When And Why It's A Good Idea To Outsource Your Accounting

Starting a business is exciting, but managing finances can be overwhelming. As a small business owner, accounting may not be the most thrilling topic of conversation, but it's essential to the success of your business. You need accurate and timely accounting to keep your business afloat, and as your business grows, bookkeeping may no longer be sufficient.

Most bookkeepers can handle billing, collections, payroll, deposits, sales taxes, bank account reconciliation, and basic financial statements. However, when your business reaches a certain stage in its lifecycle, you need more than bookkeeping. You need management accounting. Management reporting is used to make data-based decisions backed by real-time data and key performance indicators.

The Triggers

Small business owners typically need to experience one or more triggers to consider outsourcing accounting, such as:

1. Reaching $1 million in revenue

2. Employing eight to ten people

3. Accepting outside investor capital

4. Entering the accelerated growth stage of the business lifecycle

5. Needing to get more out of QuickBooks than billing and collections

6. Wanting technology systems to interface and talk to each other

7. Or requiring more sophisticated financial reports for data-based decision-making.

Outsourcing accounting is a competitive advantage that allows business owners to be the best in class without any upfront investment of time or money. It's also a strategic advantage and has a positive effect on employees, a small business owner's number one asset.

Nonprofit Organizations

Nonprofit organizations experience similar triggers and milestones in their lifecycle that necessitate a new and improved accounting solution. Accurate financial reporting is a key factor influencing growth and survival in the nonprofit world. It's time to consider a new accounting solution when:

1. Revenues reach $500,000, mandating audits in many states

2. The Board of Directors requires more confidence in the financial reports

3. Programs are competing for limited funds and need ROI justification

4. Acquiring grants necessitates foundation reporting.

When your small business or nonprofit shows these signs, it's most likely ready to expand beyond a bookkeeper as your accounting department. As a CEO or executive director, you must make a decision on how to proceed with the accounting function. There are several options to choose from, each with its cost-value relationship.

The Ultimate?Cost-Value Relationship For Growth

Hiring a controller, turning to a traditional CPA, or a la carte outsourcing to different firms can all be viable options. However, outsourcing the bookkeeping and accounting to a Client Accounting Services (CAS) firm is often the best cost-value relationship for growing businesses and nonprofits. It's a great way to save money, improve core business focus, avoid the risk and costs of hiring more employees, and gain access to outside expertise that would be unaffordable otherwise.

In conclusion, outsourcing your business's accounting costs at least 30 percent less than building and maintaining an in-house accounting department. However, the true value of outsourcing is not just saving money. It's about improving your core business focus, avoiding risks and costs, and gaining access to outside expertise. So, when the time comes, don't be afraid to outsource your accounting needs and focus on what you do best.

How Wisewel Can Help You

At Wisewel, we don't just stop at bookkeeping and accounting. Our services extend beyond that, encompassing critical oversight and account management to guarantee the correct implementation of policies, procedures, and systems, along with accurate production of financial and management reports.

As a premier provider of outsourced bookkeeping, accounting, and controller services, we work with growing businesses and nonprofits. Our expertise lies in combining advanced QuickBooks accounting system design with a fractional share of a full-service accounting department that includes a dedicated team of bookkeepers, accountants, and controllers.

We also offer customized management reporting and key performance indicators (KPIs) to help small businesses and organizations make data-driven decisions that drive performance and profitability. If you would like to learn more about how we can help you, book a 30 minute discovery call with us by sending an email to [email protected].?

For comprehensive accounting solutions that take your business to the next level, Choose Wisewel!