Outsourced Accounts & Bookkeeping: Why Small & Medium Businesses should Ditch DIY Approach
With the world economies slowing down and markets becoming increasingly volatile, business spheres have become fiercely competitive. This scenario has made it imperative for the enterprises to focus intently on their core competencies and augment their deliverables, efficiently. Deviation from core activities often results into losing out lucrative opportunities. Apparently this has resulted into increased account outsourcing. Enterprises usually outsource their non-core, yet extremely important tasks like account management and bookkeeping to a qualified and skilled third party solution provider.
However, this practice is still not common among small and medium size entrepreneurs. A majority of them mostly prefer to handle every business process, even account management, bookkeeping and payrolls; all by themselves. These often deviates them from their core expertise, resulting in losing out various business opportunities. Moreover, handling accounts and bookkeeping, without any expert intervention, makes it difficult to get a clear picture of where the company is headed and how far will it go down the road.
It is completely unacceptable to spend (valuable) productive hours trying to handle accounts and bookkeeping. DIY approach, here would not yield any efficient deliverables, instead it will lead your business to poor financial management and sometimes to heavy penalties by regulatory bodies. You would not believe but, outsourcing accounting & bookkeeping helps you to stay in IRS good books.
Benefits When you ditch DIY Approach & Adopt Account Outsourcing:
1. When accounting is not your core business activity
You might be an expert designer, web developer, architect or an engineer, but that does not make you an expert at accounts, bookkeeping and overall financial matters. In fact, accounts and other financial management does not fall in your core area of expertise. Therefore, the roll-up-your sleeve attitude might not work. It is always advisable to hire an outsourcing partner and outsource your work to a skilled and expert solution provider. Accounting, being their core expertise, they have the necessary experience and technology to deal with complex tasks.
2. Your time is worth more than just taking care of accounts
It comes naturally to a small business owner to handle all the business operations on their own. However, it is mere waste of time, since you can easily devote more time and resources to concentrate on core functions and general business development. When you partner the best accounts and bookkeeping outsourcing firm, you will have ample room to take care of your core business activities.
3. Accounting mistakes can cost a lot!
Besides valuable time, accounting errors can cost your company, in form of heavy penalties. Accounting mistakes sometime are really trivial, silly and frustrating; i.e., balance sheets not tallying. While sometimes, these errors are huge and expensive in nature, for example poor payroll management exposes to threat of getting penalized by Federal government. Being in a stage when your business is taking baby steps, it is not affordable to get penalized or lose a substantial amount of finances. Therefore, DIY approach is not recommended at all! Also are you aware of all accounting rules and regulations being followed across states? In order to stay compliant to norms in the US, you certainly need help. You might be aware of the norms applicable for your state, but what about the vendors from other states that you have to coordinate with while purchasing or selling goods or services to them?
4. DIY approach – You are depriving your business of expert help
As mentioned above, you may be good at what you do, but this does not imply that you will even be able to handle tricky and complicated accounts management. You need experts who can understand the intricacies of finances and accounts. When you opt to not to partner with these outsourcing firms, you actually deprive your business of expert guidance.
5. Outsourcing accounting and bookkeeping services, does not incur heavy or additional costs
You are a novice in the market and have a lot of questions such as:
- How much does outsourcing accounts management to accounting and bookkeeping service providers cost?
- What is the hourly rate to hire a bookkeeper or hire an accountant?
- Approximate estimation of how much will it really cost for a long term bookkeeping service?
Cost has played a vital role in the decision making process, making it all the more necessary to consider all the required aspects. This also includes the limitation your financial budgets might have to accommodate the cost of outsourcing accounting and bookkeeping activities. However; it is noteworthy that outsourcing companies these days have no fixed pricing matrix and have really flexible operations. Most of the times, their pricing matrix depends on the level of complexity and the intricacy of the work that you want them to do.
Survival for small and medium size enterprises is a big challenge, since; they have to fight on all fronts on their own. Due to resource constraints, it becomes difficult for them to allot separate funds and manpower to take care of non-core, yet important tasks. These business owners should prefer outsourcing accounts management to reliable accounting and bookkeeping service providers.