7 Ways Accounting and Bookkeeping Services Change the Game for Founders
In the early stages of your company, understanding all aspects of your operations is integral to establishing a firm business foundation. Often, founders end up juggling several responsibilities, from customer service, sales, and marketing to bookkeeping. However, this practice becomes relatively inefficient and overwhelming as your company grows.
An efficient way to ease your workload is to outsource some aspects of your business to maintain and support growth. One of the operations you can outsource to third-party service providers is accounting and bookkeeping.
Below, we’ll discuss seven ways founders and CEOs benefit from outsourcing accounting and bookkeeping services to a company with the right knowledge and qualifications.
Why Are Bookkeeping Services So Important?
Bookkeeping is the practice of recording and tracking a company’s financial transactions. Bookkeepers summarize your business’s activities into financial reports to show your business’s financial position and performance at any given time. Bookkeeping supports accurate accounting practices to ensure the sustainability of a business. Bookkeeping services also help your business manage its cash flow, plan investments, and meet financial obligations.
When Do You Know It’s Time to Hire an Accounting Team?
The following are the tell-tale signs your business needs outsourced accounting and bookkeeping services:
- Spending too much time on accounting processes: Multitasking accounting tasks with other company responsibilities may be costing your business productivity. If you spend more time handling your accounting process at the expense of other duties, such as working with clients, it is time to outsource your accounting services.
- Employee fraud: If you are concerned about employee fraud, consider bringing in a professional accounting team. By outsourcing your accounting services, you can rest assured your business’s finances are accurately reported.
- Delays in accounting and payroll: If crucial aspects of your accounting, such as payroll and tax returns, are often turned in late owing to the heavy workload, outsource your accounting services. One benefit of working with an accounting firm is the peace of mind knowing that your books are maintained consistently even in your absence.
- Scaling your business: If you are ready to scale your business, consider outsourcing your accounting operations. With an accounting team, you can focus more energy on company growth and planning to increase revenue and boost brand image.
7 Ways Founders Benefit From Accounting and Bookkeeping Services
One of the essential benefits of outsourcing your accounting to a dedicated account manager is the savings it brings to your business. A 2020 Deloitte Global Outsourcing Survey reveals the biggest reason why 70% of enterprises outsource is cost savings. With outsourced accounting, you avoid costs related to recruiting and training full-time employees. At the beginning stages of your company, labor-related costs can eat away a substantial portion of your profits.
One of the essential benefits of outsourced accounting is the savings it brings to your business. With outsourced accounting, you avoid costs related to recruiting and training full-time employees. At the beginning stages of your company, labor-related costs can eat away a substantial portion of your profits.
A crucial skill that every successful business owner has mastered is the ability to delegate responsibilities to save time and enhance productivity. If you spend too much time-solving accounting issues at the expense of other high-level tasks that improve the bottom line for your business, your productivity will be impacted. Outsourced accounting helps you avoid mundane back-office tasks, so you focus more energy on improving your profits.
Promotes Good Business Practices
Successful businesses strive to stay compliant with state and federal tax laws. If you need to implement accounting operations to ensure compliance and productivity, consider outsourcing your accounting and bookkeeping operations. Hiring an accounting team ensures a high accuracy level in accounts operations because such services are provided by highly knowledgeable and experienced staff with the resources and skills to deliver accurate results cost-effectively. Ideally, accounting firms have the resources to comprehensively look at all the aspects of your finances, from the P&L statement, the balance sheet, margins, and expenses, to the revenue. Using an outsourced accounting service guarantees access to cutting-edge accounting software to help your company stay compliant.
Better Cash Flow Management
Professional bookkeeping helps you gain a 360-degree view of your business’s cash flow. Outsourced accounting provides valuable revenue insights you need to make crucial decisions, such as making new hires or scaling your investments. In the absence of effective bookkeeping solutions, you could miss accurate and timely information to make decisions that could improve your business.
Prepares You for Tax Season and Audits
Business taxation and audits are complex processes that could panic even the most seasoned entrepreneur. Outsourcing your accounting and bookkeeping services can help you better prepare for tax season and audits, so you stay compliant. It ensures every financial aspect of your business is tracked and well documented to ease the tax season processes. Besides, with an accounting team on your side, you avoid missing out on valuable tax deductions because of missing records.
