In the initial stages of starting a business, most owners find it exciting to do all the work themselves. Later, when the client base expands, they do not find the time, or are short on resources to take care of accounting and bookkeeping in-house. In fact, most of them consider it a cumbersome process that uses much of their daily and monthly schedule. Time spent on taxes and payroll accounts may also increase as the company grows. The downside is that if it’s not done right, it creates auditing and bookkeeping compliance issues. A cost-effective and efficient way to overcome in-house accounting and bookkeeping problems is outsourcing.
Let’s look at four indicators that warn you when it’s time to outsource your accounting and bookkeeping tasks.
- Time Intensive
As a business grows, accounting and bookkeeping become a strain on the owner’s time and focus. When 25 % of your time is spent solely on bookkeeping activities, it’s a sign that it’s time to outsource them to an external agency. Outsourcing helps refocus your energies on core business activities that can drive better returns.
- High Cost
When you are a new business owner, every penny that you spend matters. If the current spending on your accounting is burning a hole in your pocket, then it’s time to move it to a professional group. Many small business owners think that they save money by performing bookkeeping themselves. However, reports say that if you spend 25% of your time on this activity, it amounts to over $800 per month. Outsourcing also provides the benefits of saving money that goes into purchasing accounting software, periodic professional consultations, and more.
- Audit & Compliance Requirements
Business tax returns have to be filed meticulously to avoid being pulled up by the auditors. If you are worried about year-end audits and how the compliance requirements will be met within the given timeframe, then outsourcing is the answer. A professional firm can ensure you pay less taxes, and that audits are conducted without any issues. Another important reason is that tax laws are constantly changing, and it is not possible to constantly keep an eye on them throughout the year with a hectic work schedule.
- Scalability for Business Growth
This could be the most important reason for you to start outsourcing your accounting and bookkeeping tasks. When you’re scaling your business, these tasks can hinder you from focusing your energies on new opportunities. Moreover, in-house bookkeeping can be a costly affair. And most often, it does not scale very well which necessitates hiring another bookkeeper. This ultimately increases the cost factor of your accounting.
Outsourcing accounting and bookkeeping services when you encounter any of these four indicators can ensure that you have adequate time to spend on your core business activities. It also ensures that you receive accurate financial reports on a regular basis, and guarantees compliance with various financial regulations. Since accurate bookkeeping is imperative to maintain a small-to-medium business, working with a qualified partner is often the best choice when accounting is not your core skillset.
If any of these four indicators are affecting your business, SmartFin can be of assistance. Since 2004, we have been in the business of providing impeccable end-to-end accounting and bookkeeping services. With SmartFin in the background, you can scale growth while your accounting is taken care of by experts. Take a look at the SmartFin advantage, and if you’re interested drop us a line and we’ll be glad to help.