You likely started your business because you have a vision.
You’re passionate about your work. You have unique expertise that makes you incredibly valuable in your industry. You have a vision about how you could solve your customer’s challenges in new ways and revolutionize your industry – maybe even the world.
And you’re fighting every day to either turn that vision into reality or to enjoy the success you’ve achieved – probably both.
The last thing you need to be doing is spending time organizing your finances and executing all the tedious minutiae that accounting can bring.
Business owners work hard to run a lean organization, especially as they are starting out. But at some point, you either run out of capacity to get everything done or the financial requirements of the business begin to exceed your capability.
Whenever that happens, it’s time to delegate some, or most, of your financial responsibilities.
Below are the first nine responsibilities we at Empower believe most business owners should outsource:
1. Bookkeeping
Inch by inch, life is a cinch.
Yard by yard, life is hard.
If you’re a business owner, you’ve probably experienced the frantic need to get all your books in order on a tight timeline to meet a tax deadline or prepare your books for a banker. It’s stressful, tedious, and overwhelming.
By handing this responsibility off to a qualified accounting professional, you can be confident that your books are consistently up-to-date, organized, and accurate. A great accounting professional will use a tool like Quickbooks to make sure that your books are easy to analyze and understand and they reconcile with your bank account.
Outsourcing this function gives you valuable time back but also ensures you have the financial data you need when you need it.
2. Paying Your People (Compliantly)
Not only is it good for morale, but paying employees on time is required by law. This administrative task can sometimes get overlooked especially when it’s done weekly or bi-monthly. By outsourcing, you can trust it will be performed on time and nuances like reimbursements, garnishments, and benefits remittance are handled properly.
Payroll is more than just paying yourself and your employees/contractors as there are quarterly and annual tax filings due to the state and federal governments. This is one area where fees and penalties can quickly add up so it is best left in the hands of a professional.
3. Paying Your Bills (Accounts Payable)
Let’s face it, we like to get paid on time – and so do our vendors! But sometimes it’s difficult to stay on top of paying them. Some are on auto-payment, some invoices emailed, and others through the mail. Wouldn’t it be great to have someone oversee all this, streamline and automate where possible?
By outsourcing this function, you will have a professional ingrained in your process and help you avoid costly penalties for late payment. This can help build strong vendor relationships which are oftentimes imperative when running a small business. Not only that, but great accounting professionals will also be able to alert you to overlooked auto-billings that need to be canceled and can help save you a significant amount of money.
4. Collecting Payments (Accounts Receivable)
Today’s economy can be uncertain for some businesses and time is of the essence in collecting on your company invoices. The older your account receivables become, the lower your chances of recovery and the more negative impact they have on your cash flow. Uncollected debts cost businesses billions of dollars every year!
Don’t let your money sit in someone else’s hands when it can be invested back into your business. The reality is that most businesses that are late to pay you are either just busy and have forgotten, might need to address some issue they are having with your payment systems or preferred payment method, or need to negotiate some kind of payment plan, if applicable. An accounting professional can help follow up and provide best-in-class methods to remove friction for customers.
5. Cash Flow Analysis & Forecasting
Cash is king. Knowing your upcoming cash flow is critical in the life of a small business owner. An accounting professional has the knowledge and tools to keep an eye on this key task. Because they are ‘in the weeds’, they know when sizable expenses might be coming up (ie: annual subscriptions, quarterly payments, insurance premiums, etc), along with the cyclicality of your revenues. They can advise when cash might be tight so you can strategically plan ahead instead of an aggressive reaction in the moment.
Knowing your cash flow projection will allow you to make proactive decisions like when to hire someone, or invest in a marketing plan; or conversely, when to make cutbacks.
6. Financial Reporting & Analysis
Many small business owners are content just knowing if their revenues are greater than their expenses. Understanding your financial picture in more detail can be so valuable, but it takes time to assemble the details and learn to analyze the reports that can be built. An accounting professional can help analyze your overall business, your margins, trends, and even identify opportunities. They can recommend when it might be time to pay down debt, reinvest back into the business, or increase prices – all by analyzing your financials on a monthly basis.
They may also be able to analyze and compare your business against industry benchmarks and highlight areas of risk or opportunity.
This is difficult to do for CPAs or consultants who might only look at your business 1-2x a year. Having a professional ingrained in your weekly/monthly/annual processes will allow them valuable insight so they can advise accordingly.
7. Compliance & Tax Filings
Running a business already requires a ton of time and energy. When you add the regulatory filings and compliance matters you’re obligated to manage, it can get overwhelming pretty quickly. You have things like workers’ compensation and unemployment insurance, sales tax remittance, state employment registrations, annual filings if you’re a non-profit, and so much more. Rules and regulations can differ by agency, city, and state and there is no handy roadmap outlining all of them, so hiring a professional can help keep you out of trouble.
8. Debt Management
Most small businesses have incurred some form of debt throughout their lifecycle. Debt isn’t always a bad thing, but not understanding your full debt load, payment terms, and interest rates can oftentimes mean that your business is hemorrhaging money when you don’t have to.
An outsourced accounting professional will be well-equipped to analyze your liabilities, assess your creditors, and guide you on the most cost-effective paydown strategy. They will also have knowledge of industry best practices and when it makes sense to increase available debt or decrease liabilities.
9. Tax Knowledge
While not every accounting professional will be able to file your taxes on your behalf, they will have valuable tax knowledge that can not only keep you compliant but can also ensure that you’re qualifying for valuable deductions.
The tax code is always changing. Things like the mileage reimbursement rate, how much you can deduct for business meals, and other details can be hard to keep track of, but are important to know and understand as you manage your business towards success.
A great accounting professional will be knowledgeable in these areas and help make sure you’re making proactive, informed decisions in your business, and keeping track of the details that matter most.
How to Choose the Right Accounting Professional
Finding the right accounting professional to delegate some of this valuable work to can be hard. Do you hire a CPA firm? A virtual assistant? A part-time employee?
How do you vet them the right way or define their responsibilities? What confidentiality agreements need to be in place?
The upside of having a great accounting professional on your team is tremendous, but getting the right person in place is hard. That’s why we created Empower.
When you hire an Empower Accounting Professional, you’ll know:
- Their education and experience have been thoroughly vetted
- They’ve been trained in industry-best software and tools
- They’re part of a supportive community that’s staying up-to-date in how to serve you best
- They have access to professionally drafted legal documents, including confidentiality agreements
- If they ever leave or aren’t the right fit, other professionals are similarly trained that can fill their shoes
At Empower, we believe that when you bring a qualified accounting professional with a dedicated, supportive community to a business owner with a clear vision, their businesses grow faster and healthier, and entrepreneurs thrive.
If you’re ready to hire an accounting professional, reach out to our team at any time here.