Are you the owner of an emerging business with less than $10 million in revenue? Do you maintain an in-house accounting and finance department that is costly and time consuming? Have you considered if you have the right strategy to grow going forward, and if you should take advantage of outsourced resources to help with some of your accounting, bookkeeping, and other day-to-day functions so you can focus on what’s next?
It may be time to talk to a CPA firm to understand what services they offer and how their skillset could benefit your company.
Why should you?
Think about changing the oil in your car. Unless you are a mechanic, you take your car to a service shop where a trained mechanic handles the process in 30 minutes or less. Why? Because they know the necessary steps, what equipment to use, and how to manage the process.
The same thing goes for handling the accounting for a business. CPAs know best practices in long-term strategic planning and the day-to-day accounting functions, and can point you to a host of software and/or service providers to handle your payroll and human resource data management. Accounts payable can be automated, along with bill-payment features – many of which banks provide for free. Moreover, you can download cash receipt data seamlessly from banking sites. From there, the rest is a matter of reviewing, making adjustments, and reconciling accounts on a periodic basis.
If you or someone in your company is not trained in accounting, forming a relationship with a CPA could be quite helpful. CPAs know which software or service providers to use, and specialize in the process of reviewing, adjusting, and reconciling.
When should you, as a business owner, make the decision to outsource your accounting work? When you recognize that you could better leverage your time on other tasks. Are you more adept at the sales process? Would your time be better spent in the production facility? Maybe you want to spend more time with customers. Whatever the reason, your time is important and should be concentrated on business-critical concerns and the financial results of the data.
Owners typically do, and should, be interested in the output of the bookkeeping and accounting process. It is important to receive full data reports, with historical information; projections about upcoming impacts; financial information; and non-financial information which requires analysis, such as number of hours worked or quantity of products distributed.
However, the volume of important information doesn’t necessitate getting caught down in the weeds. Rather, it means finding someone you trust, who can provide you with the right information in a way that helps you make informed decisions for your business.
Benefits of outsourced accounting
The greatest benefit to outsourced accounting is the expanded reporting accountants can provide to business owners. A good advisor can provide measurable ratios and statistics that help the owner spot trends in their business, from one period to the next. Trends can be positive (increased revenue per production hour) or negative (reduced revenue per production hour). Having someone monitoring this information can help a business quickly respond to a negative trend, allowing the business to make the appropriate corrections before the trend makes a large impact.
As a business owner, it can be difficult to efficiently manage your accounting; maintain the best accounting software and processes; and identify and review the key performance indicators that are crucial to successfully running your company. If you think there may be room for improvement, consider sitting down with a CPA to understand what services they offer and how their skillset could benefit your company. You could offload some of your existing work to them and get back to focusing on the other aspects of your business that you love.