When you set up a business one of the things to consider is what accounting…
Is Outsourced Accounting the Right Strategy for Your Business?
Accounting is an essential process in your business — but can you outsource it? Here’s how to determine whether outsourced accounting is the right choice for your business.
How does outsourced accounting fit in? Resource management is critical to the early days of any company. The launch of any business, company, or startup is a complex, uncertain process. The businesses that succeed in early growth stages and go on to scale and expand are those that are able to do more with less.
In many cases, this means employing teams of highly capable individuals that can multitask, following an intensive working schedule, or setting and achieving strong, reasonable goals. An often overlooked key driver of success, however, is the potential benefits of outsourcing.
Outsourcing specific time consuming tasks or roles can be a highly effective method of minimizing costs and increasing efficiencies. Businesses are able to leverage outsourcing in order to access highly experienced talent without breaking budgets.
A major advantage of outsourcing is the ad-hoc manner in which it can be performed. Businesses that outsource talent need only pay for the work that they require, allowing them to save a significant amount of capital on onboarding, human resources, and other accounting costs.
Outsourcing your accounting can significantly improve your accounting workflow and deliver a range of other benefits. Is outsourcing accounting the right choice for your business?
What are the Benefits of Outsourcing Your Accounting?
The most challenging question faced by businesses considering outsourcing is determining which roles or services to outsource, and which to keep in-house. Virtually any role in the modern business can be outsourced — human resources, IT, legal, and many other roles can be accessed on an as-needed basis.
Businesses that are in extremely early launch stages or startups operating before executing funding rounds may choose to outsource almost every task. Established small businesses, on the other hand, may choose to retain critical tasks in house while outsourcing only specific services.
Accounting is a critical service in any business and is essential when making any business decisions. Good accounting practices result in clear, well-managed books and financial documents, allowing for detailed insight and efficient business strategy execution.
While accounting is a highly important element of your business, it doesn’t have to be performed in-house. Outsourcing accounting for your business to an accounting firm can yield a variety of unexpected benefits and, in most cases, deliver significant ROI.
Whether or not outsourced accounting is the best choice for your business depends on your unique goals and needs. Why should your business consider outsourced accounting?
Flexible Cost Structures
Outsourcing allows businesses to pay only for the services they need. Smaller businesses, for example, may not have enough accounting work to justify the engagement of a full-time or part-time in-house accountant.
Engaging the services of an outsourced accounting firm can help growing businesses protect capital and pay only for the accounting services they need, while ensuring that their accounting needs are met in an efficient, compliant manner.
Professional Service & Expert Advice
Talent and professional experience are essential to businesses of all sizes. Businesses that engage the services of innovative, intelligent individuals that possess extensive experience in their role are far more likely to succeed and scale.
Outsourcing accounting services allows smaller businesses to access accounting professionals with experience and talent that may not be accessible or affordable as full-time in-house employees.
Authoritative, Credible, and Coherent Financial Statements for Investors
Businesses seeking to raise funding, such as startups, must retain and publish highly accurate up-to-date books in order to attract investor attention.
Working with an outsourced accounting firm allows startups to access professional accounting services in order to deliver professional financial statements, while also presenting the opportunity to capture valuable consultation and advice throughout the fundraising process. Outsourced accountants are also able to deliver business valuation services to startups.
Businesses that operate without strict internal controls often find it difficult to ensure that accounting data is entered in an accurate and timely manner. Outsourcing helps to minimize the risk of fraud or error during the accounting process.
Outsourced accounting firms typically include multiple accounting professionals in the accounting process, ensuring that there are no discrepancies or errors.
What are the Benefits of In-House Accounting?
While outsourcing is a highly effective solution for businesses of all sizes, there are a number of specific scenarios in which an in-house accountant may be the best option.
Specialized Needs Adaptability
Businesses that operate in unique or niche sectors often have highly specialized accounting requirements that prevent them from engaging the services of outsourced accountant firms. In some cases, it can be difficult for highly specialized businesses to find an accounting firm that understands the unique needs of their business and are thus best hiring and training accounting staff in-house.
Multitasking & Productivity
Many early-stage businesses or startups employ multitalented individuals that are able to take on more than one role at once. Team members that work in sales or marketing, for example, may play an additional role in customer support or human resources.
It’s possible that your business may operate at a startup stage and work with a team member that is capable of taking on bookkeeping duties during early growth stages. While it’s possible to rely on team members that are able to fulfill bookkeeping duties in early stages, it’s essential to engage the services of a professional accountant when raising capital or preparing financial documents.
The modern always-on economy has created a pool of talent that can be accessed from anywhere, at any time. Any role in your business can be outsourced to a talented individual or firm that can deliver high-quality services — including accounting services.
While completely outsourced accounting isn’t suitable for every business, almost all businesses can benefit from the professional experience delivered by outsourced accounting services in some capacity, delivering operational efficiency and optimized accounting processes.
Determining whether outsourced accounting is right for your business can be a challenging question. If you’re not sure whether outsourcing is suitable for you, reach out to Fullstack for comprehensive guidance today.
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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.