4 Reasons Why Growing Businesses Should Look Outside Their Company For Accounting Expertise

Every business owner knows the positive impact that making the right moves at the right time can have upon a business. Fortunately, there is one strategic move that can result in taking work off your desk and putting money into your top-line revenue.

If staying focused, saving money, securing your records, and scaling your company is on your horizon, then outsourcing your bookkeeping could be the smartest move you could make this quarter. 

Staying Focused

As your business grows, one of the most significant investments you can make is into the strategic direction of your company. This may mean talking with clients, coaching employees, or developing partnerships with other people. So, any amount of time you spend attempting to manage your financials is taking away from your customers, employees, and business growth. For many business owners, trying to maintain their bookkeeping in-house is robbing them of the most precious asset they have – their time!

In his best-selling book, From Good To Great, Jim Collins stresses the importance of what he calls “the hedgehog principle.” Based upon an ancient Greek parable of the hedgehog knowing one big thing, Collins shows how the most successful companies are not scattered but singular in focus. 

The Hedgehog Concept is not a goal to be the best, but an understanding of what you can be the best at. The distinction is crucial. For most growing businesses, outsourcing your bookkeeping is a decidedly strategic move that allows you to stay focused on what you are best at. 

Most likely, quality accounting is not your target focus. So, by outsourcing your bookkeeping, you better serve the strategic direction of your business by focusing on what you are good at.

Saving Money

The principle of sound investment is foundational to good business. Any smart business owner knows that spending a small amount of money now to gain more significant amounts of money in the future is a wise move. It is for that reason that many companies invest money to outsource their bookkeeping to save more money elsewhere. Consider how this might apply to your business:

• Staffing Costs: by contracting your bookkeeping services to an outside firm, you are reducing the employee related expenses of payroll taxes, medical insurance, vacation time, sick days, or additional office space.
• Technology & Software: to properly run your books, you will need various software to organize, report, and analyze the numerous aspects of your income and expenses. By outsourcing your bookkeeping services, you are also saving on compounding expenses of software subscription fees, system updates, and computers to run these services.
• Training & Certification: by choosing not to outsource, you must also invest the time and money to ensure your in-house employee is adequately trained and up-to-date on changing tax codes, payroll, and best practices.

Securing Your Records

There are few things more closely guarded within a business than the internal financial records. After all, the numbers don’t lie. They expose your weaknesses and strengths; they speak plainly about your debt load and profit centers. If this data falls into the wrong hands or is unintentionally leaked through mismanagement, it can be disastrous for your company. 

Additionally, finding someone you can trust to do the job internally, stay with the company long-term, and maintain confidentiality is one unicorn of a job description! Outsourcing your bookkeeping to an accounting service with a history of trustworthy management is one of the smartest moves you can make to secure your financial records.

Scaling Your Business

When your business is small, handling your bookkeeping internally might make sense, but as your business grows and your responsibilities begin to diverge, in-house accounting often fails to adapt. But hiring an outsourced bookkeeping service with controller oversight and consultative feedback enables your business to scale to upwards, without having to hire or train additional staff.

However, the essential lesson here within proper scaling is not only the importance of outsourcing but the timing. When your business is just ramping up, it can be tempting to think that outsourced services are something you should put off until growth demands it. But actually, this sort of catch-up approach can be quite costly. 

Honestly, if we could show you the wasted time and costly financial mistakes that could have been avoided by companies outsourcing sooner, it would astound you. Typically, when business growth outpaces established policies and accounting expectations, companies end up having to unravel all sorts of costly mistakes and bad practices. 

The best time to develop a framework for financial health is now, not then. By setting up good financial habits and systems before seasons of growth come, you will avoid the nauseating regret watching your money mistakenly wasted by botched systems and bad habits.

Make That Change

So, as you look at what remains of this quarter and on into the next, how might moving to outsourced bookkeeping strengthen your business?