As a small business owner, you need to make sure your finances are in check at all times, especially when you’re trying to grow. One accounting misstep can cause severe repercussions. You may not always notice when your accounting is at risk. However, these warning signs will quickly tell you when you need to consider outsourced accounting solutions.
In this blog, we dive into the warning signs that you’ve outgrown your in-house accounting team. Choosing the right time to outsource is a big decision. Luckily, at Fully Accountable, we have a full-service team that scales to your business needs. If you find yourself stressing over your company’s financial health, it’s time to start releasing some of the financial slack.
Our team can serve businesses of all sizes, providing companies with the solution they need to succeed financially. Whether you simply need a controller for cash and inventory management, or you need more complex needs like a fractionalized CFO, we can accommodate your needs.
- You Find Yourself Strapped for Time Because You’re Busy With Accounting Tasks
As a business owner, accounting likely isn’t one of your core business procedures. If you find yourself dropping the ball in areas because you’re trying to keep up with your finances, it might be time to consider outsourcing your financial procedures.
You might find yourself struggling even if you have an in-house accountant. The reason for this is likely that your business has outgrown its infrastructure during a growth phase. Outgrowing your infrastructure means things that were working before might not work anymore and one of the areas of business that suffers is often your accounting department.
However, you can’t afford to let growth wind up hurting you. It’s a common occurrence- a business scales up too fast and its growth winds up causing its demise. Outsourced accounting can take the tedious accounting tasks off your hands, allowing you to focus on the basics of business forecasting, core business processes, and improving your bottom line.
- You Worry About Your Data Security
Your data security is only as strong as the digital bookkeeping software you use and the servers or networks where you store it. If you don’t know how to gauge your data security, how can you protect your data? Failing to secure your data doesn’t just hurt your bottom line. It puts your clients’ privacy at risk, an absolute no-no.
Additionally, hackers can access your system and use or sell your data. Outsourcing your accounting to a company can guarantee secure data storage. Outsourced accounting firms understand the most trusted software and they will stake their reputation on protecting your data. These companies can’t function without the ability to protect their clients’ data.
Reputable outsourced accounting firms use updated encryption technology and software to ensure your peace of mind. They secure your data and also reduce overhead costs because you won’t have to invest in data protection software.
- You Have Delays in Payroll and Accounting
Here’s a scenario: your accountant takes a vacation, and suddenly, your payroll functions turn into Bedlam. It might be time to consider outsourcing your accounting department. You can’t afford for payroll to crash. You have employees depending on you for their well-being and mortgage payments.
These cases don’t necessarily mean you have to outsource all of your accounting procedures. You might only need to outsource some remote accounting functions as needed. You simply need to ensure your accounting and payroll complete all of your invoices and paycheck responsibilities on time. Even a few payroll mishaps can irrevocably affect your reputation.
You don’t want to lose the reputation you’ve built to something easily avoided like a payroll mistake. Outsourced accounting firms give you the peace of mind that your payroll is always in good hands, even if your in-house accountant is out of the office.
- You Would Feel Unprepared if You Received an Audit
Would you feel confident if the IRS started knocking on your door? Would you be able to provide all of the documents in a timely fashion, making the process as easy on your business as possible? If the thought of the IRS strikes fear into your heart, you might want to consider outsourcing your accounting.
You should feel confident that your tax documents are in order. If documents go missing, information gets stolen easily and the IRS is quick to impose penalties and fines.
Outsourcing your accounting and payroll ensures all of your data gets stored in one, secure location. Many outsourced accounting firms use cloud-based storage, which means you can retrieve your financial information from anywhere with an internet connection. Outsourcing these responsibilities eliminates your worries about handling audits.
You won’t need to search for files from several years ago, meaning you won’t waste time looking for financial information and you won’t have to equate audits with stress and dread.
- Your Business Is in Scaling Mode
Most business owners desire growth. For you, increased financial freedom equals increased personal freedom. More time with the family, more vacations, who wouldn’t want more freedom? However, growing businesses can easily lose money and wind up being more of a hassle rather than a source of liberation.
When your business starts to scale, you need to be prepared. You shouldn’t try to take on too many roles when your business is in a growth model. You need to focus on running your company during this time rather than basic accounting tasks.
Outsourced accounting services free you to focus on operations, advertising, and expanding your brand’s reach. They keep you focused on your company’s financial goals while removing some of the financial clutter that can cloud your vision during growth periods.
- You’re Losing Money Even Though You’re Generating Revenue
If you increase your gross profit, but your net profit continues to dwindle, it’s time to look for help from financial experts. Outsourced accounting firms don’t merely perform mundane bookkeeping tasks. They act as fractionalized CFOs who offer specialized financial consulting based on your respective industry.
Growth should lead to increased profits. It shouldn’t wind up causing you to lose money. If you notice you’re losing money when you believe you should be making money, it’s time to switch things up and try something different. Outsourced accounting can bring you the results you need.
You might have everything in place- a sustainable business model, the right product, the right clientele. But if you don’t have the right financial team in place, you won’t be able to turn a consistent profit. Outsourced accounting teams issue projections and can help you plan for a future with increased profits.
- You Struggle With Division of Labor
If you have difficulty clearly defining roles or delegating responsibilities, it might be best to outsource your accounting procedures. A lot of processes comprise your accounting department and you need to make sure your team can fulfill these responsibilities.
Struggling to define these roles, create operational procedures, and making sure you have all the right resources in place is a natural byproduct of scaling your business. If you find yourself struggling to stay on top of these factors, outsourcing your accounting can be the best decision.
- Needing More Defined Processes
While you scale, improving your business processes is another necessity of accounting. If you notice your business doesn’t have clearly defined procedures for how to complete accounting tasks while staying compliant, enlisting the help of outsourced services is the best course of action.
You can’t afford to expose your business to potential fines and penalties imposed by the IRS. Using an outsourced accounting service can bring the stability and thoroughness you need to your accounting department.
Conclusion- 8 Warning Signs Your Business Needs Outsourced Accounting
If you find yourself struggling with these business aspects, it’s time to consider a proactive solution. You don’t want to spin your wheels and avoid responding to your problems–this only makes them worse. With progress comes strife, and if you ignore these problems, progress becomes more challenging than it needs to be.
You started your business to reach people with your products and services and gain freedom. Chances are, you didn’t start it to crunch numbers and worry about financials (that’s what we’re here for).
When you partner with Fully Accountable, you ensure your business always stays on top of your accounting necessities. From our bookkeeping services to our fractional CFO services, we have something for businesses of all sizes.
Contact us today to learn what we can do for your business.