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Journey with us to an imaginary condo complex in the big city. See that light on near the top at 2 am? That’s Alex, the CFO of an 8-person tech startup — buried in financial reports, payroll logistics, and a puzzle of tax documents. His small business is on the cusp of a big breakthrough, but the snowballing backlog of accounting tasks are taking up time that he’d rather be using to plan their next funding round.
Small business leaders and execs often find themselves caught in this financial paradox: the more their company grows, the more their strategic thinking gets buried under an avalanche of accounting tasks. Even with razor-sharp efficiency, there are only so many hours in the day.
Outsourcing accounting services can be a lifeline for overwhelmed CFOs and founders of small businesses. By partnering with specialized BPO providers, backlogged and growth-stage businesses can tap into expert knowledge, the latest accounting software, and streamlined processes that were once reserved for only the big corporations. In other words, if you’re wondering, “can accounting be outsourced?” the answer is a resounding yes.
Curious? You aren’t alone. About 37% of small businesses say they already outsource their accounting functions to a trusted third-party provider. As an experienced accounting services BPO provider, we at Enshored understand that outsourcing accounting services for small businesses isn’t a stopgap solution or passing trend — it’s a sustainable, scalable strategy that’s changing the way savvy startups manage their financials.
Outsourcing accounting services entails giving a range of financial management tasks to external professionals. But what does that mean for your small business?
Imagine having a team of financial experts at your beck and call to do everything from daily bookkeeping to financial analysis. That’s the power of accounting outsourcing.
Here are the top types of outsourced accounting services offered by BPO partners:
Virtual Bookkeeping
This is the core of outsourced accounting services. It includes recording financial transactions, reconciling accounts, and preparing financial statements such as balance sheets and income statements. Looking to outsource bookkeeping services for your small business? With virtual bookkeeping, your financial data is always up-to-date and accessible.
Accounts Payable and Transaction Management
Outsourced teams can manage your bills, make timely payments, and keep your cash flow healthy. They’ll track every financial transaction so you can see where your money is going.
Tax Preparation and Filing
Business taxes can be a nightmare. Outsourced providers often include tax preparation services, so you comply with legislation and get the tax breaks you’re entitled to.
Cash Flow Forecasting and Management
Cash flow is key to small business success. Outsourced accountants can provide regular cash flow forecasts so you can make informed decisions on spending and growth.
Virtual CFO Services
Some business process outsourcing (BPO) firms that offer accounting provide virtual CFO services, high-level financial strategy, and guidance typically reserved for big corporations.
But how is outsourcing different from having an in-house accounting team? For starters, outsourcing gives you access to a team of experts without the overhead of full-time salaries and benefits. You’re not just getting a bookkeeper; you’re getting a whole team of specialists in various aspects of business accounting.
Plus, outsourced accounting firms are up to date with the latest accounting software and industry best practices. They have experience working with multiple clients, which can help them spot trends and opportunities in your financial data.
One of the biggest advantages is scalability. As your small business grows, your accounting services can scale with you. Whether you’re dealing with more transactions or expanding into new markets, your outsourcing partner can adapt its services accordingly.
Consider the numbers: while an in-house accountant can cost upwards of $60,000 per year (plus benefits), outsourced accounting services can offer similar expertise for a fraction of the cost.
By outsourcing accounting services, small businesses can have the same level of financial expertise and tools as big companies. This levels the playing field so you can make data-driven decisions and focus on the core activities that drive growth.
You may feel like every decision is make or break, but typically, the benefits of outsourcing processes like accounting are huge. Let’s get into the advantages that make accounting outsourcing a smart move for growth-focused small businesses.
Big Cost Savings
One of the biggest reasons to outsource accounting services is the potential to save big by cutting the overhead of maintaining an in-house accounting team. By partnering with an outsourced accounting firm, you can get top-level financial expertise without the full-time salaries, benefits, or office space.
Think about it: according to some studies, companies can save up to 40% on labor costs by outsourcing accounting functions. That’s not pocket change – that’s a big reduction in expenses that can be redirected to core business growth.
Specialized Expertise
When you outsource, you can tap into a team of financial experts. Outsourced accounting firms stay up to date with the latest industry trends, tax laws, and best practices in financial reporting.
