Current Accounting System Not Working? 6 Reasons to Outsource
You started your business because you had a dream. You saw a need or a problem common to many individuals or businesses, and you had an idea for a product that would meet that need or solve that problem. You looked forward to creating it. Perfecting it. Identifying your market, making critical connections by networking, and managing the health – and growth — of your promising venture.
But now you find yourself spending hours every week trying to figure out whether you’re making or losing money, and why or why not. You’re struggling to pay your taxes and suppliers and other expenses, and you’re having to chase down payments from customers so you can fulfill those obligations. You’ve borrowed money or taken on investors to get the business going, and those people want regular updates, reports that you just can’t seem to get right.
Whether you’re using software or still trying to get by with paper and the occasional spreadsheet, you’ve discovered that you just plain don’t know enough about the accounting process. You know that it’s supposed to be an organized, accurate set of procedures, and your data and workflow are anything but.
Outsourcing a Good Solution
That’s the first reason to consider outsourcing your accounting, hiring a professional financial firm to take it off your hands: Business accounting is based on a complex set of rules.Unless you’ve studied its requirements and structure and standard workflow, even a computer application that’s designed for non-accountants will be foreign to you. It will steal many valuable hours from you, create a great deal of frustration, and make the people in your business universe dissatisfied and unhappy.
You don’t lose control of your company when you outsource your accounting. In fact, you get a better command of your finances. The outsourced firm works in an advisory capacity, and you still make the big decisions. You will probably even feel like you have more control because you’ll have a much better understanding of your company’s financial strengths and weaknesses.
This leads to the third reason to outsource: You no longer have to concern yourself with the day-to-day mechanics of the accounting process. Your new partners will take over your financial fundamentals, and they will manage them in a timely, accurate fashion by implementing that complex set of rules. You don’t have to sweat the small stuff.
Better Focus, Better Decisions
As a result, you will have more time to concentrate on the work that you launched your business to do. You know how many times during the day you have to stop what you’re doing – updating your marketing plan, meeting with customers, thinking about new products, interviewing, brainstorming, managing – to answer an accounting question or run a report or create a file for a new customer. And you know that after every interruption, it takes time to get back on track with your earlier task – more time than you might think. (“Task switching cost” is a topic we’ll explore in more detail next month.)
You’re the visionary, the individual with the original idea that became a business. Outsourcing lets the accounting experts do what they you best so that you can do what you do best.
Because your accounting is being handled by a professional team, and because you have more time to focus, the business decisions you make will be based on more sound financial information and more thoughtful consideration on your part. This goes without saying. When you shed a time-consuming, anxiety-producing set of responsibilities while an experienced third party is producing valuable financial information and insight, you can expect more positive outcomes.
Finally, even if you did manage to figure out how to use accounting software, you can’t compete with your outsourced partner’s technology. Outsourcing firms use the best, most sophisticated state-of-the-art applications These advanced solutions work in the cloud, so you’ll have instant, easy access to your data and your accounting partners.
Obviously, outsourcing costs money. But if you consider the time and mental focus you’re wasting by trying to manage your own finances (losing revenue in the process), outsourcing’s affordability may translate to increased profitability for your company.