When you start a small business, you’re driven by passion and grit. But as your business grows, so do its demands.
Many entrepreneurs make the mistake of wearing too many hats, seeking to cut expenses by handling their own bookkeeping and financial needs. These activities are necessary, but they can extinguish your drive and steal attention from the revenue-generating activities at which you excel.
Outsourcing your financial needs to an accounting firm lets you get your head back in the game and brings a wide array of other benefits as well.
In this article, we’ll explain some of the ways that outsourced accounting can benefit small businesses.
1. Outsourced Accounting Helps Small Businesses Access Expert Advice
Staff accountants tend to be generalists, not specialists. This deficiency can make it difficult for business owners to hire a financial staff capable of keeping up with business regulations and providing expert guidance for the company’s financial future.
At an outsourced accounting firm, you’ll find entire teams of financial professionals who live, eat, and breathe their profession.
These financial gurus have often spent considerable time taking additional classes and seminars to stay current on business regulations, new technologies, and other economic developments that impact the small business community.
When you outsource your financial needs to a panel of experts, you can have the confidence that you’re receiving the most knowledgeable, objective financial services the industry has to offer.
2. Outsourced Accounting Helps Small Businesses Adhere to Compliance Requirements
Every entrepreneur understands the frustration that comes from navigating the ever-changing sea of business regulations.
Violating these regulations can leave you facing penalties and fines and slow your momentum as you bring your company into compliance.
Partnering with an outsourced accounting team can help you avoid these penalties and stay up-to-date with the regulations and requirements that govern your business.
These accounting experts make it their duty to stay “in the know” on the latest industry requirements and monitor evolving laws so that they can provide comprehensive guidance for every small business.
This persistence helps you adhere to existing compliance requirements and provides peace of mind that you can adapt to any future changes that come your way.
3. Outsourced Accounting Helps Small Businesses Lower the Cost of Accounting
Hiring an in-house accountant can take a significant bite out of your business. According to the U.S. Bureau of Labor Statistics, the typical rate for a CPA is $40 per hour.
These rates can increase based on the accountant’s experience, area of expertise, and the work you ask them to perform.
Even a basic bookkeeper can run $20 per hour, and on top of these fees, you may have to provide benefits, a workspace, and that’s to say nothing of the time you spend in the interview and onboarding process.
Admittedly, outsourced accounting costs will vary by the needs of your business, but these rates are typically much, much lower than adding an accountant to your staff.
Plus, by relying on the expert-level guidance of an accounting firm, you may be able to optimize your cash flow and improve the profitability of your business.
4. Outsourced Accounting Helps Small Businesses Leverage the Right Accounting Software
The right tools make all of the difference. Outsourced accounting firms rely on the latest technology and software platforms to serve their clients. The very best companies give their clients total access to this financial data.
With Lavoie, for example, our software gives you real-time visibility into the performance of your business, and this information can help you manage your cash flow and optimize your business strategy accordingly.
Using the right accounting software naturally demands airtight security. Outsourced accounting can protect you from data loss or privacy breaches without compromising your sense of ownership over your business data.
Best of all, the integrated software platforms used by today’s firms allow you to better share data between functional departments, which can streamline otherwise disconnected processes as your business grows.
5. Outsourced Accounting Helps Small Businesses Spend Less Time on Accounting Processes
No business owner should be spending their time clicking around in QuickBooks. For that matter, neither should your valued employees.
One of the greatest benefits of outsourcing your accounting processes is that you and your team members can spend time where it belongs: growing your core business and attending to your customers’ needs.
Outsourced accounting is, therefore, an investment. The return on this investment comes from the revenue-generating activity you and your staff can focus on while a team of professionals handles your finances.
One of the reasons entrepreneurs sink their own time into their books is because they want better control of their company’s finances.
But as we noted above, the advanced software offered by accounting firms like Lavoie give business owners real-time access to their company data.
This service means that you’ll be getting more control over your company by partnering with an accounting firm, not less.
6. Outsourced Accounting Helps Small Businesses Tackle Employee Fraud
According to the U.S. Chamber of Commerce, 75% of employees have stolen from their companies, and nearly 1 out of 3 businesses fail because of employee fraud.
Forensic accountants have special training to ferret out bookkeeping irregularities and other financial crimes, which can protect your business from being victimized by unscrupulous employees.
An outsourced accounting firm can help tackle various forms of employee fraud, and their presence may even act as a deterrent to prevent employees from attempting fraud in the first place.
If a fraud investigation should result in litigation, it often helps to have the impartial reporting of a third-party financial professional to strengthen your case.
7. Outsourced Accounting Helps Small Businesses Avoid Delays in Accounting and Payroll
Staff accountants can introduce delays in their parent company’s accounting and payroll processes.
Some of these delays are simply a matter of an accountant taking a vacation or a sick day. In other cases, a staff accountant can merely get behind in paperwork, causing delays in financial reporting or even causing paychecks to be delayed.
Outsourced accounting can keep the wheels of your business running in sync and prevent these sorts of delays. By relying on a team of financial professionals, you’ll have the confidence that your financial needs are consistently and accurately met.
8. Outsourced Accounting Helps Small Businesses Keep Up with Growing Finances
One of the more unusual challenges for any business owner is how to handle their success. As your business grows, it’s important to learn how to manage your cash flow to sustain your business and provide manageable growth.
An accounting firm can help you strategize and plan, offering financial forecasting and reporting that can help you refine your approach and optimize for the future.
This advice means that the best accounting firms grow with you. At Lavoie, for example, we aim to build long-term relationships to serve our clients’ needs over the long haul.
At Lavoie, we believe that today’s small business owners can become tomorrow’s industry leaders, and we’re committed to you every step of the way.
We’d love to discuss how our customized financial solutions can optimize your business and provide innovative solutions to give you an edge in today’s competitive marketplace.
Contact us today. We’d be glad to hear about your current needs and tell you how our team might meet them.