To stay competitive in rapidly changing business climates, companies of all sizes and across all industries are constantly looking for new ways to cut costs, increase efficiency and ultimately boost profits. This is especially true for startup companies in the hyper-competitive innovation/technology space.
One tried-and-tested way of trimming fixed overhead costs is by outsourcing some of your company’s day-to-day operations that aren’t part of your primary capabilities. These can range from global manufacturing companies sending parts of their supply chains overseas, to outsourcing your payroll and HR functions. Outsourcing certain tasks goes a long way in helping organizations meet productivity goals, cut back on overhead costs, and ensure company employees are using their time and energy to focus on core competencies.
In this article, we’ll discuss the strategy of outsourcing your organization’s accounting team. In other words, we’ll discuss the advantages of working with a third-party outsourced accounting service provider in Detroit rather than hiring an accounting team.
1. You know everything is set up right
If you begin the startup by doing your own accounting and later decide to outsource it, you may have an information bottleneck or backlog that makes it more difficult or expensive to migrate your data. By contrast, if you begin by outsourcing your accounting to a professional firm, you can rest easy with the knowledge that your business financials will be set up correctly from the beginning using the best accounting software.
2. You’ll save time (and sanity)
Successful entrepreneurs should only do what only they can do. By leaning on outsourced accounting services to complete complex, time-consuming tasks like bookkeeping; transaction and tax return processing; auditing; and year-end financial reporting, businesses can save a significant amount of time. These tasks take hours upon hours of time to complete – hours you and your internal employees can spend focused on your company’s core competencies.
3. It allows you to focus on the core of your business.
The reason you started your business is where you should focus. Your passion is the foundation of your success. Why spend your time and effort on something you’re not an expert at? Let accounting experts in Detroit take care of everything regarding your accounting.
4. Professional legitimacy
Having a professional accountant taking care of your accounting will give you some legitimacy in front of key partners such as banks. This will be an advantage when time comes for you to ask for a loan. Showing the bank that your finances are well taken care of will definitely be a plus.
5. You start out with a scalable solution that can grow with your business
Outsourced accounting services are very flexible and scalable, which is something every startup appreciates. You can create a solution that works during your startup phase and then continue to expand services as your business grows, even if you need an outsourced CFO.
6. You avoid hiring and supporting an in-house finance team
Hiring more employees is expensive and time-consuming. If you decide to hire your own financial team, there will be lots of decisions to make: how many people should you hire to form the team? What sort of qualifications do you need to look for (and pay for)? And of course there’s the time it takes to train and manage each person. By outsourcing your accounting, you avoid all of these costs, and you don’t need to worry about a whole new set of problems if an employee leaves.
7. You gain better financial insight
In a study by CBInsights, “ran out of cash” and “pricing/cost issues” are top reasons that startups fail. Financial reporting ensures businesses are complying with industry standards and tax regulations – but, perhaps more importantly, access to accurate, real-time financial information helps business leaders make informed, big-picture decisions related to the company’s future.
Whether you’re applying for a hard-to-get small business loan or seeking funding from angel investors or venture capital firms, accurate and up-to-date bookkeeping, along with clear and insightful financial statements, could mean the difference between getting the money you need so your business can grow or having to call it quits very early in the game.
8. They understand tax.
Furthermore, as rules and regulations change on a regular basis, it is important to work with someone aware of these modifications. To make sure your business stays compliant, you should have a tax and outsourced accounting professional taking care of your finances.
The Bottom Line
Outsourced accounting and finance firms can provide an outsourced accounting professional or replace an entire department to help provide the experience, insights, and benefits hiring in-house employees without the costs of a full-time employee. That means you’ll have a highly-skilled financial professional in your corner at all times, ready to give you the counsel you need to grow your big idea into the company you’re envisioning.
Limitless Investment & Capital Professional Outsourced Accounting Services in Detroit
Limitless Investment and Capital is a top accounting firm serving Metro Detroit. Our skilled accountants and CPAs have years of experience working with startups and understand the financial data needed to grow your business. Contact our accounting experts in Detroit today to learn more about our services and special package offerings.