with the applicable regulations.
You could find yourself struggling to manage your books. Even worse, you may start ignoring this activity. If you find yourself in this position, it could be time to look at outsourcing seriously.
"At a particular stage, you must stop thinking of accounting as an unpleasant chore and realize that it is a necessary function that contributes to the success of your business."
3. You don’t have the financial data that you need to make business decisions
Entrepreneurs know how vital it is to have access to data in report form. A report that is designed according to your specifications can help you to focus on the areas that require your attention. Having the ability to drill down on your data can increase efficiency and save time.
However, preparing these reports yourself requires specialized knowledge. It also means devoting time to learning how to operate and work with new software.
If your business has reached the stage where it is difficult for you to keep track of your data yourself, it could be a good idea to seek outside help.
4. The cost of your accounting and finance function justifies outsourcing
Even if your company doesn’t employ a bookkeeper, it still incurs an accounting cost. The main expense, of course, is your time. If you are spending, say, two (2) hours per week on this activity, what is the cost implication?
An analysis that is conducted in this manner may find that outsourced accounting can save you a substantial sum. When you are running the numbers, you should also factor in the other benefits that you will get. These include having ready access to data and the comfort of knowing that by using the services of an outsourced firm, you can be sure that your company will comply with regulatory requirements.
The Bottom Line:
A key issue with many business owners is that they fear losing control of their business finances if they switch over to outsourced accounting. In fact, you will gain greater control as you would be in a position to access your data on a 24/7 basis.
However, the primary advantage is that your accounting records would be maintained and updated by specialized professionals. With this aspect of your business taken care of, you could concentrate on what you do best - work towards increasing your revenues and profits.
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