Business growth is exciting, but not without growing pains. At a certain point — usually around $1 million in revenue, although sometimes more — you can no longer be involved in every part of your business.
You have to focus on what you’re good at and delegate the rest.
Accounting is one of the first functions that many businesses look to hand off to someone else. It’s vital to maintaining an accurate picture of your finances but doesn’t do much to drive revenue.
Hiring more staff isn’t your only option, though. In many cases, outsourcing your accounting is a better business decision.
Why You Should Consider Outsourcing Your Accounting
Focus on Growth
Unless you’re an accounting firm, accounting is not what’s driving your revenue, nor is it your area of expertise.
You are, however, an expert in your specific industry.
Outsourcing your accounting services frees up more time for you to work on tasks you excel at — the tasks that will bring in more revenue and lead to business growth.
Cut Employee Costs
The average annual salary for a CFO ranges from around $120k – $200k+ and a financial controller will run you ~$90k+.
If those numbers don’t incur sticker-shock, consider this: employees also require hiring, training, benefits, and paying payroll taxes, all of which add to your costs.
Don’t forget about supervision, either — if your accounting department grows large enough, you may need to split it into teams and hire managers.
In many cases, employee costs can eclipse those you’ll incur by outsourcing your accounting.
Not to mention that outsourced firms provide you more scaling flexibility, as we’ll discuss next.
Needing more employees is a good sign, as it means your business is growing. But hiring more employees for your accounting process could take almost 24 days.
On top of that, new hires have to adjust to your company, learning all your systems and processes.
Current staff may be pressed for time, trying to balance an increased accounting load with training and assisting the new employees.
Your fast-growing business doesn’t have months to onboard new accounting staff.
Outsourced accounting services are a much better solution, as they can increase the time and resources allocated to each client on demand. Of course, be sure to read your contract with the firm and see if they require a waiting period before making changes.
Expertise and Guidance
Outsourced accounting firms are your go-to experts for accounting and finance questions.
Any firm you choose will typically have experience working with similar businesses in your industry. Consequently, the firm may have invaluable advice regarding growth and investment opportunities.
Also, they can help you cut costs by analyzing your current budget and offer advice on areas where you may be spending more money than necessary.
Reduce Chances of Fraud
Businesses lose about $150,000 per year to fraud — a large chunk of your annual budget gone right under your nose. Additionally, smaller companies are at an increased risk of fraud than larger organizations.
Fraud can happen to any business, even if you trust your employees.
Outsourcing your accounting reduces the chances of fraud since the outsourced firm is a third party. As a third party, they keep the recordkeeping separate from other accounting/finance functions, like authorization and custody of assets.
Additionally, the outsourced firm has the accounting expertise required to audit your money trail and spot signs of fraud to minimize financial damage.
Access Your Financial Data From Everywhere
Accounting is moving to the cloud — nearly 80% of small businesses use cloud-based accounting.
Outsourced firms use the latest cloud-based accounting software to provide you real-time updates on your accounting records and financial reports from anywhere on any device. Such flexibility makes decision-making substantially easier.
When professionals handle your accounting, you can make decisions with confidence. You’ll always have an accurate financial picture of your business, as well as an expert resource to consult with when you need advice.
How we can help
CFO Hub has years of experience providing outsourced accounting and CFO services to several industries. We tailor our accounting services to your specific needs so you can make the best business decisions.
Contact us today — we’ll handle your accounting so you can focus on what you do best.