Come on, we all know accounting doesn’t usually top the list of thrilling business topics. If you’re a business owner, chances are you’d much rather chat about your awesome products and services than dive into the world of debits and credits (unless, of course, you’re an accounting whiz like us!).

As a business owner, you’ve probably been super vigilant about expenses, realizing it’s crucial to keep costs in check. You might have even taken on the bookkeeping duties yourself using tools or peeked over your bookkeeper’s shoulder to stay on top of the financial game.

Why, you ask? Well, savvy business owners understand that precise and prompt accounting isn’t just something you reluctantly check off the list—it’s absolutely essential for keeping your business sailing smoothly.

Outgrowing Bookkeeping

Yet, as the business grows, many owners discover that their time is better spent elsewhere. Those precious hours in the day are best utilized for nurturing the heart of the business rather than micromanaging daily bookkeeping tasks.

When a business owner can’t juggle every single aspect anymore, that’s when the business demands more than just bookkeeping. The majority of bookkeepers are proficient in handling bank account reconciliation, payroll, deposits, sales taxes, collections, billing, and basic financial reporting; but, as the business grows, more knowledge is frequently needed.

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Time to take a peek at the strengths and weaknesses in your business’s financial management!

Here’s the scoop: while a bookkeeper handles the basics, they might not offer what a growing business truly craves: management accounting.

Reports on finances and management are essential for businesses. Basic financial reporting is necessary for your business in order to maintain current books and comply with regulations. Business choices are supported by real-time data and key performance indicators when they are made with the help of management reporting.

So, when the day comes that your trusty bookkeeper just isn’t cutting it anymore, and you’re craving that next-level management accounting help, guess what? You’ve hit that exciting point in the business journey where accounting suddenly becomes a more interesting topic of discussion

Outsourced Accounting Provides

Businesses

A business owner typically needs to experience one or more of the following triggers before they begin to consider looking for a new accounting solution:

• Generating $1 million in income
• Utilizing eight to ten workers
• Taking in funds from external investors
• The CEO can no longer be active in every facet of the company.
• Starting the business lifecycle’s fast growth stage
• Desiring technological systems to communicate and interact with one another 
• Needing more complex financial data in order to make decisions based on data

We discover that businesses that are dissatisfied with the current state of affairs and have a “getting better” objective frequently view accounting outsourcing as an expedited path to management accounting. They view outsourcing as a competitive advantage that saves them money and time upfront and enables them to be the best in their field.

The psychographics of business owners who belong to the Millennial Generation are also probably going to support outsourcing. Having grown up surrounded by technology, they see outsourcing to be a strategic advantage that benefits their most valuable asset—their staff.

Nonprofit Organizations

Nonprofit organizations experience comparable management psychographics and life-cycle milestones, which necessitates the development of an enhanced accounting solution.

Rather than being an accounting manager, a nonprofit executive director usually has a passion for a noble cause. A skilled contributor may be identified by the director to take on the bookkeeping duties, but they typically fail when the accounting responsibilities increase.

Nonetheless, accurate financial reporting is crucial to the development and survival of nonprofit organizations, much like it is for businesses.  For nonprofit organizations, contemplation of a new accounting system may begin when any or all of the following scenarios occur:

• When revenues hit $500k, many states require audits.
• The Board of Directors wants greater assurance in the financial statements.
• Programs are competing for limited funding and require proof of return on investment.
• Obtaining funding requires filing foundation reports.
• Making the switch to a real Fund The accrual basis of accounting is necessary for accounting.

A nonprofit organization should, in our opinion, be managed similarly to a for-profit business, with the exception that revenues are reinvested in the organization’s initiatives.

Fund accounting, which is more complicated, is typically above the capabilities of a bookkeeper trained in cash-based accounting and can generate stress in the nonprofit’s financial operations.

Acting on the Warning Signs

If any of these signs apply to your business, you should be prepared to grow your accounting department beyond a bookkeeper. You, as the CEO or executive director, have to decide how to move forward with the accounting function during these crucial moments of stress. There are various choices available, and each has a unique cost-value connection.

Outsourcing your company’s accounting is at least 30% less expensive than creating and keeping an internal accounting staff. Outsourcing has benefits beyond cost savings, though. Companies opt to outsource in order to obtain access to outside expertise that they would not otherwise be able to pay, to improve their main business focus, and to avoid the risk and expenses of recruiting more people.

Focus on Core Business

Most NGOs and companies don’t consider accounting to be a fundamental ability. Core competencies are the unique selling points, competitive advantages, and senior management skills that drive a business’s growth.

Any task that is not directly related to your company’s core competencies and diverts resources and staff from producing revenue should be outsourced. Consequently, management can devote more time to the areas of the company that promote sales, customer satisfaction, and, eventually, profitability when accounting is outsourced.

Removal of In-House Burden

When a business uses other people’s resources (OPR) by outsourcing, it saves time and money that would be spent on hiring, training, and managing more accounting staff. Usually, when a business thinks about outsourcing its accounting tasks, it means the company already has a lot of employees.

As a manager, you already deal with enough human resource issues. CEOs who focus on strategy choose not to add to their workload by managing an accounting department too. As a CEO or executive director, your main focus should be on the people who are making money, not on dealing with accounting stuff.

When a business hires a Client Accounting Services firm to handle its bookkeeping and accounting, it usually gets a professional accounting team. This team can either handle all of the business’s accounting needs or work alongside existing staff to make things more efficient and separate tasks. And it costs a lot less than having a full-time accounting department.

Outsourcing is usually the next step for growing companies, but even fully funded start-ups can benefit from it. Start-ups need an accounting system that can grow as they do, and they often have to show their plans to investors ahead of time.

Access to Experts

Outsourcing your accounting means you get access to experts in accounting and business technology. These professionals know the ins and outs of accounting rules and can set up systems to track money across your company.

They’re always learning about new tech that could help your business. They spend time studying, training, and updating their skills to make sure your business stays ahead.

Compliance vs. Reliance

Traditional CPA firms mainly focus on making sure you follow tax and audit rules. But Outsourced Accounting Services go beyond that – they give you reliable financial insights to help you make smart money decisions.

Compliance means doing what you have to do. Reliance means having trustworthy financial info to guide your decisions.

Imagine you’re a CEO deciding on prices. Every proposal you send out is crucial. If your accounting just ticks boxes for compliance, you won’t see which customers or jobs are really making you money. But with reliance-focused accounting, you can easily figure out where your profits are coming from, like which customers are the most profitable or which marketing strategies pay off the most. That way, you can steer your sales team right and spend your marketing money wisely.

Peace of Mind

Outsourcing your accounting can be super helpful, whether you just need a bit more than basic bookkeeping or want a whole team handling everything. It’s flexible and gives you peace of mind.

With experts handling your accounting, you can trust that your financial info is accurate. That means you can spend your time growing your business and keeping customers happy, instead of worrying about the numbers.

Stop Financial Frustration Now, Talk to an Expert.

At Proowrx, we go beyond just bookkeeping and accounting. We provide critical oversight and account management to ensure the proper implementation of policies, procedures, and systems, accurate production of financial and management reports.

Proowrx provides outsourced bookkeeping and accounting services for growing businesses. Proowrx combines advanced accounting system design with a fractional share of a full-service accounting department, and a dedicated team of bookkeepers and accountants. Our customized management reporting and KPIs help businesses drive performance and profitability through data-driven decisions. So, why wait? Book a discovery call today!