9 Signs It’s Time To Outsource Your Finance & Accounting Functions

Finance & accounting is a very crucial function in every business. As a business owner, you would want to find out your expenses or how much income you are generating. These functions are not just done at the end of the year but throughout the year. It should be done in a meticulous and streamlined manner. It should be done with utmost care and accuracy. 

For startup businesses, it may be alright for you to be hands-on with the financial aspects of your business. However, as your business grows so will the complexity of the processes. Also, the tasks may become overwhelming for your team. They may often find themselves multi-tasking as they try to keep their expenses low and operations manageable. But you can spare your team from overwhelming themselves through outsourcing. 

But when it comes to finance & accounting, you may be having second thoughts about outsourcing the function. You would rather have an in-house team handle the financial aspects of your business. The downside is that you may be using an outdated accounting system that may be tracking financial records and transactions manually. However, in the long run, they may become bogged down with cumbersome manual processes that will hinder your business from growing. So read on and find out the reasons why you should outsource finance & accounting functions. 

Signs You Need To Outsource Finance & Accounting

  1. Your Time Is Being Consumed By Finance & Accounting Functions 
  2. You Are Experiencing Delays in Payroll & Accounting
  3. Your Company is Expanding Rapidly
  4. Your Books Are A Mess
  5. You Are Concerned About Data Security
  6. You Are Losing Money Even Though You’re Generating Revenue 
  7. You Struggle With Division of Labor 
  8. You Can’t Afford A Team  
  9. You Would Feel Unprepared If You Received an Audit 

Let’s go into the details. 

Signs You Need To Outsource Finance & Accounting

Finance & accounting is vital to your business operations. Without such a department, you would not be able to know how much money is going in and out of your company. But such functions can become daunting for your in-house team. If you are still pondering if outsourcing is feasible for your business, be aware of these signs for outsourcing finance & accounting.

1. Your Time Is Being Consumed By Finance & Accounting Functions

As a business owner, you ought to be working “in” the business rather than “on” it. In order to save up on costs, you may be forced to do the numbers crunching yourself. Even if you have some help, finance & accounting functions may keep you from focusing on your core business. You cannot force your in-house team to go double duty or their productivity will suffer. At the same time, you cannot designate the task to someone in your team who is not qualified or trained in accounting tasks or you run the risk of bookkeeping errors. 

This is what an outsourced professional can do for you. By delegating your finance & accounting functions to a third-party provider, you are partnering with someone who has studied and practiced the art of accounting. They will do the same work more efficiently and accurately. Accounting is a time-consuming task and you can easily get burned out. Outsourcing gives you access to a professional who can deal specifically with these tasks. 

By outsourcing, you are also giving your finance & accounting team a much-needed breather. They will have more free time to focus their energy on helping your business grow. This way, you can efficiently manage your tasks and focus on activities to increase their profitability. Outsourcing to a third party will help you lessen accounting mistakes which could lead to the downfall of your business.

2. You Are Experiencing Delays in Payroll & Accounting   

Processing payroll can be tough and making it an accurate process can even be tougher. If your business is still manually computing payroll, the discrepancies can be huge. If such problems are not addressed, this could lead to employee turnover. Incorrect or delayed payrolls can make employees feel underappreciated and undervalued. 65% of employees who do not feel recognized at work will more likely leave and take their skills somewhere else. 

Delays in payroll processing will not be a problem for you as a business owner but it will be for employees who rely on their paychecks. This becomes a problem if the one in charge of the payroll suddenly becomes absent during the payroll computation and there is no one else who can take over the role. Will the payroll process go to a grinding halt? If so, then you need outside help. 

If ignored for long periods of time, it will bring down the morale of your employees. Outsourcing your payroll functions will help ensure the timely release of salaries and wages of your employees. The outsourced professional will work with your payroll team to make sure that invoices and paychecks are always paid on time. This way, you won’t have to deal with angry clients and disgruntled employees. 

3. Your Company Is Expanding Rapidly 

Just because you are an entrepreneur does not mean you like accounting. However, you don’t want your business to fail because you did not accurately keep track of the numbers. As a business owner, it is your desire to see your business grow. In your desire to achieve this, you may be forced to take on too many roles which could be disastrous. When your business is expanding, your focus should be on running your company. 

By soliciting the help of an outsourcing company, the outsourced professional will not only report your financial situation but they will also dig deeper to determine why you are in your current spot. They will find ways you can increase your revenue and reduce costs. If you’re financially stable, they will help you devise a business strategy to stay that way. 

Business growth requires additional staff and integration of processes and controls. Outsourcing finance & accounting gives you the flexibility of scaling your accounting up or down as needed. Working with an outsourcing company will allow you to focus your energy on growing your company, increasing your revenue, boosting your brand image, strengthening your relationships with customers, and achieving your company goal.     

4. Your Books Are A Mess

Let’s face it, no one likes crunching numbers which is often the reason why they are often parked on the back burner. A study by SCORE Association revealed that 40%  of small business owners say that handling bookkeeping and taxes are the worst part of owning a business. But managing the financial aspects of your business can be time-consuming. In addition, you have the tax agency to worry about. 

Being trapped in mounds of invoices and receipts is a sure sign that your books are a mess. If you can;t even keep up with updating your accounting system, it means you need help. This is where you can bank on the help of an outsourcing provider. Bookkeeping isn’t fun but messy books can be costly as well. Small businesses launched in the US fail within the first five years due to poor financial management. 

