Don’t Do the Math: 5 Reasons Outsourced Bookkeeping Services are the Right Choice for Your Business

Published on: 25 December 2018 Last Updated on: 08 August 2019
outsourced bookkeeping

Every business owner is faced with the challenge of knowing when to outsource and when to hire in-house.

With most business tasks, this depends on many different factors. But when it comes to accounting, it’s always better to outsource.

In this guide are five amazing benefits of outsourced bookkeeping. Read on to see why you should outsource bookkeeping services.

1. Increased Privacy/Security:

Due to the sensitive nature of financial documents, and the wide array of legal issues that result from improper bookkeeping, your accountant must be extremely trustworthy. If they do you wrong, it could completely destroy your company.

This is doubly true of in-house accountants. As they are a member of your own staff, you are held accountable for any mistakes they make.

But when you outsource your bookkeeping, this burden of accountability is outsourced as well. Since the accountant belongs to a separate company, any mistakes or intentional misconduct they make is on them, not you.

Plus, when you outsource, there’s far less chance of misconduct happening regardless. The stakes are much higher for outsourced accountants than for in-house ones.

For an in-house accountant, bookkeeping is just a job. They might leave for a better one at any time. They aren’t necessarily all-in.

But a third-party accounting company is. If they don’t provide you with competitively superior accounting service, they’ll go out of business.

2. Peace of Mind for Everyone Else:

When you do your own bookkeeping, you have exclusive control of your company’s secret financial records that no one else is allowed to see. Understandably, this makes clients and tax agencies nervous.

How do they know you’re not fudging numbers and manipulating the records for selfish gain? They’d have to just take your word for it. And that’s not very reassuring.

But a third-party accountant has zero incentive to bookkeep dishonestly. And since the accounting is done off-site, no one at your company will even have access to edit or share this information. So there’s no reason for anyone to question the accuracy or integrity of their accounting.

3. No Training, No Management, No Turnover:

Your outsourced accountant requires no recruiting, no training, and no management from you, ever. That’s all taken care of by their company.

It’s true, however, that you’ll still have to scout for the right accounting company for your business. But it’s much less involved than the typical hiring process. Here’s more info on that.

Best of all, you’ll never have to worry about turnover. This is a really, really huge deal when it comes to bookkeeping. Have you ever considered what happens if your in-house bookkeeper quits without any notice whatsoever?

Accounting is essential. It’s not something you can put on hold until you hire someone else (which can take a really long time). Who will take care of it in the meantime?

If you outsource, you won’t need to answer these questions. Even if the accountant assigned to your case abruptly quits, there’s an entire team of qualified accountants ready to replace them.

4. Keep Your Focus on Your Business:

You heard us right. When you outsource, you won’t have to recruit, manage, or rehire accounting staff, or do your own accounting, ever again. It sounds like you just got a lot more time on your hands.

What will you do with it? You’ll do what you do best, of course. You now have all this extra time to invest in your business where you’re needed the most.

5. Upscale or Downscale With Ease:

Outsourced accounting is as big or as small as you need it to be. It will more easily upscale or downscale with you as needed than in-house accounting staff.

There won’t be any hiring or layoffs of accounting staff when your company rapidly changes size. And they don’t take up any space in your office, so space restrictions won’t be an issue, either.

Get Outsourced Bookkeeping For Your Business:

It’s now plain to see that outsourced bookkeeping is the best option for any business. Outsource your bookkeeping to reap these great benefits.

Get more financial tips for your smoutsourced bookkeepingall business right here. Read about six loan mistakes every business owner must avoid.

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I enjoy writing and I write quality guest posts on topics of my interest and passion. I have been doing this since my college days. My special interests are in health, fitness, food and following the latest trends in these areas. I am an editor at Content Rally.

