Have you ever felt overwhelmed by your business’s financial management? If so, you’re not alone.
As a business owner, you wear many hats, from managing operations to overseeing customer relations. Amidst these responsibilities, financial management can often feel overwhelming. From performing primary business functions to managing people and customers, keeping everything running smoothly is difficult.
Among all your responsibilities, not knowing your financial standing or whether you have enough cash for payroll can be stressful, but managing the finances and accounting of a business is not something you have to do alone. Business owners can choose to hire an in-house accountant or outsource their accounting to experts. Here’s why outsourcing accounting might be the best choice for you.
What is Outsourced Accounting?
Outsourced accounting, sometimes called fractional accounting, involves delegating various financial tasks to external professionals. These tasks may include bookkeeping and creation of monthly reports, preparing projections and forecasts, or advising on business decisions. By outsourcing these tasks, businesses can benefit from the expertise and efficiency of specialized teams of accounting professionals.
What Are the Benefits of Outsourcing Accounting vs. Hiring Internally?
- Cost Efficiency: For small to medium-sized businesses, outsourcing accounting functions is often cheaper than hiring full-time accounting employees.
- Continuity and Stability: When an internal accountant resigns, a gap is created in financial management and organizational knowledge. Outsourcing ensures continuity and stability in the accounting function.
- Ease of Recruitment: Finding and hiring qualified accounting professionals can be challenging and time-consuming. Outsourcing eliminates the cost of recruitment and training.
- Expertise and Growth: Sometimes the existing accountant isn’t able to grow with your business or doesn’t have the required expertise for unique transactions. Outsourcing can offer access to a higher level of expertise and service.
- Reduced Workload and Errors: Having one internal accountant can lead to overload and errors. Outsourced accounting teams offer checks and balances, reducing the internal accountant’s workload and the risk of mistakes and fraud. Said another way, outsourcing can offer peace of mind.
- Advisory Services: Outsourced accounting firms often provide advisory services, helping businesses objectively understand their financial standing and make informed decisions. For example, when a business’s revenue is increasing but profits are not, an outsourced accounting expert can help the business owner understand why and how to fix it.
- Custom Financial Reporting: Traditional financial statements may not provide the business owner with the information needed to run the business effectively. Many outsourced accounting professionals can offer custom dashboards of key performance metrics and benchmarking important to the business owner, not just a list of assets and liabilities.
Outsourcing the accounting function can be a strategic move for businesses looking to optimize their financial management and focus on growth. By outsourcing your accounting function, you can focus on what you do best—growing your business—while ensuring your finances are expertly managed. PYA’s experts would be happy to help you determine if outsourcing your accounting functions is right for you.
