As your business grows, business owners tend to rely on benchmarks to help guide their business strategies. Below are a few questions that usually trigger discussions on when to find new accounting solutions.
- Is your company close to or have surpassed $1,000,000 in revenue?
- Does your company have 10 or more employees?
- Is your company going to be accepting outside investment and/or capital infusion?
- As an owner/CEO, are you unable to be involved in every aspect of the business process?
- Is your company entering its growth stage and need to create a more lean and efficient business model?
- Does your company need someone on staff with an intuitive grasp/expertise specifically in accounting?
- Is your company’s strategy needing more sophisticated financial reporting and data driven insights?We find business owners with a “getting better” agenda, who are not happy with the status quo, often value outsourcing accounting as a way to quickly move up to management accounting. They see outsourcing as a competitive advantage that allows them to be best in class without any upfront investment of time or money.
If you answered, “yes” to any or all of the questions above, it is a good indicator that your company is going to either in serious need of an accounting specialist on-staff, or is needing accounting services to help put them on the path of accounting stability. As new technology have become integrated with the traditional service based industries, companies are embracing outsourcing as a legitimate strategy to keep internal resources focused on its core competencies. This lean model has transformed companies struggling to maintain success or sustain growth due to the inevitable burden of having to hire and retrain internal staff to handle administrative accounting tasks.
Upgrading Your Accounting
- Hire a CFO/Controller (make sure to check online for going rates for these personnel). These individuals can
- Turning to a traditional CPA (billing $175-$250 per hour)
- A la carte outsourcing to different firms (e.g. contracting with a billing and collections services firm and separately with a Value Added Reseller (VAR) to design and install accounting software
- Outsourcing the bookkeeping and accounting to a Client Accounting Services (CAS) firm to handle all accounting needs
While you may have the energy to investigate all these options, the rapid growth of Client Accounting Services is taking place because it is often the best cost-value relationship for growing businesses and nonprofits.
In terms of savings, outsourcing your business’s accounting costs at least 30 percent less than building and maintaining an in-house accounting department. However, the true value of outsourcing is not just saving money.
According to The Outsourcing Institute, businesses choose to outsource to improve their core business focus, to avoid the risk and costs of hiring more employees and to gain access to outside expertise that they could not afford otherwise.
Focus on Core Business
For most businesses and nonprofits accounting is not a core competency. Core competencies are those unique selling points, competitive advantages and senior management skills that are responsible for a business’s growth.
For organizations that believe in outsourcing, any function not related to your business’s core competency, which distracts employees and resources from making money, should be outsourced. Therefore, outsourcing accounting frees up management’s time to focus on the aspects of the business that drive sales and service and, ultimately, profitability.