Does Outsourcing Accounting Make Sense for a Start-up?
Managing a start-up is incredibly demanding. You are rattled by possibilities of failure at every corner. You are hounded by this generation’s constant and rapid demand for something new and exciting. Running a business demands you to be many things, manager, product designer, salesman, sometimes even the packer. On top of all of these roles, do you even have time to be your own CPA?
It doesn’t matter if you have a small, medium or large business, when you start growing, all businesses experience the same thing–a sudden complication in their accounting.
Are you ready to meet these changes?
What are the benefits of outsourcing for start-ups?
The biggest benefit of outsourcing is the flexibility it offers the business owner while saving some money.
Because somebody else handles the books, the business owner will have more free time and a better workload. By delegating the accounting responsibility, he can redirect his efforts to make innovations, create new products, even make plans for expansion, and focus on the future of his business.
By outsourcing, you can save money on salaries, taxes, office supplies, and benefits for the full-time employee. Outsourced accounting also provides specific plans for their clients. You don’t need to pay for the full package, you can customize your engagement and only pay for the services you specified.
Another benefit is meeting compliance requirements. If you continue to do your accounting while running your business, you won’t only need to become a CPA, you need to be a tax expert too. With the recent events of the pandemic and innumerable tax laws that have been amended, repealed, and amended within the last 2 years, compliance has become more complicated compared to the last taxable years. Meeting compliance requirements could prove to be more difficult than anticipated. By outsourcing, you have a partner whose main job is to be updated about these rules and guidelines.
Finally, you can take advantage of a library of knowledge, pre-established accounting systems, and enduring expertise taken from years of existence as an accounting firm working in a specific industry.
Disadvantages can’t be helped. There are always two sides to everything.
For one thing, communication barriers will be felt due to the need to communicate with the outsourced accounting team. To prevent it from happening, you should lay your cards down from the first meeting. Present your communication needs, and set clear expectations to avoid misunderstandings.
Security risks are another concern. Before handing over any data the business owner should have thoroughly discussed action plans to mitigate data loss and security breaches.
Owners also fear the loss of control. But control is an illusion. One person can’t run a business on their own. Collaboration is an important factor in the success of your business. The best way to mitigate this fear is by finding the right partner.
So, do you outsource for start-ups?
Running a startup requires more than just a business idea. Most of the time, only fearlessness and grit will keep the business afloat. You need to be adaptable in order to survive, after all, only change is constant in the start-up environment and it often catches you off guard.
If you feel like you are losing your financial health and your books have become a mess, we can help you make meaning out of that mess.