Boosting Your Startup: Smart Savings with Outsourced Accounting

The Financial Juggling Act in Startups

Tell me if you’ve heard this story before:

You’re part of a lean startup team and you have a title like COO/CFO or VP of Finance/Operations and although your title says you’re doing one task, you “wear many hats” and function as the team lead on a lot of other tasks too.  Not only are you spread pretty thin, but you also may not be the best person for each of those jobs.

Some of these jobs are important, but some of them are mission critical.  One of those mission critical tasks is accounting.  You think to yourself…

“It’s just accounting”

“I need to get this sort of right to help file my taxes at the end of the year.

“I can do this myself”

“I don’t need to hire anyone to come in and help”

There's more to managing your business finances than you might realize, and trying to handle accounting in your spare time could cause long-term issues. Before we explore this further, let's first understand what outsourced accounting means.

What is outsourced accounting?

We're talking about everything from basic bookkeeping (you know, making sure all those receipts actually add up) to more complex stuff like month-end close and tax prep. Outsourced accounting firms can even help with the big-picture stuff, like preparing financial statements and annual forecasts.

Why Consider Outsourced Accounting?

The startup money crunch

We understand running a startup is like trying to fuel a rocket with a limited tank of gas, every dollar counts, and financial decisions can make or break your business.  In-house accounting solutions often drain resources faster than expected because there isn’t flexibility to meet the variable needs of startup businesses.

 The Hidden Costs of DIY Accounting

I get it. You're thinking, "I can handle this accounting stuff. How hard can it be?" There's more to it than meets the eye. When you're burning the midnight oil, trying to reconcile those books after a long day of pitching to investors and managing your team, you're not just losing sleep - you're losing valuable time that could be spent growing your business.

DIY accounting isn't just a time sink. It's a risk. Without the right expertise, you're more likely to make mistakes. And in the world of finance, mistakes can be costly. We're talking potential audits, compliance issues, or even missing out on growth opportunities because you didn't have the full financial picture.

The Outsourced Advantage

There's got to be a better way?

Enter outsourced accounting!

Think about it. Instead of trying to be a jack-of-all-trades (and potentially a master of none), you get access to a team of experts who eat, sleep, and breathe accounting. These folks know their debits from their credits, and they're up-to-date on all the latest regulations. It's their job to be, after all.

But here's where it gets really interesting for startup folks. Outsourced accounting is scalable. Your startup's going to grow and your accounting needs are going to grow with it. With outsourced services, you can easily scale up or down as needed. No need to worry about hiring (or firing) in-house staff as your needs change.

But perhaps the biggest advantage? You get to focus on what you do best. Remember why you started or joined this company in the first place? I bet it wasn't because you were passionate about balance sheets or reconciling accounts. By delegating these tasks, you free up your time and mental energy to innovate, to lead, to do the things that only you can do for your company.

Show Me the Money: A Cost Comparison

I know what you're thinking. "This all sounds great, but what's it going to cost me?" Fair question.

Imagine you're hiring an in-house accountant. You're looking at a salary of anywhere from $70,000 to $120,000 per year, depending on experience. Don't forget to add in benefits, taxes, and other overhead costs.

Under outsourcing, costs can vary widely based on your needs, but many startups find they can get comprehensive accounting services starting as low as $4,000, up to $7,000 per month. That's $48,000 to $84,000 per year – about a third of the cost of a full-time employee.

That’s not all, remember those hidden costs of DIY accounting we talked about earlier? Late fees from missed deadlines, penalties from compliance issues, opportunities lost due to poor financial insights - these can add up to thousands, if not tens of thousands of dollars. With outsourced accounting, you're drastically reducing these risks because you’re dealing with professionals and you don’t have to worry about managing the process alone.

As a startup leader, your time is incredibly valuable.  How much is that worth to you?

Making the Leap

This all sounds great, but how do you actually make this happen?

First things first, take a good hard look at your accounting needs. What are you struggling with the most? Payroll? Tax prep? Financial forecasting? Understanding your business? Figure out where you need the most help. Then, start shopping around.

Look for firms that have experience working with startups in your industry. Ask for referrals, read reviews, do your homework. Remember, this firm is going to be handling your finances - you want to make sure they're the real deal.

Pro tip: you don't have to go all in right away. Start small. Outsource one or two key areas and see how it goes. As you start seeing results, you can gradually expand the services.  Many firms will be happy to do a pilot project with you, if you find one that doesn’t, look elsewhere.

And whatever you do, keep those lines of communication open. Make sure your outsourced team understands your business goals, your company culture, your vision. The more they know, the better they can serve you.

The Bottom Line (pun intended)

The idea of spending money on outsourced accounting might make you break out in a cold sweat. But here's the thing: sometimes you have to spend money to make money.

Outsourced accounting isn't just an expense - it's an investment. An investment in your time, in your peace of mind, and in the future of your company. It's about making smart choices that set you up for long-term success.

So, the next time you find yourself drowning in accounting work late at night, ask yourself: Is this really the best use of my time? Or could I be doing something more valuable for my business?

Remember, in the world of startups, it's not just about pinching pennies - it's about making every penny work harder for you. And that is exactly what outsourced accounting can help you do. For more details on outsourced accounting, we have created a comprehensive guide here.

Ready to Boost Your Startup's Financial Health?

At Zeroed-In Consulting, we're all about helping startups like yours thrive with expert outsourced accounting services.

·         Flexible monthly packages starting as low as $4,000.

·         Free 30-minute consultation to discuss your unique needs.

Don't let financial management slow you down. Let's chat about how we can help you focus on what really matters - growing your business.