The outsourcing provider will help keep track of your books and regularly update them for you. They will fix your incomplete or messy books so you can have an accurate record of your business expenses. It’s this additional oversight that could spell the difference between missing out on many deductions and paying more than you have to. As your business will be in expert hands, you can feel a great sense of relief. 

5. You Are Concerned About Data Security 

Data security should be a top priority. Did you know that your security is only as strong as the software you use and the network servers where it is stored? Failing to maintain high security levels can hurt your business and negatively impact your customers. Recent reports revealed that cyber attacks in the form of malware can cost organizations $2.6 million. Storing your account details on a less-than-secure server increases the risk of hackers accessing the system or worse using or selling your data. 

By working with an outsourcing company, you can look forward to getting secured data storage. They utilize the most updated encryption technology and software so you can have peace of mind. If you haven’t updated your accounting system yet, it’s time you let the professionals handle it. Outsourcing finance & accounting gives you access to more secured data. 

In addition, outsourcing helps reduce any risk of financial information being compromised. It will also help reduce overhead costs since you no longer need to invest in high-tech security and bookkeeping software. Cybercrime such as identity theft and fraud can be a huge concern and may cause problems for your business.

6. You Are Losing Money Even Though You Are Generating Revenue 

Okay, your gross profit is increasing but your net profit is dwindling. It isn’t a good sign and means maybe you ought to look for help from financial experts. Outsourcing providers do not just perform mundane bookkeeping tasks but also act as financial consultants. Increasing profit is a sign that your business is growing but you should not be losing money. 

If you notice that you’re losing money when you believe you should be making money, it’s time to get outside help. Outsourcing your finance & accounting functions can help bring the results that you need. The outsourcing provider can help create projections and help you plan your future with increased profits. 

As your business grows and evolves, chances are your finances will become more complicated. For instance, you might need more sophisticated financial modeling and reports that help you make sound business decisions about growth opportunities. By hiring an outsourcing provider, you get an opportunity to work with experts who might be adept at the complex financial system you are using. \

7. You Struggle with Division of Labor 

If you are having difficulty defining roles or delegating responsibilities, this could be an indication that it is time to outsource your accounting process. There are a lot of tasks involved in accounting so you need to make sure that your team is up to the task. If your business is growing, it’s normal that you will struggle with defining roles, creating operational procedures, and ensuring that all the right resources are in place. 

As your business grows, the need to improve your business processes becomes a necessity. Partnering with an outsourcing provider helps you clearly define procedures on how to complete accounting tasks. Outsourcing finance & accounting brings stability and thoroughness to your accounting department. 

Outsourcing can help you increase operational efficiencies. They can help automate your accounting system to boost your financial reporting. With a third-party provider, you can reduce mistakes due to human error and decrease the risk of fraud due to improved transparency and workflows.

8. You Can’t Afford A Team 

Maintaining an in-house accounting team has proven more costly than bringing in a freelance accountant. With an in-house team, you will have to worry about salaries as wages, benefits like health insurance, and allowances. Hiring a freelancer cost less than a full-time accountant, depending on the scope of their work. If you cannot afford to hire an in-house team, outsourcing is the best option if you want to save time and reduce costs. 

By outsourcing, you will also save the time and expense associated with recruiting, training, and managing additional employees. You will only have to worry about monthly fixed costs instead of variable costs. Hiring staff accountants and bookkeepers require a significant financial investment on your part. For this reason, CEOs and managers are forced to take on the accounting tasks themselves. 

Outsourcing will help ensure that your work is done efficiently while allowing your staff to focus on strategic efforts that can help grow your business. If you cannot allocate the required budget and resources for hiring and training an in-house team, outsourcing your finance & accounting functions can make sense. 

9. You Would Feel Unprepared If You Received An Audit 

If your finance and accounting process is disorganized, chances are your documents could go missing or information can be easily stolen or changed. This could leave you vulnerable to actions and penalties of the tax agency. You would never know when the tax agency would come knocking on your door? When that time comes, would you be ready when they asked for your business documents? 

By outsourcing, you will be confident that your tax documents will be in order when the tax agencies conduct an audit of your business. The outsourcing provider will store all your files in one secure location. This means that you can easily retrieve your financial information whenever you need it. Outsourcing eliminates your worries about handling audits. 

With outsourcing, gone are the days when you still need to search for files from several years ago. You won’t waste time searching for data. This way, you won’t equate an audit with stress and fear. 

Finance & accounting are crucial to the success of your business. It will give you an idea of whether or not your business is making a profit or none. As such, you cannot afford to make a mistake as it can prove detrimental to your business. Outsourcing finance & accounting can help you determine your financial status and also keep up with compliance. 

Get Back Office Support From airisX 

As an entrepreneur, it’s understandable to want to be hands-on with the management of your business. But as companies grow, many business owners find themselves overloaded with the non-core “hands on” tasks that distract them from the core business activities that actually grow their business. 

Outsourcing time consuming administrative and backend tasks such as data entry, cold calling, bookkeeping, HR, recruiting, etc. save you time (and money!) during your day, so you can focus on working “on” your business instead of working “in” your business. That’s where airisX comes in.

Leave the number crunching to us. Whether it’s keeping track of expenses, managing invoices, receipts, and consolidating bills, our accounting team has the experience and expertise in taking on your accounting and bookkeeping work, well versed in financial management software like Xero, Zoho, QuickBooks to keep your financial records in order.

Need help with your finance & accounting? Get in touch with one of our agents at contact@airisx.com for customized solutions to your financial concerns. 


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