You don’t need anyone telling you just how difficult keeping a business viable is right now, you already know that and you’re constantly looking for new solutions. If you are a small business owner it’s even more difficult because you can’t take advantage of economies of scale and literally every dollar spent has an immediate impact on your bottom line. One option you can use to improve your efficiency and at the same time chip away at expense is to outsource your accounting function. Here are a few reasons why.
1. Become a more effective manager/owner
Is outsourcing accounting going to somehow magically improve your management skills? Probably not but it will give you more time to do what you do best and that’s run the business. Spending time processing the accounting function is no longer your responsibility leaving you free to address more pressing issues.
2. Market more intelligently
One of the many advantages of using a service whose core competency is accounting and financial management is the remarkable intelligence they can develop on your organization. Learn what specific product lines are really earning and adjust pricing and marketing budgets to grab a larger share of the market.
3. Dump customers who don’t deserve to be customers
You know who we’re talking about don’t you? This is the customer who always has a steady ordering history matched by his equally consistent habit of paying outside of terms. Professional receivables reports will identify just who those customers are that you would be better off without. Don’t let bad debt drag down your cash flow.
4. Retain control
Many owners, particularly small business owners believe that they lose control of their financial operation if they give it to someone else to run. Nothing could be further from the truth. You can design the agreement to retain as much or as little control as you are comfortable.
5. Real time updates available from your office or any Starbucks
Thanks to a technology known as ASP you can log on to your data via a secure server from anywhere there is an internet connection. Reports are updated in real time so you always have the latest financial data. How handy would that be if you’re at a client’s office discussing receivables?
6. It costs less than it’s worth
If you’re doing the accounting yourself obviously using a service is going to free up a bunch of your time. What’s your time worth? It’s a more difficult decision if you have to let an employee or two go but there are significant savings in doing that not the least of which is just reducing your liability as an employer. Typically a full service accounting firm will run about 80% of what you pay in gross wages but when you toss in taxes, benefits and insurance the savings can be huge.
7. Better tax planning
Just like you have far more experience in the business you’re in than the accounting service does, they have far more experience in accounting and tax planning than you do. Using an expert accounting service gives you access to that expertise which can result in tax strategies that you may never have considered.
Times are tough now and they are likely to remain difficult for some time t