Big businesses have been engaging in outsourcing for many decades now. From sending their call centers overseas to sourcing their products through the global supply chain, those large firms have sought to drive down costs, improve efficiencies and build more streamlined operations, including accounting.
As a small business owner, you can follow the lead of those large firms, albeit on a much more modest scale. A bit of strategic outsourcing can be the perfect cure for all kinds of small business woes, and here are five signs it may be time to let a professional accounting firm crunch the numbers.
1. Your Clients Are Complaining
No matter what your small business does, without its clients, it simply would not exist. Whether you sell products to the general public, raw materials to fellow business owners or something else entirely, serving the needs of your clients and answering their inquiries should be your number one priority.
If you are spending more time crunching the numbers and filling out financial forms than meeting with your clients, it may be time for a major overhaul. When clients have started complaining something is clearly wrong, and engaging in a bit of strategic outsourcing could give you more time to focus on actually running your business day-to-day.
2. You Are Feeling Overwhelmed
Running a small business can be a bit overwhelming, especially when you are wearing all the hats. If you are busy serving the needs of your clients while sweeping the floors and emptying the trash, adding ad hoc reporting to your list of duties is probably not a smart thing to do.
If you are feeling overworked and overwhelmed, a little strategic outsourcing could restore your lost work/life balance and allow you to finally get some sleep. You do not have to do everything to run a great small business, and letting an expert take the reins could be the best decision you ever make.
|Related: What Rising Inflation Means for Small Business Owners – LJ Suzuki of CFOShare
3. Taxes Are Higher Than They Used to Be
It may not be fair, but small business owners often end up paying more than their fair share of taxes. Solo practitioners and entrepreneurs often lack the resources and the understanding needed to keep their tax bills low, and they do not have the political pull of their larger and more well-connected peers.
As a result, your firm could be paying more taxes than it needs to, and if you have seen your taxes rise in recent years it may be time to take action by hiring a CPA to analyze your finances and help you stop the bleeding. A good accounting firm or CPA can pay for themselves many times over in terms of lower taxes, higher deductions, and a better sense of what is really going on inside your business.
4. The Company Lacks a Coherent Financial Vision
For accounting firms, the balance sheets and profit and loss statements your business generates are much more than collections of individual numbers. Every number on those forms is a data point, and analyzing that data is a big part of what accounting firms and certified public accountants (CPAs) bring to the table.
Creating a comprehensive and coherent financial vision can be a difficult thing to do when you are busy running your business day to day, and outsourcing those accounting tasks could be just what you need in terms of analyzing and making sense of the data. If your firm currently lacks a coherent financial vision, it may be time for a bit of outsourcing.
5. The Company is Growing
Growth is a good thing for your small business, but it should not come at the expense of a strategic vision or a comprehensive financial strategy. If your business is undergoing a growth spurt, chances are good that you have outgrown your DIY accounting and could benefit from something a bit more professional.
Letting a professional accounting firm or individual CPA take the reins could have enormous benefits for your business as it grows, including providing a scalable solution for your firm and saving you money in the long run. Strategic outsourcing at this critical stage could also give you the time and bandwidth needed to focus on all those new clients, and that could help your business grow even more.
Outsourcing is not just for big businesses, and even the smallest of firms can benefit from letting outside professionals take the lead. If your business is growing quickly, paying too much in taxes, or neglecting the needs of the clients that made that growth possible, it may be time to engage in a bit of smart and strategic outsourcing.
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