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Managing the financial aspects of a small business is often one of the most challenging parts of running a company. From bookkeeping to taxes, payroll to financial analysis, keeping track of everything can quickly become overwhelming. For many small business owners, this means long hours spent on accounting tasks that detract from their ability to focus on growth and customer service.
But there’s a solution: hiring an outsourced accounting company. This option allows small businesses to access expert financial management at a fraction of the cost of in-house staff. Let’s delve into the top 10 benefits of hiring an outsourced accounting firm and why it could be the right move for your business.
Top 10 benefits of hiring an outsourced accounting company
Here are the top 10 benefits of hiring an outsourced accounting firm:
Cost-Effective Solution
Hiring an in-house accountant comes with significant expenses beyond just a salary. According to a 2024 survey by Glassdoor, the average base salary for a full-time accountant in the U.S. is around $74,017 annually. Factor in benefits, bonuses, training, and office space, and the costs quickly rise. Outsourcing your accounting allows you to pay only for the specific services you need, cutting down unnecessary overhead costs. In contrast, outsourcing your accounting can cost between $18,000 and $24,000 annually, depending on the services you require.
For example, if your business only needs monthly bookkeeping and quarterly financial reviews, you won’t pay for a full-time accountant during slower periods. This flexibility helps small businesses allocate resources more efficiently.
Access to Experienced Professionals
When you outsource, you’re not just hiring a single person but gaining access to an entire team of accounting experts. Many outsourced accounting firms employ certified public accountants (CPAs) and professionals with experience in various industries. They stay up-to-date with the latest tax laws, regulations, and accounting practices, so your business benefits from high-level expertise without paying top-dollar salaries.
According to IBISWorld reports, outsourcing accounting firms have significantly boosted their investments in training and certifications, providing clients with access to advanced expertise.
Improved Efficiency and Focus
A major benefit of hiring an outsourcing firm is the time it saves. According to a survey by SCORE, small business owners spend an average of 39% of their working hours weekly. That’s valuable time that could be spent on growing your business or improving customer relations.
For instance, imagine you run a growing e-commerce business. You could spend hours each week reconciling accounts and managing payroll or outsource these tasks and dedicate your time to enhancing your product offerings or marketing strategy. Outsourcing your accounting allows you to reclaim that time and improve overall productivity.
Scalability
Your accounting needs to evolve as your business grows. During the early stages, you might only require basic bookkeeping services, but as you expand, you’ll need more comprehensive financial management, including payroll, tax preparation, and financial analysis. Outsourced accounting companies are flexible and scalable, meaning they can adapt to your growing needs without the hassle of hiring additional staff.
For example, if your business experiences seasonal fluctuations, you can scale the accounting services up or down depending on your needs at any given time. This ensures you’re always working with the right level of service and expertise, without overspending.
Access to Advanced Technology
The top 10 benefits of hiring outsourced accounting services also include access to cutting-edge technology. Many outsourced accounting firms use advanced accounting software like QuickBooks, Xero, and Sage, giving you access to cloud-based solutions that streamline processes and improve accuracy. These platforms offer real-time financial data, detailed reporting, and insights that can help you make better business decisions.
Additionally, many of these software platforms integrate with other business tools, such as inventory management or customer relationship management (CRM) systems, allowing for seamless financial operations across the board.
Tip: If you’re currently using spreadsheets or outdated accounting methods, switching to an outsourced firm that leverages modern software can greatly improve the accuracy of your records and provide you with faster access to financial data.
Reduced Risk of Errors
Financial errors can lead to costly penalties, cash flow issues, and reputational damage. According to a report by the IRS, small businesses make over 80% of tax errors due to improper record-keeping or misunderstanding tax regulations. Outsourcing minimizes this risk by relying on professionals who are well-versed in accounting standards, ensuring that your books are accurate and compliant with the latest laws.
In addition, most outsourced accounting firms have internal review processes to catch and correct errors before they become problems. For example, if an outsourced firm manages your payroll, they’ll ensure that taxes are withheld correctly, reducing the chance of penalties or employee dissatisfaction.
Tax Compliance and Planning
Staying on top of tax obligations is one of the biggest challenges for small businesses. Outsourced accounting firms not only help ensure compliance with current tax laws but also provide proactive tax planning strategies. They can help identify deductions, credits, and tax-saving opportunities you may not have considered, ultimately reducing your overall tax liability.
For example, according to a report by the National Federation of Independent Business (NFIB), many small businesses overlook tax credits like the Work Opportunity Tax Credit or deductions for home office expenses. An experienced outsourced accounting team can ensure you take full advantage of these opportunities.
Expert Tip: Partner with an outsourced accountant who specializes in tax planning. They can help you develop a strategy that reduces your tax burden while keeping you compliant with state and federal laws.
Improved Financial Decision-Making
Accurate financial data is critical for making sound business decisions. Outsourced accountants can provide you with detailed financial reports that give you a clearer picture of your company’s financial health. This can include profit-and-loss statements, cash flow reports, balance sheets, and financial forecasting.
With these insights, you’ll be able to make informed decisions about where to allocate resources, when to invest in new equipment, and how to manage your budget effectively. Outsourcing also provides regular financial analysis, so you’re always aware of your company’s performance.
Example: A small retail business could use financial forecasting from an outsourced accounting firm to decide when to launch new product lines or hire additional staff based on cash flow projections.
Focus on Core Business Activities
By outsourcing non-core tasks like accounting, small business owners can focus on the activities that generate revenue and contribute to growth. Instead of worrying about bookkeeping, tax filings, and payroll management, you can focus on improving your product or service, developing marketing strategies, and providing exceptional customer experiences.
This increased focus on core business activities can lead to improved efficiency and growth. Studies show that businesses that delegate non-core functions to specialists tend to perform better in their core areas than those that attempt to manage everything in-house.
Increased Flexibility and Control
Outsourcing accounting doesn’t mean giving up control of your finances. Instead, it provides you with more flexibility and oversight. Most outsourced accounting firms offer tailored service packages that allow you to choose the services you need when you need them. This ensures that your business remains agile and responsive to changing financial needs.
You can still maintain full access to your financial data through cloud-based platforms, giving you complete visibility while relying on experts to handle day-to-day tasks. The increased flexibility means you can scale services up or down as your business evolves, ensuring you only pay for what you need.
Conclusion
Hiring an outsourced accounting company for your small business can be a game-changer. It offers numerous advantages, from cost savings and improved efficiency to access to expert knowledge and advanced technology. Outsourcing allows you to focus on what you do best while leaving the complexities of accounting to the professionals.
By outsourcing your accounting, you reduce the risk of errors, ensure tax compliance, and improve your financial decision-making. Most importantly, it gives you the freedom to focus on growing your business and achieving long-term success.
If you’re a small business owner looking to improve efficiency, reduce stress, and gain better control over your finances, outsourcing your accounting might be the perfect solution. At Intellgus, we specialize in helping businesses like yours streamline their financial processes with expert accounting services. Let us handle the numbers while you focus on growing your business. Get in touch today for a free consultation and see how we can make a difference!