Outsourcing Accounting & Bookkeeping

I didn’t start my own business so I could manage the accounting back office. I know it’s important, but my time is better spent on other core tasks. At the same time I’m a little concerned about financial controls.

You’re right to feel that way. Your time and attention should be spent on the business core capabilities – innovating your product or service and strengthening relationships with team members and with customers. Yes the accounting & finance is important, but if you’re willing to admit it’s not one of your strengths then outsourcing to professionals is probably the best solution. By outsourcing to Virtual BeanCounters the daily accounting and bookkeeping is just done right and is up to date. With our system the information is at your fingertips. The article below explains it better.

 

Good Numbers Every Day Help Business Owners Improve Profits, Enhance Cash Flow, and Sleep Better at Night

by Tim Sernett, CPA

As an entrepreneur your primary focus is usually on marketing and production – find, fulfill and bill. However, a profitable (and valuable) business is one that produces consistent cash flow. An entrepreneur needs the support of a solid accounting and finance back office to keep a good handle on profitability and cash flow.

While an accounting back office is undeniably a cost center, it serves an extremely important purpose. At a basic level it’s there to support the owner with accurate, up-to-date information that is clear and useful. Unfortunately, many small business accounting departments struggle with even that basic function. When they do accomplish the basics they usually stop at simply providing the information, and fall woefully short of their real purpose – providing the entrepreneur with the know-how and expertise to analyze the accounting information so they can manage the business towards its financial goals.

Cash Is Key

For a small business to reach its financial goals cash flow is really the key. Business owners should base operating decisions on what’s best for cash flow. Cash is the name of the game for entrepreneurs – more cash and faster cash. No matter what the owners decide to do with cash – build working capital coffers, put more in their own pockets, put more into employees’ pockets, more into the retirement plan, or support a favorite charity – it always comes back to cash flow.

There’s an age-old tenet of business: what you measure you will mange, and what you manage you will improve. First, you’ve got to be clear on what to measure and manage. A solid accounting and finance function takes a look at the whole business to determine the key drivers of cash flow. Based on business goals and management needs, measurement tools (reports and key performance indicators) are designed and produced. Ideally, the management team should then take those reports and use them, however, they usually need to close support of the accounting group to give perspective and answer follow up questions. That’s great if you have the in-house experts what happens if you don’t?

Do It Yourself – Tough and Time Consuming

For many small businesses, in-house financial expertise is rare, and the capability for advanced analysis and interpretation is limited. Large companies have a CFO and a finance department with controllers, accountants and bookkeepers. Small businesses could also benefit from having these specialized departments, but obviously can’t afford that level of staffing. In most cases bookkeeping and accounting tasks are routinely included as another administrative duty for the office manager.

Without formal business finance education or mentorship, well-intentioned multi-tasking employees don’t understand the finer points of using financial information to run a successful business. The owner is too busy, the office manager isn’t trained to do it, and neither one has time or qualifications to determine financial data needs, necessary reporting, and analytical interpretation.

Outside Experts – Cost Effective, Much Higher Value

The whole value proposition of outsourcing in general holds true for outsourced accounting – lower variable overhead, no added HR issues, and a reduction of the business owner’s time involvement with non-core tasks. And perhaps the most important benefit is gaining the experience and expertise that is difficult to attain with internal resources.

Since it’s all they do outsourced accounting and bookkeeping firms have the resources, knowledge and expertise that can be trusted and deployed quickly and on demand.

Small business owners need good numbers every day to manage towards improved cash flow, higher profits and more stability. Get the insight and information you need today, so you can put plans in place for prosperity and growth in the years to come.

Are outsourced bookkeeping and accounting services for your company? Here are a few tips for evaluating your options:

  1. Make sure you’re interviewing firms that provide a comprehensive solution (e.g., bookkeeping, cash flow management, and financial reporting on actionable information.)
  2. Online access is essential so you have 24/7 access to the results and reporting.
  3. Make sure the outsourced accounting firm has proven and easy-to-use systems and tools to capture daily source information, manage the workflow, and provide as a close to real time reporting as possible.
  4. Look for firms that offer CFO-level expertise to help you understand what financial reports are important, how to read them and use them to improve the business.