Let’s start with a formula that will get you up on running about the importance of accounting services:
The necessity to develop a full-fledged brilliant accounting team is directly proportional to the growth of your business. It’s a simple yet powerful note you need to put in your sticky note because the lifeline of your business hinges on it.
As a small business owner, you should consider having either an in-house bookkeeper or outsourcing your accounting work. But, managing all accounting operations in-house isn’t ideal for cost efficiency or productivity. As you know, many small businesses fail within the first year of starting off the ground because the owner tries to do everything on their own, which can get pretty exhausting. Think of a day when you do not have to do any bookkeeping and accounting. You could use your time better, focusing on your business growth, or taking your family out for a fancy dinner or Disneyland. This is where you should outsource the whole thing.
There are plenty of advantages of outsourcing accounting to consider for businesses that are running but perhaps want to expand or find an easier, more effective way of managing their company. But still, if you are looking for accounting services for your business, you’ve probably stopped to wonder “Why do companies usually outsource accounting?” While it is really important to research both viable and good options to find the right fit for your business, we want to lean towards outsourced accounting services as it does offer a plethora of advantages for small- as well as mid-sized businesses who are looking to stay on top of their books, taxes and benefit from their financial expertise.
Nowadays, thanks to modern technologies, most accounting functions can be outsourced, and its important for business owners to know what to look for a firm that allows them to choose from a plethora of services to meet their financial needs. Small businesses always have the option to choose which service needs to be outsourced, which can be done internally, and the cost of it.
Usually, most accounting firms offer the following services:
1: Bookkeeping: It is the most fundamental accounting activity, which tracks and maintains all financial records of a firm, including revenue and expenses. Bookkeeping is normally carried out by a bookkeeper with basic financial qualifications.
2: Monthly Accounting: This is more advanced than bookkeeping, involves closing the monthly books, and gives an idea of what the current financial health is. Most monthly accounting processes are performed by a higher level of financial professional such as an accountant.
3: Operational Support: This is where various firms usually help business owners identify opportunities to increase efficiency and get better information through proper processes and technology applications. It is usually provided by financial professionals or consultants who help businesses perform more effectively.
4: Outsourced CFO: This gives businesses an opportunity to contract a top-level financial expert on a part-time basis for consulting on top-tier level financial support. They are also called “Fractional CFO services” (It’s cooler than it sounds, trust us).
3: Cash Flow Forecasting: This is a future-focused accounting practice that reviews cash inflows and outflows to create short- and long-term projected cash flow. Experienced, high-level accountants can perform cash flow forecasting.
Now let’s understand the benefits of hiring external accounting services.
Why should you Outsource Accounting Services
Lowering Overhead Costs
Although it may seem somewhat counterintuitive, one of the greatest reasons to outsource accounting is to save your business money. If you pay an accountant directly, you’d be covering full- or part-time wages, then benefits, and payroll taxes, among other items, whereas finding an accountant outside of a company is less complicated and altogether cheaper.
Rather than having an in-house accounting department, you can make use of one of the plans available with FreshBooks. There are numerous types of accounting services, bookkeeping services, and plans from which to choose, so you can tailor your company’s accounting plan to fit your needs.
Access to Expertise and Specialized Skills
When you hire an external accountant, you will have access to their niche, expert skills and the accumulated wealth of knowledge that years spent working in the field have endowed them with.
The advantages of outsourcing the finance and accounting services include that you will have somebody to attend to your taxes, assist in the managing of assets, and even assist in making some of your critical business decisions. An accountant can be very useful in your business.
Accounting firms have probably dealt with many businesses like yours and they have seen it all, and done it all, including the successes as well as the mistakes that other companies have made. This experience makes them well-equipped to apply their knowledge to your business.
Enhance Data Security and Confidentiality
External accounting companies have the knowledge of security procedures and data protection standards. Most of these transactions and services today happen in the online sphere, thus making it pertinent to most people. The company will then have access to the best possible cybersecurity technology that avoids data theft.
