Making the switch to outsourced accounting for your small business requires a lot of careful consideration. If you’re trying to decide if outsourcing is the best option for your business’s accounting, we can help you think it through by looking at the pros and cons.
More and more business owners are turning to outsourced accountants to handle their business’s finances as time goes on because, in addition to saving you money, it lets you focus on what your business needs to thrive rather than having to worry about the financing side of things. Business owners who utilize outsourced accounting also love the flexibility it offers in comparison to an in-house accountant.
It’s no surprise that so many business owners are deciding to outsource. What are some of the ways that outsourcing helps your business grow and run more smoothly?
1. Saves You Money
Outsourcing an accountant saves money because you don’t have to pay an in-house accountant to stay on your permanent staff. You can choose to bring an outsourced accountant in for what you need, so you pay according to the hours or tasks they perform for your business.
2. More Business-Efficient
As the owner of your business, you likely have more important things to do than sit down and work through taxes or billing documents. When you hire an outsourced accountant to handle these things for you, you can focus your time and attention on ways to grow your business and think ahead. It also lets you have an experienced accountant—or a whole team—who has your business’s best interest in mind and can help you decide what your next steps should be based on your current financial reports.
3. Reduced Risk of Fraud
When you hire only one in-house accountant to run the finances for your business, it’s easy for them to slip unauthorized purchases or fake expenses into the account without ever being caught. Since an outsourced accountant works through an agency, there will always be multiple people keeping an eye on your transactions at all times, making it much harder for any sort of fraud to go unnoticed.
Before making any decision, it’s critical to know what the downsides are, too. So what are some of the things that may not benefit your business when outsourcing your accounting?
1. Hidden Costs
Any time you’re paying someone else to do something for you, the possibility of hidden or forgotten costs is always present. You could lose track of just how much an outsourced accountant is doing for you and end up owing them more than you intended. This is avoidable, however, with a strong line of communication and clearly laid-out expectations between you and your outsourced accounting partner.
2. You Have Less Control
Another less-than-ideal result of outsourcing is that you are giving an aspect of your business over to the hands of someone else. It can be difficult to know that you aren’t overseeing everything that happens in your business’s financing. This, too, can be avoided when you pick an accounting partner that you feel is trustworthy enough to take charge of this part of your business.
Since you’re outsourcing, your accountant will not work in the same place as you. If you have a question for them, you won’t be able to step into another room and ask them in person. Of course, you will still have open communication with an outsourced accountant—the answer just may not come as quickly. But with regular finance reports and virtual meetings and messages, it can feel like an outsourced accountant is just as close as an in-house accountant.
Choose the Right Outsourced Accounting Firm
None of these cons have to be an issue if you have an open line of communication with a trustworthy team of outsourced accountants. Our goal at District Advisory is to give business owners like you personalized guidance through every step your business takes. Contact us today to meet the outsourced accounting partner that’s right for you.