For lots of really good reasons, many small companies start off doing their bookkeeping and accounting themselves. Yet as business picks up and the company grows, that approach becomes less and less viable. So how do you know when you’ve reached the tipping point, where turning to the pros makes more sense and you’ll get a good return on your investment? Here are some signs to watch for.
You notice errors in your company bookkeeping
The biggest sign that your accounting processes are in need of an upgrade is a lack of consistency and reliability. Are there errors in reporting? Do your books close late? Have your employees complained about discrepancies in payroll? Are you ever unsure whether to trust the numbers you’re looking at? One of the advantages of outsourced bookkeeping and accounting is that you’re tapping into a team of experts working in well-defined processes that are designed to foster efficiency and catch errors.
Your business volume places heavier demand on accounting
How much business do you need to be doing before outsourced bookkeeping is a good investment? Of course the question is more complicated, because each business is unique and the demands vary from industry to industry, but our experience has shown us that $500k in annual revenue or expenses is a sweet spot for starting to leverage outsourced bookkeeping and accounting services. At that level, accounting, payroll, and HR have become large enough to require significant inputs of time from someone and are often complex enough to justify bringing in third-party expertise.
Your office space is limited
Paper files are cumbersome, and real estate isn’t cheap. Many businesses struggle to find the physical space to house their bookkeeping paperwork, often resorting to dumping papers in dusty file cabinets that are nearly impossible to search through.
Of course, some paperwork may need to be kept in-house for the sake of regulatory compliance, but not all business owners (you know who you are) have this limitation. In these cases, outsourced bookkeeping and accounting can be a great way to free yourself of the burden of paper storage and place documents where they’ll be searchable and secure.
Your accounting just isn’t fast enough
At its core, outsourced accounting is all about efficiency. Third-party accounting professionals have spent years refining their workflows across payroll management, A/P, invoicing, reconciliations, and more. There are no modules out there that a quality outsourced accounting provider can’t manage. That can save you incalculable amounts of time and hassle.
The upside of outsourcing your accounting
At the end of the day, business owners must ask themselves whether they’re truly in control of their bookkeeping and accounting, remembering that the absence of problems doesn’t mean things are fine. Even if your in-house accounting is error-free and you aren’t burdened by excessive paper filing, the increased efficiency of outsourced accounting alone makes it a worthwhile option to consider.
If you’re interested in learning whether outsourced accounting is a good fit for your business, contact us today to learn more.