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What should be there in an ICO Whitepaper? Expert Take

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Platform Companies

Platform Companies: What They Are And How They’re Used

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When selecting a company to purchase, private equity firms generally look for a few characteristics: Status as a Market Leader: For the best chance at success in the given industry, equity firms will typically target companies that stand out — even if it’s just within a certain geographical location or in a very specific market niche A Strong Management Team: When equity firms acquire platform companies, they typically want to keep the existing higher-level employees to ensure the company’s continued success and improve the business practices of new acquisitions Multiple Locations: A business with multiple locations has already expanded its reach, and equity firms can build on that with further acquisitions Established Standard Operating Procedures: When expanding the platform company, the equity firm can simply apply these operating procedures to new acquisitions After the purchase, the platform company serves as a kind of home base for the firm within the industry. The private equity firm will usually then expand that business through bolt-on purchases (also called roll-up purchases or roll-up acquisitions). Bolt-on purchases are different from another kind of acquisition called a tuck-in acquisition. With a bolt-on acquisition, the newly purchased smaller company will usually keep its name and identity. With a tuck-in acquisition, the smaller company is completely absorbed into the larger platform company. Why Would an Investment Firm Acquire a Platform Company? When private equity companies purchase a platform company and begin to expand into a new industry, they aren’t doing so with the intent of keeping the company forever. Instead, platform acquisition is a long-game investment strategy. It takes a significant amount of time, but it can generate a massive profit. In a nutshell, equity companies buy and expand platform companies in hopes of eventually selling the expanded company to an even larger investor. Selling the companies as a conglomerate is almost always more profitable than selling each one separately. For example, suppose that a private equity company wants to break into the fitness industry. The company might start by purchasing a regional chain of gyms. As it purchases other, smaller gyms, it will use the management expertise and existing operating procedures of the first acquisition to improve each of the smaller gyms. It will also invest money in smaller gyms to increase their value. When the company finally sells the expanded network of gyms, it will have created a profitable business venture that runs smoothly. This type of purchase is an attractive one for larger investors, so the equity company will be able to turn a significant profit. How Platform Companies Can Impact Business Owners At first, the idea of a larger company buying up smaller companies might not sound that advantageous to owners of small businesses. However, as a platform expands and acquires multiple smaller companies, those companies can see some surprising benefits. For one, platform companies will usually invest significant capital in the new company soon after purchase. After all, the whole point of the acquisition is to increase the total platform’s valuation. But money isn’t the only investment that platform companies put into smaller companies. After the acquisition, the equity firm will continue to focus on growing the newly acquired business. The newly purchased business will reap several benefits from the platform: Experience in sales and marketing Experienced professional management Financial acumen Standardized, organized operational procedures In many cases, these smaller acquisitions retain their company name. That makes the acquisition more appealing to many small business owners, especially those who have built their businesses from the ground up.  In many cases, an acquisition ends up as a win-win situation: The platform company expands its reach and total value, and the smaller business receives valuable funding and mentorship. Platform Companies Add Value Being acquired by a platform company can transform a smaller business for the better. And for the platform company, each new acquisition has the potential to bring in new customers, expand the company’s market reach, and increase the value of the platform as a whole. On its own, the acquisition of a single small business might not seem like much. But when a firm repeats that process many times over, the result is an expansive, highly organized company that multiplies its value over time. Read Also: A Beginners Guide to Listed Investment Companies 6 Steps to Starting a Business in Michigan How to Start Business Like Swiggy

