Automation and outsourcing is the future. Heck, automation and outsourcing is the now; you can look no further than our ACH/Wire automation services for clarity on that statement. We’ve seen rapid growth over the past few years in the sector. Small businesses are always looking for seamless and fluid processes.
So why aren’t more companies outsourcing their accounting departments?
It would seem that outsourcing an accounting department could improve efficiency by leaps and bounds.
But some small businesses still remain fearful of outsourcing something as important as accounting.
I get it. Everyone gets it.
But the numbers don’t lie. Accounting outsourcing is happening. Pandora’s box is now wide open and it isn’t likely going to be a way to close it soon.
To get an idea of why this is true, let’s have a look at some general accounting statistics and concepts.
7 of 10 Small Businesses Outsource Accounting
That means that 70% of all small businesses already outsource accounting. (source)
What does that tell you?
It tells me that small businesses have discovered that internal accounting departments can amount to headaches. When you outsource an accounting department, you corral your financial departments into a professional space. You turn over the numbers to professionals who live and breath accounting. You suddenly have financial professionals to lean on for questions about taxes and payroll. You lower your risk of tax blunders by a large amount.
When we break down the outsource numbers specifically, we see that 71% outsource taxes, while 50% outsource payroll. Many companies keep an on-site bookkeeper.
But the numbers don’t lie, when it comes to accounting, the needle is moving toward full-service outsourcing.
Internal Accounts Have Little Benefit
Having an accountant on-site isn’t as helpful as you might think. The only true benefit could be in your more intimate relationship with the person, but that could also be its downfall. Often, company fleecing and theft is accomplished by those who have earned a great deal of trust.
Using that same source above, we can see that over 60% of business owners don’t feel their accountant could lower their taxes. Meaning, they feel any moves that could result in lower taxes would probably be more aggressive than the business owner is comfortable with.
So if hiring your own small business accountant can’t lower taxes, nor lower risk of theft, why do it?
A professional accounting outsourcing company can run the show for less. They do accounting full time, for a diversity of businesses, giving them a super beneficial perspective on accounting. This means they keep up with the news involving tax trends and policies. They live and breath accounting. And because they tend to work with a number of other businesses, they are always finding more ways to streamline their process to all clients.
Accounting Is Important
For most small businesses, accounting is far from a dreamy department ripe with frills and thrills. Instead, its darn boring. Accounting meetings make most of us clamor in fear of boredom. We hope to sneak our smartphones under the table so we can get our Facebook on during PowerPoint presentations.
Bar graphs are sleep inducers.
But it is hard to argue the incredible importance of accounting.
Accounting is a central component of a small business.
Messy accounting can mean audits and IRS issues.
Inept accounting can mean revenue losses and disasters.
If you don’t totally know what you make, how can you scale?
If your revenue projections and daily assessments are incorrect, you can’t know how much you can spend on new advertising and product development. You might be shorting yourself, or, sadly, overextending yourself.
Putting something as important as accounting in the hands of professionals is essential to your business. It isn’t a place to short yourself. More and more, small businesses are realizing such.
Most small businesses outsource accounting in some way, whether it be taxes or payroll or otherwise. Outsourced accounting means creating a professional extension of your business. Accounting outsource companies are usually extremely knowledgeable regarding tax laws and tax trends.
Accounting is the epicenter of most any small business. Leaving it to hang in the balance of those who don’t live and breath it is taking a big risk. More and more small businesses are realizing that the fear of outsourcing is less cary than the fear of having it screwed up.