Time to Consider Outsource Accounting Functions
Are you having trouble shuffling between managing your start-up growth and its accounting? Are other departments struggling because of accurate bookkeeping? This article helps to assess if your business needs to outsource accounting & bookkeeping requirements while highlighting the qualities that your outsourcing partner should possess.
During the early stages, it is common for start-up owners to take on the workload of several roles in the company. This could be because of early budgetary restrictions on working capital consisting almost entirely of seed money and angel investments. Although this practice is acceptable, it becomes increasingly difficult to manage multiple roles as you grow and reach different funding stages. A tip for tackling this would be to assess your accounting needs and determine if outsourcing is the right path for you.
So, let’s look at the key signs to assess if your business needs to outsource its accounting & bookkeeping requirements:
So, let’s look at the key signs to assess if your business needs to outsource its accounting & bookkeeping requirements:
No time to focus on what’s important
If a big part of your day is going down with bookkeeping, reconciling bank accounts, and managing account receivables and payables, then yes, you may have a problem. As a business owner, this could divert your efforts from finding ways to scale your business. What entrepreneurs do with their time during the early stages is crucial to success in the long haul. Only one-third of start-ups have a positive return on investment and most start-ups fail to succeed. Mismanagement of accounting due to stress and time constrictions could be one of the reasons behind it
Therefore, it is worth considering to place your accounting needs in better hands. This is not to suggest that start-up founders lack the skills to perform their in-house accounting but instead speaks to better use of their time and talents. So, read this sign and consider handing over your accounting to a service provider that does the most important yet time-exhausting aspects of bookkeeping ie.
- Reconciliation of your bank accounts,
- Recording your daily transactions,
- Managing your account payables and receivables,
- Ensuring statutory compliances and
- Delivering accurate, relevant and timeous business reports for informed decision making
An accounting tip is to stop burning the candle on both ends and explore the possibility of outsourcing your bookkeeping today and allow DIGI ACCOUNTO to free up your time, which is your most valuable resource.
Proper Tax Compliance
If you are constantly in fear of tax compliances but lack the understanding of navigating through the taxation law, you are not alone. Most start-up founders do not place enough priority on tax compliance. Current tax laws are more stringent than ever before, with steep non-compliance penalties and heavy incurred interest on businesses.
Non-compliance of statutory tax laws would damage the reputation of business and drive away potential investors during important stages in the start-up lifecycle. This can hinder growth and profitability.
In actuality, effective tax planning and compliance are beneficial in increasing working capital by saving outbound cash flow. So, go ahead and outsource accounting to a firm that specialises in tax efficiency, planning, compliance, and litigation management.
Scaling Accounting
The accounting service providers has the amount of availability to scale your services significantly without any lag. For example, if your bookkeeping and accounting tasks exceed the number of functions for 1 employee, you can easily be enforced with the extra workforce. Without the need to go through a rigorous recruitment process.
Moreover, accounting and bookkeeping service providers are charging on an hourly basis. It means you can scale up or scale down the hours without any interruption.
Automation Technologies
Most businesses use accounting automation software to save time. It will save time, but importantly, it reduces risks. Automating accounting is minimizing human errors. Secondly, in automation software, accountants get real-time reports. They assist in catching potential problems and resolving them at an early stage. Thirdly, it will reduce the probability of internal fraud.
Most of the accounting service providers are highly qualified in the automation tools such as Quickbooks, Sage, Visma, Xero, Microsoft Dynamics, SAP and more.
If your accountants are still using only Excel sheets – you are wasting your time and money.
Losing Money Even Though You are Revenue Positive
Are you losing money even though you’re generating revenue? If you are, it is important to take a step back and reassess your current situation. You need accurate data reports and dashboards to help you identify the cause of your financial losses. Most start-ups receive periodical funding in stages and struggle to formulate a solid budget plan for the efficient usage of these funds. One reason start-ups lose money is poor accounting practices. If this is the case for your business, you may need to consider an accounting outsource service right away.
Digi Accounto is a professional accounting service provider. We partner with clients for the fulfilment of their business financial needs. Contact us today to explore how we can help you take your business to new heights.
Write a Comment