Provides Access to Automation Technologies
Using appropriate accounting automation software can help improve business efficiency, enhance productivity and reduce risks. Unfortunately, most small-scale businesses and startups lack the resources to implement modern automation technologies in their operations. Fortunately, by partnering with an accounting company, you gain access to a variety of financial reporting and analysis tools.
Most businesses want to expand and grow their operations quickly, but many don’t have the infrastructure to do so. Outsourced accounting allows small businesses access to large-company infrastructure to scale faster without added costs. Ideally, you can scale the bookkeeping services as your business grows while avoiding costs related to buying additional infrastructure. Because outsourcing your accounting and bookkeeping allows you to hire accounting services only when a need arises, you avoid worrying about your business growing too fast to outpace your existing infrastructure.
What Accounting and Bookkeepingasks to Outsource
The accounting tasks to outsource could vary depending on your specific industry and individual business need. However, some specific bookkeeping functions are better handled by a third party regardless of company specifics. The following are the broad categories of bookkeeping tasks to outsource:
Repetitive Financial Tasks
Consider outsourcing repetitive or mundane financial tasks to reduce the workload for your staff and improve their overall productivity. Some repetitive financial tasks to outsource include collections, accounts receivable, accounts payable, financial reporting, invoicing, and internal reporting.
Manual financial entries are typically prone to errors. When handling such tasks, it pays to utilize an experienced bookkeeper with the right tools to guarantee a higher level of accuracy. Accounting firms are typically less likely to make mistakes compared to business owners as they have more robust checks incorporated into their processes. They also utilize the best software and other resources to minimize simple errors that could cost your business. Some of the manual bookkeeping tasks to outsource include:
- Customer credit agreements
- Bank and credit reconciliations
- Special payment terms
Payroll Related Activities
Businesses with employees typically deal with payroll-related operations. Outsourcing these activities improves efficiency by simplifying compensation for your employees. Professional bookkeepers have the skills and knowledge to efficiently implement and manage payroll software to make running payroll easier. They can also help automate local, state, and federal tax filings to ensure your business complies with industry regulations. Some of the payroll-related activities to outsource include:
- Wage garnishments
- Workers compensation
- Employee compensation
- Employee tax withholdings
- Child support payments
- Time tracking
- PTO approvals and tracking
Many business owners dread preparing and filing taxes due to the complexity of the entire process. Outsourcing tax functions ensure your tax filings are free of errors. Bookkeepers can also use their vast experience to help with leveraging tax incentives. Tax functions to outsource include:
- Local and state tax filing
- New hire filing with the state
- Issuing of W-2 and 1099 Forms
Tips for Choosing an Accounting Company
Choosing the right accounting company to handle your business’s accounts is essential. The ideal company should have the resources and experience to provide competent financial advice while ensuring security over your accounting records.
The following are some of the qualities to look for in a third-party accounting partner:
Experience: Ensure the staff you choose has staff with years of experience to guarantee the best results. Their knowledge and experience should cover multiple industries and niches. Determine whether your company has a track record while working with your specific industry.
Excellent communication: While interviewing accounting companies, check their dedication level and commitment to providing seamless communications. An excellent partner should have a robust communication system to keep you updated on your company’s important accounting operations.
Impressive customer reviews: Determine whether past customers were satisfied with the services provided by the accounting company you are interviewing. A smart approach is to read Google and Facebook reviews about a potential company. Ensure you go through as many reviews as possible while paying attention to details such as positive and negative feedback and the amount of time that has passed since it received the reviews.
Cutting-edge software: Ensure you hire a technologically updated company and use the most advanced software in the market. Cutting-edge accounting software can easily identify loopholes in your finances and keep bookkeepers abreast of any complicated errors in their functions.
Outsource Your Accounting and Bookkeeping to hiline
Juggling the operations of your bookkeeping department with other managerial roles can be tedious and time-consuming. Oftentimes, it takes priority over other valuable tasks that can improve your bottom line. If you are a founder or CEO, consider outsourcing your accounting and bookkeeping services to enhance the efficiency of your business, boost customer experience, and improve your profits.
If outsourcing has crossed your mind, contact hiline today. At hiline, we provide small and medium-sized businesses with best-in-class outsourced accounting solutions to help them maximize their profits. We offer customized finance, bookkeeping, payroll, tax, and HR services for startups, influencers, streamers, and budding businesses. Contact us today to schedule a consultation.
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