Sound financial management and accurate financial reporting are essential for any growing business. A skilled finance department requires full-time employees that may or may not meet your company’s requirements.
However, in-house accounting teams come with high operational and maintenance costs, which can slow down business growth. So it shouldn’t be a surprise that many CEOs are turning to outsourced finance and accounting. With outsourced financial management and sophisticated accounting software, you can completely shift focus on core business operations, gain access to reliable financial data, and save your company in the process.
Outsourcing your bookkeeping to an outsourced accounting firm gives the CFO peace of mind and enough time to focus on important issues within the company. To recognize the reasons why outsourcing and how big of an impact outsourced accounting can have on your business, we must look into each benefit of outsourcing.
A Precise Billing Method
When you decide to outsource your accounting, you will recognize how it saves time and money. Outsourcing makes sense when you consider how outsourcing accounting functions removes the need for the following:
- Unemployment taxes
- Hiring and training new staff members
- Health care benefits
- Paid-time-off
- Infrastructure (office space, investment in technology, need for desks, etc.)
- Utilities
- Expensive technology solutions and accounting systems
- Internal controls
People working in central offices or even remotely, have replaced the in-house accounting function but also lowered all costs. Reliable third party solutions offer executive-level staff members that are available to companies on demand. Business owners can now focus on scaling and add or remove their financial staff as needed. All of this enables a precise billing method where companies only pay for the work performed. This doesn’t only cut costs but increases efficiency as well. Depending on your service provider and your company’s needs, accounting fees can be billed hourly or monthly.
Reduced Operational Costs
Traditional business accounting implies that your company should perform accounting tasks in your office. In some cases, companies chose to have a back-office accounting staff handle their accounting processes for many different reasons. The main one being lower office space costs. Both of these accounting departments can become a constraint when it comes to scaling and transparency. You can’t always count on accurate document management, and additional human resources are needed if your company is constantly growing. This means more investment in technology and training, adding even more reasons to outsource.
Local financial departments are in constant need of office space and inventory. On top of that, regulatory changes may require additional training for your employees, which ads other expenses and restricts your financial capabilities.
Reliability and Efficiency
A company can’t have effective financial planning and accurate financial statements without a reliable finance and accounting team. Most investment decisions are based on the company’s financial health, and inaccurate balance sheets can lead to bad decision-making.
When you outsource bookkeeping, it doesn’t only save your business money but also contributes to efficiency and precision. A skilled outsourced team will make sure that your balance sheets and financial statements are up to date so you can conduct an error-free financial analysis within the company. With expert advice coming from executive-level team members, you can make better financial decisions and provide timely updates to your investors.
In most cases, requests are handled immediately, and reports are delivered to your inbox as quickly as possible. Reliable and effective reporting from your finance and accounting department has become a necessity in the current market. Investors value transparency now more than ever, and it seems there is no better way to achieve it than with outsourcing financing and accounting.
High-Tech Solutions at Low Costs
Technological advancements in accounting may require some companies to invest significantly in tech improvements. However, acquiring advanced software solutions for your company is an expensive business strategy. With outsourced financial management, you gain access to cloud-based software platforms like SIMPL at a fraction of the actual cost. Reputable service providers offer access to these solutions for all of their clients with significantly lower costs. This ensures accurate financial insights with minimal expenses.
Outsourcing Saves Time
If you are handling your finances in-house most of the time, your best-performing employees will be busy with administrative tasks. This gives them less time to focus on essential tasks and limits your access to valuable company resources. Outsourced solutions completely eliminate the need for this. By paying a third-party service provider to handle your books, you can have your most skilled staff members on important positions at all times, while your finances are handled remotely.
Hiring additional staff for your finance department can also slow down your growth and deplete your financial resources quickly. The location of your office will determine the quality of available talent, but you will also need a detailed screening process and a hiring manager. When it comes to finances, you want to consider outsourcing because it will give you access to the very best talent.
Outsourced solutions have an edge in this situation because they have access to large talent pools worldwide. Remote work gives both the financial experts and the service providers the ability to deliver high-quality services at low costs.
How To Find The Best Outsourcing Partner
Like with any other industry, client testimonials should be your starting point. If a company has a good reputation and a long history of satisfied customers, it is worth looking into. Transparent pricing models and flexible contracts are also significant. Getting tied into a contract that penalizes a termination request is bad for your finances and your business in general. Always be on the lookout for companies with experience. The longer they have been in business, the higher the change they are providing quality service to their clients.
Conclusion
Outsourcing your financial operations will clearly save you money. In-house staffing requires constant monitoring, but the current market conditions don’t allow enough time for executives to focus on such tasks. With outsourcing, the CFO can spend more time on decision making and financial management. Precise and reliable financial reports from your service provider can make a huge difference in decision making. If you want to know how outsourced accounting and finance can set your company on a clear path towards growth, feel free to request a free demo today!
