Outsourced ecommerce accounting services are ideal for expanding small businesses. They provide a much-needed boon to companies with increasing needs without the proper resources to respond to those needs.
When a company grows, they require increased resources. However, if a company expands without allocating the right resources to the right place, growth can cause the company’s demise. Outsourced accounting services save businesses from becoming a casualty of their success. Continue reading to learn the pros and cons of outsourced accounting firm services.
Signs It’s Time to Switch to an Outsourced Accounting Firm
You struggle with taxes- Growing companies can’t afford to let their taxes slip. Outsourced accounting firms not only keep scaling companies compliant. They also issue advice on good investment opportunities and tax breaks.
Your current accounting solution doesn’t account for your needs- Your accountants should quickly adapt to your growing business. They should also be able to stay on top of the changing industry. Outsourced accounting firms offer fractionalized services, meaning these experts have ample experience in your field and know which solutions to implement for your company’s best results.
You’re spending too much time hiring and onboarding- As your business grows, so do your business needs. Accounting is a critical component of your business’s success. Your business can quickly expand and lose money. Additionally, when this happens, you might be tempted to focus on increasing your financial team.
Hiring and onboarding take a lot of time- time you could use to focus on your core business principles. If you notice you spend hours throughout the week interviewing and making sure you have the right hire in place, it might be time to outsource your financial services.
Pro: Fractionalized Experts
As previously discussed, one of the most beneficial aspects of outsourced accounting services is that these experts have experience with a wide array of industries. They will understand how to tailor a solution to your accounting needs. You won’t have to explain the ins and outs of your industry as you would with a job candidate who doesn’t have any experience handling your kind of finances.
Pro: Easily Scalable
As a small business, you have to pivot…a lot. One minute you may require three controllers and a CFO. The next quarter you may only need one controller to ensure your finances run smoothly. Outsourced accounting services don’t make you pay for things you don’t need.
If you hire an in-house accountant, there’s no telling whether they will be able to handle increased company demands. You might have to divert resources down the road to hiring additional employees that would be better spent elsewhere.
Pro: More Time for Core Business Functions
You can focus on your bottom line because you’re not concerned about hiring and scaling your financial management. You most likely didn’t get into business to crunch numbers and try to raise capital. You probably started your business to connect with customers and help people while making money.
When you use outsourced accounting services, you don’t waste time on compliance, and you don’t waste valuable company resources on hiring and onboarding financial experts.
Pro: More Cost-Effective
In the long run, outsourced accountants are more cost-effective because they can identify the most efficient and lucrative ways to run your financial operations. With a fractionalized CFO on your team,
Con: Hidden Cost
As with any service, hidden costs can occur. This happens most often due to tasks compiling and bleeding into other jobs. Be sure to choose an outsourced accounting firm that makes your payment plan clear. Set expectations upfront and don’t waver on them.
Pro: Proactive Approach
You’re not a trained financial professional, and thank God because that stuff gets tedious, and you want to focus on the fun stuff. You want to run the business, not deal with day-to-day things. Having an outsourced accounting team ensures that your business is proactive with its financial strategy. They can spot red flags and will notify you about expenditures and cash flow. There are very few things as freeing as having a set of expert eyes on your finances at all times. It will boost your confidence to make tough financial decisions.
Con: Less Control
The convenience of outsourced accounting services comes with a caveat. You can’t talk to Shirley in the next office and have her explain the tax code. You can call your controller or CFO with accounting services, but there’s something irreplicable about having someone in the office.
Handing over your books is scary. However, starting with an onboarding process that clearly defines roles and responsibilities will save you from some stress from outsourced accounting.
Con: Not Local
When you have an in-house accounting team, you can communicate with them more effectively. They can answer questions right away, and they can provide timely feedback. Having outsourced teams limits your ability and communication.
However, the right outsourced accounting team will provide you with a communication schedule, which defines when you can contact them and outlines their response times. When interviewing your outsourced accounting firm, make sure you understand when you can expect to hear from them and have them answer your questions.
Conclusion- The Pros and Cons of Accounting Firm Services
Deciding whether outsourced accounting services are suitable for your company comes down to your company’s needs. If you’re rapidly scaling and worried about growing too fast, outsourced accounting services can provide the stability you need for a fraction of the time and effort you would spend on an in-house accounting team.
There are a few drawbacks to outsourced accounting firms you tend to account for when deciding between using them or hiring an in-house team. You should make sure your accounting firm won’t include any hidden fees, and you should be clear in your communication. Failing to get this information upfront can result in detrimental consequences.