This expertise is especially valuable for firms navigating complex financial terrain. Whether it’s understanding cash flow management or preparing for an audit, your accounting team will have experience to draw on. That’s why 18% of small businesses outsource to get specialized skills they don’t have in-house.
Time to Focus on Core Business
Time is the most valuable resource for any small business owner or startup CFO. Outsourcing tasks frees up time that can be better spent on strategy, product development, or customer acquisition.
Better Accuracy
With dedicated teams focused on your financial data, you can expect more accurate financials, timely reporting, and fewer errors in critical processes like tax prep. Better accuracy doesn’t just look good on paper – it means better decision-making and smoother operations overall.
Scalability and Flexibility
As your small business grows, your accounting needs will, too. One of the biggest advantages of outsourcing accounting is the ability to scale up or down based on your current situation.
Whether you’re experiencing rapid growth or going through a lean period, your outsourced accounting team can adapt to your needs. This flexibility is especially valuable for start-ups with fluctuating demands.
Better Financial Insights
With an outsourced accounting team, you’re not just getting someone to do the numbers – you’re getting a partner in financial strategy. Many accounting outsourcing companies offer CFO services and provide high-level insights to help you make business decisions.
These insights can pay off. From finding cost savings to forecasting cash flow, your outsourced team can provide the financial intelligence needed to make informed decisions.
Access to Technology
Keeping up with the latest accounting software and technology is a full-time job in itself. When you outsource accounting services, you get access to the latest financial tools without the hassle of managing them yourself.
Many outsourced accounting firms use cloud-based solutions that integrate with other business tools you’re using, creating a more connected and efficient operational ecosystem. This technological edge can streamline your financials, improve collaboration, and provide deeper business insights.
Knowing when to outsource your accounting services is key to your small business’s growth and efficiency. As an accounting outsourcing service provider, here is when we usually recommend it’s time to outsource accounting:
Growth Has Been Rapid
If your small business is growing quickly, it’s time to outsource accounting tasks. Signs include:
For example, a company preparing for a big sales event like a product launch would benefit from the scalability of outsourced accounting.
Financial Processes are Becoming Too Complex
Consider outsourcing when:
You’re Facing Time Constraints and Opportunity Costs
Time is money, especially for small businesses. Outsource when:
Compliance and Regulatory Pressures are Piling Up
The accounting industry is always changing with new regulations and compliance requirements. Outsource when:
Business Fluctuates Seasonally
Many businesses have seasonal fluctuations. Consider outsourcing accounting services when:
Interestingly 24% of businesses say increased efficiency is their top reason for outsourcing. If you’re seeing inefficiencies in your financial processes, it’s time to look into outsourced accounting services.
To help you see what accounting services outsourcing would look like for you, let’s look at the example of GrowCo, a rapidly growing e-commerce platform for sustainable home goods.
GrowCo, like many start-ups, has been struggling to keep up with their financials. As sales have been growing, their in-house accounting team has found themselves drowning in:
And with plans to go international, GrowCo knows they need a scalable solution to manage their accounting functions — one that won’t sacrifice accuracy or compliance.
So, they reach out to an accounting outsourcing service provider like Enshored, who brings in a custom-built team of accountants to help GrowCo with their financial challenges. Here’s what a partner like Enshored can offer:
The Outcomes
Based on the work we’ve done with similar clients, a company like GrowCo could expect to see the following:
Here’s the point: outsourcing accounting helps businesses like GrowCo transform how they manage their financials. At Enshored, our expertise as an accounting outsourcing company — and our scalable solution — gives our clients the confidence to go big on growth, because they know their financials can keep up.
As we’ve seen throughout this post, having a BPO provider handle your accounting services outsourcing can be a big win for businesses looking to scale, be more efficient, and focus on their core.
The benefits are clear:
But remember, it isn’t just about these benefits. By outsourcing accounting services, small businesses are really seeking the strategic partner they’ve been missing The right outsourced accounting firm can bring valuable insights, navigate complex financials, and help your business grow.
In the end, it’s about freeing up your time and resources so you can focus on scaling your business to new heights. With a partner like Enshored, you’ll have what you need to do exactly that.
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