It’s not uncommon for small business owners, especially entrepreneurs, to run as lean of an organization as possible. They hold on to too many business functions, especially finances, for as long as possible.
So when is it time to outsource your financial needs to a fractional accountant? Here’s some advice on how to weigh t his decision.
The answer typically comes down to two facets: Capability and Capacity
Capability
Capacity
Capability refers to how “capable” the owner is of performing the actual accounting. Many business owners have some working knowledge of accounting principles and how to track revenues and expenses. However, there comes a time when the owner’s capabilities are better spent on other aspects of the business. Outsourcing accounting functions can free them up to focus on the tasks and skills they uniquely bring to the business!
Capacity refers to the time an owner has available to dedicate to their accounting functions. There comes a point of imbalance when a business owner spends too much time “in” their business instead of working “on” their business. They need to outsource functions that are better left to experts, so their capacity can best be used to focus on strategy, growth, and customer satisfaction – functions that are much more difficult to outsource.
Common scenarios that warrant outsourced assistance:
- You use your accounting software so infrequently, that there is a learning curve every time you use it.
- You are behind on collecting outstanding receivables and/or sending invoices.
- You are highly focused on top-line revenue but don’t understand your expense base.
- Your skills are sufficient for current needs, but insufficient for where you want to take the business.
- Gathering documents for your tax preparer results in a great deal of time and stress.
- You have relied on your spouse/family/friends in the past and they maxed out their time and/or capabilities.
- You are spending more time cobbling together financial data instead of focusing on critical parts of your business like creating, selling and growing.
- Your current accounting staff is either inefficient and/or ineffective, causing you to be more involved than necessary.
Did any of those scenarios resonate with you? If you’re still undecided, here are some additional benefits to outsourcing:
- Improvement to the owner’s, and ultimately the company’s, focus.
- Increase efficiency by outsourcing functions that the company may lack resources for.
- Highly skilled and valued tasks are performed without paying full-time salaries and benefits.
- Dedicated focus usually means better control and reduction of costs.
- Owner has freed up time and energy to put towards goals and objectives.
- Specialists bring a wealth of experience and can serve as valuable advisors, offering insights and recommendations to improve financial processes, reduce costs, and enhance overall financial health.
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.