When you start your business, you have to wear a lot of different hats. You're HR, and you're the client liaison, the manager, the marketer, and the accountant all rolled into one. It's never easy, but you can probably manage well enough… until you can't.
At some point, the business (and your responsibilities) will grow, and you'll need to get some help, especially when it comes to your finances. If you've already tried to do your taxes on your own, you know how stressful and chaotic tax season can be. And how easy it can be to make an expensive mistake!
If you've reached that tipping point, it's time to consider outsourced accounting services. Let's take a look at what that is and what that involves.
What Are Outsourced Accounting Solutions?
Outsourced accounting is when a business hires another company or professional to handle its accounting tasks and financial responsibilities. Instead of having an in-house accounting department or staff, they use external experts or firms to manage their financial records, bookkeeping, tax preparation, and other financial tasks.
The outsourced partner can do virtually anything numbers-related based on their skills and your needs, like recording transactions, tracking income and expenses, generating financial statements, managing payroll, and ensuring compliance with tax regulations.
By outsourcing accounting, businesses can focus on their core operations and rely on professionals who specialize in financial matters. It can save time, reduce costs, and provide access to a wider range of expertise. The outsourced accounting team works remotely but communicates and collaborates with the company or individual to keep financial matters in order and help make informed decisions.
What Are the Benefits of Outsourced Accounting Functions?
Imagine you're the captain of a ship. The captain is in charge of navigating the ship, ensuring the safety of everyone on board, and making strategic decisions to reach the ship's destination.
However, there are many other tasks that need to be taken care of for the ship to operate effectively. This is where outsourced accounting comes in.
Outsourced accounting is like having a dedicated crew of experienced sailors who specialize in different aspects of running the ship. They handle tasks such as monitoring the engine, managing supplies, steering the ship, and ensuring everything is running smoothly below deck.
Here are just some of the benefits:
Expertise
Outsourced accounting professionals are experts in their field. They have in-depth knowledge of accounting principles, tax regulations, and financial best practices. They can navigate complex financial waters and provide accurate insights to help you make informed decisions. And if you have an accountant that is experienced in taxes as well, you'll have a navigator that can course-correct and steer you in the right direction so that tax season becomes a breeze (and possibly reduce your tax bill).
Time savings
As the captain, you can focus on steering the ship and making important decisions while the outsourced accounting team takes care of all the accounting tasks. This saves you time and allows you to concentrate on your core responsibilities.
Cost savings
Hiring and training an in-house accounting team can be expensive. With outsourced accounting, you can avoid the costs associated with hiring, training, and maintaining an internal team. You only pay for the services you need when you need them.
Scalability
Outsourced accounting provides scalability, as you can easily adjust the level of services based on your needs. Whether it's handling increased financial transactions or preparing for tax season, the outsourced team can adapt to your requirements.
Accuracy and compliance
The outsourced accounting team ensures that all financial reports are accurate and up to date. They adhere to accounting standards and regulations, reducing the risk of errors or non-compliance with tax laws.
Peace of mind
With a reliable outsourced accounting team, you can sail with peace of mind, knowing that your financial matters are in capable hands. They provide regular updates, reports, and insights to keep you informed about the financial health of your business.
What To Look For In Outsourced Accounting Services?
What should you look for in an outsourced accounting firm? Honestly, it depends! If you are a small company with a relatively straightforward setup, a bookkeeper that can handle the basics for a few hours a week will be more than enough. If you are facing a major audit from the IRS and have fallen behind on your books (or made some mistakes along the way), you need a certified tax practitioner that understands the issues and can help you comply.
Here are a few things to look for:
Expertise and qualifications
Ensure that the outsourced accounting firm has a team of skilled professionals with the necessary expertise and qualifications in accounting and financial management that YOU need. Look for certifications, industry experience, and a track record of delivering quality services.
Scalability and flexibility
Consider the scalability of the outsourced accounting partner. Can they handle your business's growth and evolving needs? Can they help automate the tasks that you simply don't have time for? Are they going to lock you into an expensive proprietary software solution that holds your data hostage if you want to move providers? Look for a partner that can adjust their services based on your requirements and has the infrastructure and resources to support your business as it expands.
Technology and security
Ask about the accounting partner's technology infrastructure and security measures. They should have secure systems and data protection protocols in place to safeguard your financial information. Check if they use encrypted transactions, secure cloud servers, and have data recovery and disaster management plans.
Reputation and references
Research the reputation and credibility of the outsourced accounting firm. Look for client testimonials, case studies, and references from businesses that have used their services. This will give you insights into their performance, reliability, and customer satisfaction.
Clear communication and responsiveness
Effective communication is important when you're working with an outsourced accounting partner. Ensure that they have open lines of communication, are responsive to your queries and concerns, and provide regular updates on your financial matters. You want to be able to pick up the phone and ask a question when you need to!
Cost-effectiveness
While cost shouldn't be the sole determining factor, it matters! Compare pricing models, payment terms, and the overall cost-effectiveness of their services. Everyone would love to have a financial director or CPA on board, but you don't necessarily want to pay your partner a CPA salary. Costs should be fair and affordable.
Why Choose Outsourced Accounting?
Outsourced accounting offers you the freedom to focus on what you do best while leaving the financial tasks to a dedicated team of experts. It's a strategy that has gained popularity because it saves you valuable time and resources, allowing you to allocate them to other important aspects of your business.
By outsourcing your accounting needs, you gain access to a comprehensive accounting team that is committed to ensuring the security and prosperity of your company. They bring in the necessary infrastructure and technology, providing you with the scalability and automation you need to keep up with your business's growth.
With an outsourced accounting partner, you can have peace of mind knowing that your financial matters are in capable hands. They will handle tasks such as bookkeeping, payroll, and financial reporting, allowing you to focus on strategic decision-making and driving your business forward.
By embracing outsourced accounting, you can streamline your operations, save time and money, and gain valuable financial insights that will fuel your company's growth. It's a smart move that enables you to concentrate on what you do best while leaving the numbers to the experts.
Sounds good? Get in touch with LedgerFi. LedgerFi isn't just an outsourced accounting firm. We're accounting experts that genuinely care about helping small businesses succeed.
