7 Compelling Reasons to Partner with an Outsourced Accounting Firm
A vital decision all business owners must make at certain points throughout their journey is when and how to delegate specific tasks. Even if it’s something you enjoy doing, if it’s not your expertise or core function, there will come a time when you have to decide to remove it from your plate.
It may not be a surprise to learn that accounting is typically one of the first responsibilities to go, with 37% of small businesses opting for outsourced accounting (and IT)—we get it, accounting is hard work! And the more your business grows, the more work it comes.
Are you one of those business owners debating whether it’s time to offload a significant task like accounting? Read on for the top seven benefits of hiring an accounting and bookkeeping firm.
1. Reduce Business Costs
Perhaps the primary driver for choosing outsourced accounting is cost savings. Consider that Indeed reports the average salary for accountants is $55,459 per year.
While the average hourly rate of an external accountant varies widely based on factors like location, experience, and level of service, the flexibiliity means you can find something that fits your budget. These firms typically offer flexible outsourced accounting services and pricing models, allowing businesses to pay only for the services they need. They also work quickly thanks to their expertise and advanced tools.
Whether you’re a solopreneur or have a small growing team, hiring an accounting and bookkeeping firm means you don’t have to hire a W-2 employee. You’ll save significantly by avoiding the salary, payroll taxes, benefits, and office equipment of an employee, which may not fit your small business budget.
In addition to paying accounting staff, consider the time and costs involved in recruiting accounting employees. You (or another team member) must search for talent, screen them, interview them, and train them. When you hire an accounting firm, you mitigate that costly process.
Finally, by having a bookkeeper’s eyes on your daily, weekly, and monthly activity, you’ll mitigate unnecessary costs like fees, overlooked or forgotten memberships and subscriptions, and interest. They can also help identify other opportunities to lower your expenses.
2. Ensure Expertise & Accuracy
Research found that 60% of small business owners don’t feel knowledgeable about accounting. You shouldn’t have to be an expert at everything. However, partnering with one can fuel your company’s growth!
Outsourced accounting companies specialize in their field, bringing extensive knowledge and experience to the table. This means:
Fewer chances of errors
Adherence to compliance and regulations
More robust and accurate financial reporting
Clear, real-time financial insights empower you to make smarter business decisions and avoid costly mistakes (e.g., debt, high-risk purchases or investments, and other risky moves that could cost you your business). Instead, you’ll be able to grow faster by understanding your profitability, cash flow, and areas of opportunity.
Additionally, an external accountant will have an understanding of complex accounting methods, such as work-in-progress (WIP). Many contractors and manufacturing businesses must recognize WIPs, an inventory management term that refers to the cost of goods in the process of being made. This can include labor, raw materials, and overhead.
3. Focus on Your Business—Not the Books
According to Deloitte’s Global Outsourcing Survey, 65% of respondents note “enabling focus on core functions” as a key benefit of outsourcing. And another survey found that 47% of small business owners feel that finances are “the worst part” of operations.
Time to remove the tasks that don’t bring you joy!
Outsourced accounting is one major area empowering you to reclaim your time and focus on doing what you do best. Thanks to their extensive experience, your accounting firm will manage legal compliance, payroll, accounts payable and receivable (AP/AR), depreciation, and taxes (if they offer tax services). You and your team will enjoy more bandwidth to concentrate on your core competencies and strategic objectives, fostering growth and innovation.
Plus, you’ll free up time and give yourself more room to enjoy other things you love outside of work. After all, you didn’t launch your own business to work on it all the time—and especially not to stress about the numbers!
4. Scale Seamlessly
As you grow, you’ll also need an accounting team that can scale with you. An outsourced accounting firm that acts as an extension of your team can quickly adjust their services to accommodate your business’s changing needs, considering your current circumstances as well as your future and big-picture goals. They’ll understand what significant growth entails when it comes to everything from your basic bookkeeping to your more complex accounting, tax, and payroll needs—all while helping you remain profitable.
On the other hand, if your business is a seasonal one and fluctuates accordingly (e.g., landscapers or roofers), or you go through a difficult period, you have the flexibility to scale back on accounting services. You won’t have to stress about paying or letting go of accounting staff during slow times.
5. Benefit from the Latest Technology
Many small business owners don’t use accounting software because they worry it is:
Not secure (38%)
Too expensive (35%)
Too difficult to learn (18%)
Fortunately, your outsourced accountant is already knowledgeable and adept in the latest software and tools, which means you and your team don’t have to be. They can train you on the essentials so you have access to reporting, but they’ll take care of the complexities for you and provide regular reporting.
Not to mention, your bookkeeper can help you integrate your accounting platform and financial applications it with the rest of your processes and systems. Many offer automation features, enabling even more efficiency.
Access to cutting-edge technology allows you to benefit from it with more accurate financial insights and streamlined processes without investing heavily in software or training.
6. Enjoy Peace of Mind with Enhanced Data Security
With the majority of transactions occurring online and the ever-evolving financial fraud scams, cybersecurity is crucial to preventing identity theft. Reputable accounting firms implement robust security measures to safeguard sensitive financial data, meaning you can rest easily when it comes to confidentiality and compliance. Your client information will be secure, even in the most sensitive situations (e.g., businesses bound by HIPAA requirements).
7. Maintain Timeliness & Lower Risk
In addition to cybersecurity, an external accountant reduces your company’s legal and financial exposure by submitting required filings and payments on time. They are well-versed in current regulations and changes in tax laws. This reduces the risk of non-compliance and associated penalties, which could be a heavy hit on a small business.
It’s also your accountant’s job to keep your books, bills, invoices, receipts, and other financial and tax documentation organized. They will prioritize deadlines to ensure all paperwork and payments are completed accurately and on time.
Simply put, they’ll ensure your bills are paid on time, and YOU get paid faster because they’ll be monitoring open transactions weekly and monthly. No more overlooking contractor or vendor payments or waiting frustratingly for outstanding payments!
Outsource Your Accounting & Get Back to Business
Now that you’ve contemplated the benefits of outsourced accounting, you understand that it’s an investment in your business’s growth! Hiring an accounting service rather than recruiting and training an employee can save you significantly and offer crucial insights from an outside expert’s eye.
Whether you need simple bookkeeping support or a comprehensive accounting, payroll, and tax team, JLS Accounting can offer the solution that best suits your business. Book an intro call to tell us more about your needs and get started today!