Should you outsource the bookkeeping and accounting of your company?
Depending on the size of your business will dictate if you should be outsourcing your bookkeeping and accounting services. I have seen companies with revenues over $20MM that still outsource this service. So I will say, that each business and industry is different in how they approach outsourcing. It allows flexibility but can be a little more expensive over direct hires.
The advantage of this flexibility is if the consulting firm is not performing, you can transition. Which is a lot easier than bringing in a bad accountant and having to let them go.
Getting accurate financial reporting for your company is extremely important. Business owners, executives, and directors can get caught up in the thought process that the financial department is a sunk cost. I would challenge that way of thinking, and state, “that a high functioning finance department or resource should pay for itself”.
“……a high functioning finance department or resource should pay for itself”.
Risk mitigation, catching errors, establishing sound financial recording processes so you can trust the data, overlay projections, run what-if scenarios, predict the future, etc. I can go on and on, but imagine the impact that could have on your business. What if you could accurately monitor the flow of your ad spend to your specific products and the contribution to overhead they were each contributing, make adjustments each day to transition ad dollars and shift your profitability. That could be some serious ROI on the cost of outsourcing your accounting needs. Instead of just trying to dollar cost average your entire ad spend across all of your sales….please don’t do this!
I have seen so many companies trying to navigate their growth without having the ability to do it through the lens of accurate financial forecasting. But, the start of great forecasting is a solid foundation of accurate historical records…….a solid bookkeeper or accountant.
Lastly, if you are looking to outsource this service, make sure you are not just hiring a bookkeeper. You want the firm to have higher level resources as well. Think director or CFO, that can review your financials, operations, and your business model and provide that higher level of consulting for you. In which they can help you achieve the BHAG that you have in place!
If you have any questions if you should outsource or hire an internal accountant feel free to reach out to me.