Are you an entrepreneur just learning which services your startup will need to run your business more smoothly? The trend today is to outsource many of the tasks not related to your company’s core competency – that is, the activity that will ultimately drive revenue and grow your company, the reason you started your business in the first place. Outsourced accounting services for startups may make your life easier and help you be smarter about scaling.
Entrepreneurs often juggle many responsibilities, including keeping track of their finances. Startup or not, nearly half of small businesses don’t employ an accountant or a bookkeeper. At some point, however, it may be more productive for an entrepreneur to use outsourced accounting services for startups and free up their time to focus on running their business. At what point does outsourcing your accounting become more productive than managing it in-house?
What functions does an accountant fill at a startup?
Accounting encompasses more than payroll, payments, and taxes. Some additional responsibilities of your accountant include creating financial forecasts, helping you to choose a business structure, providing insight on cash flow management, creating financial forecasts and budgets and more. The right outsourced accounting services for startups will help you make decisions about how to direct investment and grow their business. Whenever you have a question about your business, your accountant will act as your right-hand man and answer anything you’re worried about. Having this expert knowledge can help your startup make better business decisions and accelerate growth.
When to hire outsourced accounting services
According to GrowthForce, most businesses wait to achieve certain milestones before they outsource their accounting.
For example, it is common for startups to hire an accountant when the following happens:
- Employ 8 to 10 people
- Earn $1 million in revenue
- Accept outside investment capital
- Experience accelerated growth
Should your startup wait to hit one of these milestones? While it may be tempting to wait until you have free resources to invest in accounting, using outsourced accounting services in the early growth stages can save you and your business valuable time. This, in turn, allows your company to dedicate more efforts to business growth and finding problems to everyday challenges.
Benefits for Startups using Outsourced Accounting Services
Besides the time you’ll get back by not doing the accounting yourself or the resources your company will save by dodging another costly hire, here are the key ways outsourcing your accounting gives you a major advantages
1.Guidance with Spending
During periods of growth, you’re going to spend money like crazy to survive, and you will have to constantly decide what to prioritize. Without solid financial insights to guide you, your decisions will be based on feelings and assumptions rather than facts. This can be extremely dangerous for your startup.
2. Show investors, they can depend on you
Any investor is going to feel vulnerable when they invest in your startup. At this point, you may have shown your potential, which may be enough for them to believe in your idea. But they’ll still want to see you’re thinking ahead, anticipating obstacles that could stand in the way of your success and getting them a solid ROI.
3. Outsourced accounting services can anticipate your roadblocks and opportunities
With all that experience under your accountant’s belt, he or she will seem to have an uncanny ability to predict potential issues you may have never even heard of or would be likely to overlook. This includes being one step ahead of your investor’s potential questions and arming you with the information they’ll need to invest in you. Being prepared for potential threats to your startup is essential to your company’s survival.
4. Help you determine your burn rate
Do you know your company’s burn rate? This is, in short, how much money you are spending and how long, if you continue spending at that rate, you’ll be able to stay in business. This is important to know, especially if you’re a tech startup or another early-stage company with a long lead time before you’ll start generating revenue from sales.
Can It Work for Your Company?
Outsourcing your company accounting needs to a professional firm may be a great way to deal with increasing expenses and to reduce costs on the operational process. If you think whether or not it will work for your company, it probably will! Not just the startups, but the established firms are also considering to transfer their accounting management to the outsourcing service companies to grow their businesses and make smarter decisions.
Starting at the early stage will support your company’s financial health and serve as a strong foundation for your business growth.
Final Thoughts
The earlier a startup can outsource its accounting, the better their chances of success. Doing so during the pre-launch or early stages of your business will help you to increase profits and ensure the best possible opportunity for your company to thrive.
Limitless Investment & Capital’s Outsourced Accounting Services for Startups
Keeping accurate and timely financials is crucial to the success of any company, regardless of size. For startups, the stakes are often much higher, and bearing the cost of a fully staffed accounting department is often unrealistic. Why not outsource this expertise to an experienced team of accountants committed to your long-term success?
Limitless Investment and Capital’s outsourced accounting services offer the kind of in-depth knowledge necessary to successfully execute monthly operations and reporting needs. It’s comprehensive. It’s flexible. And it scales at the pace of your business. Contact us TODAY!