Being a small business owner or a startup founder can be extremely rewarding. As an entrepreneur, you get to be your boss and have the freedom to make critical decisions for your business. Being involved in almost every aspect of the company, you can find plenty of learning opportunities to gain personal satisfaction. And while owning a business has a high financial risk, it gives you a chance to create a higher income than being employed by someone else.
Of course, if there are advantages, there are also some drawbacks to owning a small business or running a startup. When it comes to money, you need funding, often from various channels, to establish and continuously run the business. Also, you are worried about several components, such as paying the bills, managing employees, keeping customers, and remaining competitive. On top of that, you will also be wearing multiple hats and will most likely perform duties beyond your expertise.
To position your company toward success, you must be smart about using your limited resources (financial, time, and workforce), and you can achieve this through outsourcing. You can outsource several functions to a third-party provider, one of which is accounting.
With lack of funding and financial mismanagement being the top reasons small businesses fail, it makes sense for owners and founders to seek help tracking and managing their finances.
Benefits of Outsourced Accounting Services
1. You save more
Owners are hesitant to hire outsourced accounting services because they consider this an additional cost for their business. Although this is true, especially if you’re currently doing DIY accounting, hiring a reliable firm to take care of your business finances can save you money. For example, the outsourced team can help you reduce costs and maximise profitability.
Also, outsourcing accounting services is much cheaper than hiring an in-house accountant, as you don’t need to pay for the salary, benefits and other expenses that come with hiring a full-time employee.
2. You gain peace of mind
With so many things you have to take care of, the last thing you want to be anxious about is whether your business is compliant. Outsourcing your tax burden to a third-party firm lets you know that your company’s obligations are well taken care of, and you won’t get in trouble with the ATO.
3. You don’t need to worry about payroll
If you run a small business or a startup with a couple of employees, writing cheques every payday takes a chunk of your valuable time. Outsourcing payroll to an accounting firm will take the stress off your shoulders, so you don’t need to worry about problems with arranging pay for your staff.
4. You get reliable cash flow projections
Cash flow management is one of the most crucial aspects of running a business. And it would help if you had a reliable cash flow forecast to prevent potential issues such as cash shortfalls.
With an outsourced accounting firm on your team, you can rely on them to help you generate credible cash flow forecasts to give you a clear picture of how your organisation is doing in terms of the money going in and out of business.
Related: Tips and Tricks on Cash Flow Forecasting
5. Generate timely reports
Besides your cash flow statement, there are other critical reports that you should monitor, such as your profit and loss and balance sheet. Outsourced accounting experts will help ensure that these reports are timely and updated.
With this data, you can better understand how your business is performing, and you could use these reports as a tool when making important decisions.
6. You can focus on business growth
Managing your company’s finances is vital in running a business; however, essential tasks like bookkeeping can take a back seat. Outsourcing bookkeeping and other accounting functions to a numbers expert will give you more hours to focus on growing and improving your business.
7. You have access to professional advice
Working with a reputable outsourced accounting firm gives you access to valuable insights and knowledge from experienced finance professionals. A virtual CFO, for example, can help you understand what your numbers are telling you, point out areas of concern, and suggest actions to take.
To sum up, there are significant advantages if you outsource accounting services for your small business or startup. It is more cost-effective than hiring someone full-time; more importantly, you’ll be more efficient in managing and monitoring your finances.
Cloud CFO offers end-to-end accounting solutions, supporting your business where needed most. If you want to know how we can help and how you can enjoy the benefits we mentioned above, don’t hesitate to reach out to us at info@cloudcfo.com.au.