In more than 20 years of working with small and medium business owners, I’ve noticed one common thread. Unless the owner is an accountant themselves, none of them went into business because they had a burning desire to do all the bookkeeping and other accounting work themselves. In fact, I’d say that most small business owners would rather avoid it like the plague, including myself.
However, a lot of these same business owners keep struggling along doing that dreaded accounting work all on their own. Why is that? Most of these owners would never try to file their own tax return, but the books they turn over to their accountants can cause a lot of unnecessary work before financial statements can be made ready.
There really has to be a better way, and there is. Outsource your daily, weekly, and monthly accounting duties to a qualified professional. If you are still doing the accounting in your business, I hope that these 5 reasons will help you make the move to outsourcing and save yourself a lot of stress and headaches.
Reason #1: Outsourced Accounting will help you stay focused on what’s most important. As the owner of the company, no one knows your business better than you. Your clear understanding of the vision and mission of your business makes you the person ideal for growing the business.
But if you are bogged down doing the accounting, you’ll spend less of your valuable time working on sales, raising funds, hiring employees and other important duties. Remember that no one can grow your business, or manage your business as well as you can but there are lots of accounting professionals who can do the accounting as well, if not better than you can.
Just think of all the important tasks you are putting off because the urgent accounting ones are getting in the way. You could be improving your product or service, or training your employees, or creating and launching new products.
When you outsource the accounting function, it allows you to spend more time working on your business than in it. That means you are focusing on how to make your business the best it can be and you’ve got time to steer clear of obstacles and problems on the horizon.
Reason #2: You can leverage greater expertise and skill. Like I said, very few non-accountants love doing the accounting work in their business. And for good reason, most don’t have the skill or expertise to do a very good job. When you outsource, you are employing experts that live for doing accounting.
That’s important because the greater expertise and skill means that your accounting tasks are getting completed quickly and correctly. Think of how much time it might take you to do a task compared to an expert, your time is valuable and shouldn’t be wasted. Many small business owners immediately save themselves money by hiring an outsourced bookkeeper because of all the hours they now free up for themselves.
There is a lot to be gained from having a qualified professional doing your bookkeeping and payroll tasks. Not only do you save yourself time, you cut down the errors in your record keeping dramatically. And that’s going to save you money when it comes to filing your taxes, preparing financial statements, and perhaps increase your tax returns.
Your outsourced firm also spends money making sure that they are up to date on all the latest trends in accounting and government compliance. You’ve got a business to run, you don’t have time to be an expert in accounting and your business at the same time.
Reason #3: Outsourcing Bookkeeping and Payroll creates cost efficiencies. Now there are a couple of ways that this happens and each are important for your business.
When you first start your business, you probably started doing the accounting because you reasoned that you couldn’t justify hiring someone to do that job. And you were probably right, a good accounting technician or accountant will need to be paid $40,000 to $75,000 per year on a full time basis.
But you can hire a bookkeeping firm for much lower than that. In fact there are plenty of firms that specialize in helping start ups and price their services to reflect just how much, or how little they are doing for you. And you don’t have to pay workers compensation, health benefits, payroll taxes, vacations and other benefits.
You only pay for the specific services that you really need, when you need it. This helps out with your budget and also leads directly into…
Reason #4: A good bookkeeping & payroll firm will scale with you. If you are using your time more effectively on tasks that are growth related, your business will probably begin growing. And the accounting needs of your business will also grow.
When you are starting out you may not even have enough budget to pay for one part-time person. Good news, you can get started outsourcing for less than the cost of a part-time person. As you grow, you’ll be able to increase the services and the level of service you need as your budget grows.
If you were employing an in-house accountant or bookkeeper, then you’re going to have to hire again soon. But a bookkeeping and payroll firm can grow with you and you don’t have to pay the overhead costs of that growth. Again, you pay only for the services that you require.
If you’ve used some foresight, you may have hired an organization that also provides other important services, like controller oversight, business advisory services, or even human resource services. This lets you quickly build and scale your business without adding really massive costs or management headaches to yourself. Finally…
Reason #5: Reduce the stress on you. Maybe I should have led with this benefit because it really is the most important one. Having less stress is a tremendous benefit to you. Running a successful business requires you to have a clear head and be well-rested.
A lot of you might laugh at that statement. But one of the biggest mistakes people make in business is trying to do everything by themselves. There are a lot of critical tasks to complete and I’ve yet to meet anyone who can do all of them. Well, anyone who can do all of them successfully anyway.
Another idea to consider is that trying to do your own accounting may actually lead to you not having as much knowledge of your financial situation as you should. I’ve found that when you are doing the bookkeeping, you tend to put off a lot of the work. This leads to books that really don’t tell you much, accounts receivable that aren’t being received and payables that don’t get paid.
When you have a professional handling this vital functions, you’ll know where you stand at all times. And you’ll have a lot less problems with Canada Revenue Agency or other tax bodies. That can be the biggest stress reliever of them all.
Remember that as a small business owner there’s always a lot to worry about. You’re pressed for time and it can be impossible to do everything well. It is critical that you spend as much time as you can on the tasks that you are suited to and will bring the most benefit to the company.
f that isn’t accounting then start thinking about how you can outsource your bookkeeping and payroll today. Do your research and think about your needs today and what they might be in the future. Look at the background, the expertise and the reputation of an outsourcing partner before you hire them. Make sure it’s a good fit, just like with any employee.
If you’d like to learn more about outsourcing your accounting, bookkeeping, and payroll functions you should book a complimentary strategy session with us here at Price & Comin LLP. We’ll spend 60 minutes helping you imagine where you’d ideally like to be 12 months from now, identify the tools you have to get there, the obstacles that are in your way and the most important first step to get there.
Jim Brown is the Firm Administrator at Price & Comin LLP. Before joining the Firm, Jim spent more than two decades in the world of sales and marketing and operating an independent consulting business. When not worrying about operational issues, you’ll find Jim working on all things marketing and dreaming up new solutions for our clients.