Handling your own accounting duties may be necessary when starting a business. As a small business owner, you might not have employees to delegate tasks to. That changes as your business grows. Perhaps you’re reaching a stage when you’ll no longer be able to stay on top of accounting work alone. You don’t need to hire workers just yet. You can outsource accounting work instead.
Professionals offering outsourced accounting work serve you only when you need them. Thus, outsourcing accounting is more affordable than building your own accounting department.
Signs that it’s time to outsource accounting work to another firm include:
You Struggle to Prioritize All Business Tasks
If your business is growing, accounting tasks may become more time-consuming. They can also grow in complexity. The time you must now devote to accounting responsibilities could prevent you from prioritizing other essential business tasks.
Don’t attempt to address the issue by multitasking. The Harvard Business Review indicates that virtually no one can multitask effectively. Trying to do so will only harm your efficiency and productivity.
Outsource accounting work instead. Doing so allows you to focus on customer-centric tasks. This is key to leveraging your current momentum for sustained business growth.
You’re Not Getting Enough Sleep
You can’t run a business successfully if you aren’t healthy. Unfortunately, running a business could be depriving you of sleep.
That doesn’t need to happen. If your responsibilities as a business owner negatively impact your work-life balance, identify ways to save time while running your business.
Outsourced accounting services may offer a solution. With a team of professionals handling your accounting needs, you can shift towards a healthier work schedule.
You’re Ready to Shift to GAAP
GAAP stands for Generally Accepted Accounting Principles. According to the Office of Justice Programs (OJP), GAAP’s purpose is to standardize the accounting process for businesses in the U.S.
Using GAAP can ensure that business owners generate financial information and financial reporting in similar ways. This helps investors and lenders make informed decisions. Standardized accounting and financial reporting may also assist in enforcing various laws.
You may be unfamiliar with GAAP practices when starting your business. If you’ve been handling your own accounting, you might be tracking your cash flow using whatever tools or accounting platforms are available. Your methods may not conform to GAAP standards.
Switching to GAAP eventually is important. You’ll need to do so if you plan on approaching outside investors. Adhering to GAAP is also useful when applying for grants.
Learning the essentials of GAAP may be worth your time in the long run. However, you might not have time to develop a thorough GAAP policy now.
Doing so might not be necessary, either. If it’s time to switch to GAAP, it’s also time to outsource accounting work. Outsourcing accounting allows you to comply with GAAP more quickly than you could if you were to hire and train your own accounting team.
Your Current Accounting Tech Doesn’t Serve Your Needs
The tools you use for accounting tasks when you first start growing your business might not serve your needs forever. As accounting tasks grow more complex, you may need to embrace software with greater capabilities.
Purchasing these tools yourself could be costly. If you hire an in-house accounting staff, you’ll have to verify that they’re familiar with the tech you’ve already invested in. Or, you’ll have to find out what tools your chosen candidates use. Then, you’ll have to purchase these tools accordingly.
That’s not necessary when you outsource accounting work. Outsourced accounting firms and agencies have their own accounting tools they already use. Working with such a team allows you to essentially upgrade your accounting technology without having to purchase anything new.
You’re Not Prepared for an Audit
Be honest with yourself: If you were to learn the IRS was auditing your business tomorrow, would you feel prepared?
You don’t have to be engaging in fraud for the answer to be “No.” You may be unprepared for an audit because your books are a mess.
A firm offering quality accounting services to small business owners can help you get your financial records in order. You may notice you’re much less stressed running your business once you know someone is managing your books properly.
You’re Struggling Financially
Viewed from one perspective, it may appear your business is thriving. The customers you’ve already served rave about your products or services. Their testimony has helped you attract even more customers. From this angle, your business appears successful.
However, there may be more to the story. A quick analysis of your books could show your business isn’t doing well financially. Maybe you’re struggling to pay bills. Or, perhaps you rarely have the funds you need to make investments that could yield major growth.
An otherwise strong business could experience financial difficulties if no one regularly tracks cash flow. Financial woes despite satisfied clients indicate accounting problems.
This highlights one of the many ways paying outside accounting professionals to handle your accounting needs benefits your company in the long run. Hiring a team to manage your accounting helps you identify the issues that caused your previous financial problems. Once you know what those issues are, you can correct them and guard against them in the future.
You’ve Experienced Fraud
Most of the reasons to outsource accounting apply to business owners who don’t yet have accounting departments. That said, there are instances when someone who has hired a bookkeeper or accountant in the past may decide outsourcing this work is the better option.
For instance, maybe you hired a bookkeeper or accountant who stole from the company or otherwise committed fraud. If so, you may protect yourself going forward by outsourcing accounting to a reputable agency.
Learn How to Outsource Accounting Tasks for Your Small Business Today
Does any of the above sound familiar? You may be ready to outsource accounting work if so.
We at PEAK Outsourcing can help. We offer outsourced back office services like accounting, allowing your business to scale its growth. Learn more by calling us at 1-866-796-0335 or by contacting us online to discuss your project today.