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Outsourcing Accounting: 5 Essential Tips for Your Small Business

You may have a good understanding of every facet of your small business early in your entrepreneurial journey. But as your business grows, it becomes a challenge to keep up, especially in areas of financial management such as accounting and bookkeeping. So consider outsourcing to take some of this burden off your workload.

Switching to outsourced accounting services can be a smart business move. It may come at a cost, but it will likely free up valuable time and resources. Better yet, it allows you, the founder, to shift your focus to business-building activities. However, it is imperative to approach this choice with forethought and planning as you will need to find a top-notch financial expert.

Here are five things to remember when outsourcing your finance and accounting functions.

Choose an all-in-one solution

You can choose to keep your accounting separate. But there are pros and cons to consider. On the plus side, having two different companies provides additional control over everything related to finances. Nevertheless, this approach may require you to take on project management responsibilities and facilitate coordination between the two entities. Evaluate your options carefully and decide based on your specific needs.

Build long-term relationships with external experts

It’s essential to ensure your accounting team grows with you, rather than hiring successive companies to cut costs. Finding the right outsourced accounting team and building a long-term relationship with the team can help avoid turnover costs.

Additionally, this will allow the outsourced team to better understand your needs, tailor their services accordingly and even spot trends and potential problems more efficiently, saving you time and money.

Use cloud accounting

Consider switching to a cloud-based accounting system. This technology stores all your financial data securely on a password-protected server, ensuring easy backups and accessibility in the event of system failures or disasters.

Keep core functions in-house

Unlike the accounting department, the treasury department processes banking transactions. To avoid fraud, embezzlement and financial errors, it is advisable to rely on trusted internal personnel to access the treasury, rather than outsourcing accountants.

Don’t outsource billing

Invoicing, often seen as an accounting task, has become easy to use thanks to cloud-based systems. Invoicing requires excellent operational expertise more than accounting knowledge. This makes it efficient to keep the process in-house.

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