Outsource to build a better business
Accounting and Finance services are typically one of the first business processes that companies outsource. As a small business owner or early-stage startup, odds are you don’t have the time to personally perform these tasks and the resources to bring on a full time employee are far greater than you want to spend. Outsourcing these functions can be one of the best decisions you make for your company.
Outsourcing has long been viewed as a strategy reserved for large corporations, but the onset of technology has made it more accessible and cost effective for small businesses. Sites like Freelancer and Fiverr are popular sites that you can have simple tasks or even whole portions or your business outsourced to a non employee.
We have found that there are 3 reasons small business owners or start ups make the decision to outsource certain functions of their business:
Time management is always a focal point when speaking with any startup or small business. There is never enough time in the day. The time that they do have needs to be focused on the core business activities. Ensuring the books and records are accurate, bills and employees are paid, and payroll taxes remitted are not tasks that really add value to the organization. By spending their time on these tasks they are not able to spend time necessary on landing the next big client, rolling out the next iteration of their product or analyze the benefits of entering a new market.
Potential clients often come to us and say, “my business is going great we are busy my sales pipeline is full but I have no cash I just don’t understand.” We often find that business owners are great at selling and growing sales but they often forget the important aspect of how they get paid and never bill their customers. Or, they bill their customers but their customers never pay, not because they don’t want to pay, but because like you they are busy and forget.
Hiring a bookkeeper can help automate this process. When a sales order is entered they can invoice the customer and furthermore follow up on the collection process and make sure the cash gets into your account. By staying on top of this as well you can learn about customers that maybe aren’t good for the money and what you thought was a huge sales opportunity is nothing more than a large write off waiting to happen.
By outsourcing a non-core function of your business, you are engaging an expert in a field. Whether that is expertise is knowledge, i.e. legal, CPA, etc. or skill set, executive assistant, marketing or human resources, these individuals or companies will be experts in their receptive fields.
The time and effort you would have to put in to gain the equivalent experience would take a tremendous amount of time and effort and, let’s be honest, you could never be an expert in all facets of these functions.
Our emphasis with owners is that all though most companies do experience a cost savings by outsourcing their accounting services, it should never be the sole reason. The focus or decision to outsource a function should be driven by what is the best use of my time as well as my team’s time. Do I want the VP of sales responsible for Sales are reconciling our bank account.
The savings you will experience by engaging a professional bookkeeper will not all be reflected in the bottom line. The savings will or better yet the increased costs by not having one will be in missed opportunities. These opportunities can come in a number of forms, from cash flow constraints, trend analysis or in the form of taxes and penalties.
For many startups and small businesses a key to success is gaining back valuable time spent on non-revenue generating activities. By outsourcing these activities not only will you gain back that time you will gain a partner that can help grow your business.