Five Ways Outsourced Accounting Can Benefit Your Small Business

Small business owners in the modern day have a busy role and face many challenges, which is why so many turn to outsourced accounting services to maximize the efficiency, cost savings, and productivity of their businesses. From dealing with customers and employees to purchasing, inventory, and marketing, small businesses have their work cut out for them in an increasingly regulated environment.

One of the best ways to free up your time and enable more informed business decisions with the existing resources you have is to use the services of a dedicated outsourced accounting team. For those who are new to this idea, you probably have many questions about how it works and the benefits it can bring to your business, cash flow, and overall quality of life. Outsourced accounting is one of the best professional services available for those who run a small business, and in this article we're going to examine the top five reasons why.

What Is Outsourced Accounting?

Before we get into the specific benefits that outsourced accounting can bring to your business, it's important to understand the basics of the process and what you will be outsourcing. Essentially, it boils down to managing your cash flow and what you do with the complicated accounting needs you have.

That's why accountants are such a critical part of any business. They ensure that you meet compliance regulations, legal requirements, and all government regulations, which means that you can focus on the parts of running a business that you have more expertise in. An outsourced accounting firm will often deal with your balance sheet, payroll coordination, expense reports, invoices, bill pay, and tax filing, among other services.

Top Five Benefits of Outsourced Accounting Services

People who run businesses have many skills and specialties and lots to focus on. You're responsible for your employee's incomes, your business's growth, and your customer's satisfaction. To do so, you must have industry expertise, business goals, and other key performance indicators of success.

However, there's another side to running a business too. The financial operations side that companies outsource often involves highly technical knowledge of government regulations, complicated paperwork, financial reporting, and other complex business accounting services. Trying to do this part of running a business yourself is not only inefficient, time-consuming, and difficult, but it can also lead to financial and legal liabilities for your business.

Most companies leave this accounting work to the experts so they can focus on growing and maintaining their business. Let's look at the top five reasons why outsourcing financial accounting work is a smart decision for any business owner to make.

Benefit #1: Outsourced Accounting is Cost Effective

There are only three real options for accounting services in a business: do it yourself, hire an in-house accountant, or outsource accounting services. Attempting to do it yourself can be risky, increase liabilities, and has major downsides like taking away a huge chunk of your valuable time. An in-house accounting team is usually prohibitively expensive for small businesses, leading to outsourced accounting being the most cost-effective choice by far.

Outsourced accounting services often offer a flexible pricing structure depending on your needs, which helps cut costs and save money. These pricing structures can even be a by-the-hour plan with no hidden fees, which keeps costs down to what you absolutely need and nothing else. For a growing business, there's no better way to gain efficiencies than by using the advisory services of an outsourced accounting team.

Benefit #2: More Accurate Financial Data

When you choose to outsource accounting, you can rest assured knowing that a team of expert accountants is taking care of all your business needs. One of the most important benefits of outsourced accounting services is that you can always rely on the job being done correctly the first time.

When you try and do your own bookkeeping or taxes without professional tax services, you risk running huge liabilities and making costly errors that can slow down your business, get you in trouble, and prevent you from fulfilling your other obligations. Knowing that you can always rely on accurate and correct financial reports will provide you with peace of mind and a more solid foundation to build your business accounting processes on.

Benefit #3: Access to Experts

It takes someone with accounting expertise and experience to keep a small business running. Outsourcing accounting will give you access to a dedicated team of experts with industry specialization, CFO services, professional bookkeeping software, the best accounting software available, and much more. Outsourcing bookkeeping and accounting services is an efficient and effective way to put those with expertise to work for you.

Outsourced accounting firms have a team of experts ready to help you at any time for a fraction of the cost of an in-house team. Not only that, but they have the best accounting functions, software, and controller services on the market today. One of the best reasons to use outsourced accounting is that it will talk your financial reporting and statements to the next level and help your company succeed with a truly professional-level accounting department.

Benefit #4: Lower Job Stress

Bookkeeping tasks and management reporting use complex accounting systems, and especially during tax season this can add a lot of stress to your life. One major benefit you will get from outsourcing accounting services is a weight off of your shoulders and a more stress-free life.

This will benefit you in many ways, and allow you to focus on areas of your life that are more relevant and important than a simple finance function. Making sure that all accounting financial statements are accurate are critical components of running a growing business, but if you allow someone else to handle these specific and highly-technical aspects of your business, you can focus on more important things in life. Whether this is growing your business or taking care of your family, the end result is that you will be more relaxed, refreshed, and ready to work hard when you need to.

Benefit #5: Reduced Fraud and Liabilities

When your accounting data is in the hands of just one or two people, it opens you up to the unfortunate reality of business accounting fraud. Whether it's through health insurance scams, accounting software hacks, fraudulent bookkeeping services, or any other accounting function that can be manipulated by bad actors, small businesses are actually at greater risk of being taken advantage of than larger ones and the owners should act accordingly.

Customized management reporting and outsourced bookkeeping services are one of the best ways to minimize your liabilities and risk of fraud. Using an outsourced accounting service with many eyes on your finances is a great way to make sure everything is done correctly and there are no financial improprieties that can catch up to you down the road. There will be better controls on the data and reporting, as well as more internal mechanisms to identify and flag potential fraud, abuse, or errors.

Grow Your Cash Flow

The bottom line of all businesses, no matter what size they are, is cash flow. From accounts receivable to accounts payable, at the end of the day the balance sheet being in the black instead of red is the most important function of CFO services and other financial functions.

Outsourcing accounting is one of the best ways a small business can streamline its accounting processes and take its cash flow to the next level. Whether it's the crack team of experts they will have available, better accounting software, or the pure experience of an accounting firm, there's really no better way to grow a business and keep your customer base happy.

An accounting firm is a critical part of any business for a reason. Without someone to manage and control your financial inflow and outflow, it's easy to make mistakes, get caught up in scams, and increase your financial and legal liabilities. It's also important to keep scalability in mind and ensure that your business can grow appropriately and quickly to meet rising demand and sales.

Accounting firms know just how to make sure that all of these technical requirements are met in a way that makes you secure and keeps your business running smoothly. When you have employees and customers depending on you, there's no room for mistakes or errors when it comes to finances. So, if you're running a small business it's important to understand that outsourcing your accounting needs is the number one way to keep your business profitable, growing steadily, and attracting new customers.