Reduce Staffing Issues
Because they are not in your office, the external accountant will not have a personal stake in any decisions they are making and will ensure full compliance with legal requirements without awkward interactions or social obligations getting mixed into their decision-making process. This eliminates certain biases that could be harmful to your business moving forward.
There are other tremendous advantages of outsourcing over hiring an in-house bookkeeper, such as a more objective viewpoint and seeing the large financial picture without being lost in details not relevant to that big picture.
Scalability and Flexibility
When your business grows, so do your responsibilities. One of the advantages of outsourced accounting is that when you hire somebody with experience in scaling up, they can help you work on your future plans, manage growth, and make sure you are still making profits as you grow. An external accountant will give you accurate and detailed financial reports that will keep you competitive in your business.
Time Savings and Efficiency
It can take a huge chunk of time off your plate to have someone outside of your company managing bookkeeping and financial records. They can always deal with legal compliance, employee wages, paying suppliers, managing expenses and everything else so that you can focus on other aspects of running a company or like we suggest, take a break in between for recharging.
Account management can be complex, especially as your business gains momentum, so hiring a professional whom you know you can trust to handle these financial and growth aspects can make your workday more focused and efficient.
Get Detailed and Accurate Financial Reports
An accounting firm will be full of very well-educated and experienced bookkeepers and accountants. The reports they will yield will be very detailed and accurate. This will ensure that you meet all your obligations to the taxman legally, and it will also be able to keep a relatively good handle on the current financial health of your business.
Access to Advanced Technology and Tools
Financial software can be complicated and not very intuitive when you first begin to learn to use it, and your accountant can assist you in implementing these kinds of new financial technology into your reporting and daily workflow.
Keeping up to date with the latest software and accounting function tools available in the market will ensure that you keep up with the times so your company can thrive.
Benefit from Expert Insight and Counsel
Outsource accounting firms can offer the know-how that you might not have yourself; these accountants are working from an office with many professional accountants working together. They get a motivating factor to grow and acquire knowledge about the current change of laws and regulations in order to keep themselves updated. For difficult or unusual situations at work, they will even be able to discuss some questions with colleagues and ask their advice.
How Does Accounting Help Businesses?
For many business owners, accounting is probably considered a necessary evil. But wise business owners recognize how accounting can help them make better business decisions to enhance both short-term and long-term financial health. So what are the benefits of accounting to a business, and how can bookkeeping and accounting services help take your business to the next level?
Meaningful budgets: Accounting services help business owners create achievable budgets that are informed by current and past spending and revenue trends of your business. A well-designed operating budget will help a business owner plan for the future and create accountability throughout the organization and among every single employee out there.
Inform major spending: A significant business purchase or new employee can be frightening to consider without good financial information. When making major decisions, it is helpful to know not only the current health of the business but also what the likely financial impact of those changes would be. An experienced financial professional can bring light to those decisions and provide confidence and peace of mind.
Monitor financial health: A well-designed accounting system will provide timely and accurate information about your operating performance as well as the overall financial health of the company.
Let’s consider an example to explain how accounting services can benefit your small business. Let’s say you are running a tech startup that recently launched the first product—a huge success—and you are seeing a large increase in your revenue. While you are counting your revenue and celebrating the big win, outsourced accounting services can help the tech startup in both short- and long-term ways.
An accountant can help the startup develop a budget from current revenue streams, expected revenue for the balance of the fiscal year, and anticipated expenses to grow and support their new product. In addition, an accounting expert can utilize a financial projection to guide the startup through the financial pros and cons associated with business decisions such as hiring a new employee to offer technical support to the clients using their product.
Regardless of the business size or type of service that you have, there’s bound to be some kind of financial accountability that will be required from you. You’ll probably save yourself thousands each year by employing a full-time or part-time professional external accountant instead of taking them on to your company. You will always find somebody with the right level of expertise needed to manage your company’s finances, with better security and higher-quality results than an in-house accountant would be able to provide. So, if you are looking to outsource the services, then click here.