Financial Health

Ways To Improve Your Business’s Financial Health

Improving your business's financial health is essential to a successful enterprise. In today's increasingly competitive environment, companies of all sizes must take steps to ensure their long-term success and profitability. This article will provide advice on how you can assess the financial health of your business and tips on what actions you can take to improve it. Ways To Improve Your Business’s Financial Health As mentioned above, maintaining a business's financial health is crucial to the business. There are instances when the stakeholders need help understanding the ultimate objective of the business. Consequently, the business may fail. Therefore, as an entrepreneur, you need to understand the situation thoroughly.  This section discusses some of the ways through which you can assess the financial situation of your business.  Assessing Your Business's Financial Situation Take note of cash flow, assets, liabilities, profits, and losses. Your efforts to improve the financial health of your business may falter.  Analyze any trends in these areas over time—what has been working? What could be improved? Make sure to factor in changes due to inflation or economic conditions. Therefore you must take the help of experts who can deliver your needs. They are professionals and can carry out audits to ensure you better understand the business, and that too with utmost clarity. Analyzing Your Current Profit And Loss Analyzing your current profit and loss is critical to understanding the financial health of your business. Start by gathering all of the relevant data from last year's performance--income, expenses, net income, etc.--and analyzing it thoroughly. Calculate ratios such as return on assets (ROA) or profitability index (PI). Compare historical trends in these measures to understand how your business has performed over time and where you can improve. Look for areas that are performing well as well as those needing attention and come up with strategies to improve them. Discuss the elements with the leader of your team. At the same time, make sure that you calk out the plans together to get better results on your investment. Therefore what you need is to have a thorough discussion on your project outcomes. Strategize your business based on the outcomes and can help you find solutions to your problems. Evaluating Your Cash Flow Good cash flow management is essential for business success. It’s important to understand where your money comes from, how much you have, and when it leaves the company. An effective way of evaluating your cash flow is by creating a financial forecast that accurately predicts income and expenses at different points throughout the year. If you have a strong knowledge of the cash flow in your business, you can have a better evaluation. It can help you identify your needs. It is indeed one of the approaches to understanding the health of your business. Additionally, tracking your invoices and payments closely can be beneficial as it allows you to spot any potential problems with customers who may not be paying on time or at all. Optimizing Your Expenses Optimizing your expenses is an essential step in improving the financial health of your business. It's critical to review and evaluate all expenditures, as well as identify any areas where money can be saved without sacrificing the quality of goods or services. One of the best ways to identify your expense is by utilizing an enterprise spend management system. Also, looking closely at your spending on labor, materials, overhead, taxes, and other business costs can help you reduce unnecessary spending. Additionally, some practices that may help improve efficiency include negotiating with vendors for lower prices, creating budgets and sticking to them, tracking expenses regularly, and automating processes whenever possible Take the assistance of the experts in finance to understand what you need to have at this point in time. It can help you successfully manage your expenses. Hence what you need is to form an understanding of the finances that you need. Finally, plan on the optimization.  Utilizing Tax Strategies To Your Advantage Taxes can be a significant burden for businesses, but there are ways to leverage tax strategies to your advantage. By taking the time to understand how taxes apply to your company you could qualify for, you can reduce how much of your hard-earned money goes toward paying taxes. Additionally, staying on top of changing rules and regulations helps ensure you're always compliant with applicable laws and taking full advantage of all available tax benefits. Generating New Sources Of Revenue Creating new revenue streams can be a great way to improve your business’s financial health. Finding creative ways to generate income and reduce costs is essential for long-term success. Increasing sales or finding more cost-effective suppliers are two significant areas to consider when increasing profitability. Additionally, creating partnerships with other businesses in the industry may open up opportunities that would not have been available before. With careful planning and implementation of strategies, it's possible to create sustainable sources of income which will keep your business afloat during difficult times. Reducing Debt Reducing debt is a crucial part of improving the financial health of any business. To do this, you should prioritize paying down high-interest debts first while making regular payments on lower-interest loans. You should then focus on developing a budget and sticking to it to ensure that your business does not take out more debt than necessary. It's also essential to shop for lenders who can provide better terms or rates if you buy new loan products. Finally, creating a plan to save money and create additional revenue streams will help improve your bottom line and stabilize your finances. Conclusion To wrap up, it's essential to take a holistic approach to improving your business's financial health. You should evaluate your current profit and loss statement because these steps will help you ensure that you take the necessary measures to improve your company’s financial standing. With proper planning and dedication, you can make sure that your business remains as financially healthy as possible in the future. Read Also: What Are The Most Important Insights Which the People Should Know About Coronavirus Health Insurance? 7 Wise Financial Choices That Will Help You Follow Your Budget How to Become Financially Stable Before Age 30