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Outsourced Accounting: Top Benefits & Tools to Use

By January 14, 2022No Comments

As a small business owner, you wear all the hats. But especially when it comes to the money side of the business, no one knows the ins-and-outs of the finances more than you. You’re the one prospecting, making the sale and closing the deal. You’re also the one closest to the numbers. Understanding the numbers and how they affect your business’ standing can be time consuming and can be frustrating. It’s no wonder so many small business owners have turned to outsourced accounting services for relief.

Find out what outsourced accounting is, and whether it’s a solution worth looking into.

benefits of outsourced accounting

Outsourced Accounting: What is It?

Outsourced accounting is leveraging the use of third-party (aka outside) resources to assist with your business accounting. Not to be confused with bookkeeping, which mainly deals with recording transactions, accounting involves:

  • Analyzing financial statements and costs of operations
  • Recording expenses that were missed by a bookkeeper—also known as adjusting entries
  • Completing income tax returns and doing tax planning
  • Determining the financial impact of business decisions, analyzing cash flow, and evaluating the overall financial health and profitability of a business

By choosing outsourced accounting, you’re actively choosing to work with Chartered Professional Accountants (CPAs), who are educated, knowledgeable, and trained to help support you with the many often complex finance activities.

These include:

  • Customer billing and invoicing
  • Back office support
  • Filing and submitting taxes
  • Running financial reports
  • Paying your bills
  • Payroll processing
  • Bookkeeping and reconciliation
  • Financial planning
  • Industry-specific accounting tasks

(Side Note: trust us when we say, you want to make sure you’re doing your accounting properly—here’s what happens when you don’t).

Benefits of Outsourced Accounting

Outsourced accounting is fast-growing in popularity as of recent years—especially amongst small businesses. That’s because accounting is something you can do yourself, but as your business grows, an expert who knows how to manage bookkeeping, payroll, monthly reporting and more can be particularly useful.

Plus, according to Grand View Research, the global business process outsourcing market is projected to reach USD 435.89 billion by 2028, up from USD 232.32 billion in 2020.

TLDR: you’re not the only one considering outsourcing as an affordable means to keep growing your business.

Here are just a few of the top benefits of outsourcing your accounting, so that you can focus on other priority tasks:

Save Your Business Money

The most obvious benefit of outsourced accounting is saving time. By outsourcing key accounting responsibilities, like billing and invoicing, running financial reports and our personal favourite—filing tax returns—you’re essentially freeing up time to focus on other things. Of course, this means doing the research to find a reputable accounting firm or accounting professional that can do the job well.

Get More Hours Back In Your Day

Everyone complains about not having enough time, including small business owners. As a business owner or founder, would you rather spend your time completing reconciliations of credit card statements or selling to drive up revenue? The finite time that you spend doing accounting could be better allocated to activities like networking or acquiring funding.

At the end of the day, choosing outsourced accounting doesn’t have to mean employing a huge team of accounting experts. If you run a really small business, you could hire a single third-party resource to take over accounting tasks. An alternative is to leverage accounting software, like Kashoo, to streamline your double-entry accounting so that you can focus on running the core aspects of your business.

Minimize Financial Errors

Making financial reporting mistakes is easy as a small business owner because generally, you’re not an accounting or finance expert. Small mistakes can turn into full-fledge issues though when it comes to accounting. It can leave you overpaying in taxes or worse, underpaying—which will create alert the IRS or CRA in which you’ll get fined. As a growing small business, outsourcing important work like accounting and having experts on your side can add a layer of protection against these issues.

Much Easier to Scale

As your business grows and changes, your accounting needs will probably change as well. It may not be possible or ideal to create a full-fledged internal accounting department. If you outsource to a flexible partner, like a CPA, you won’t need to and this individual can grow and scale with you in whichever way that works for your business.

I don’t want to outsource accounting—now what?

Outsourcing your accounting is a strategic choice you make for your business, but it’s not the only way. Ultimately, the right choice for you should depend on a myriad of factors like your budget, how important security is for your financial data, and your future accounting needs.

If outsourcing accounting to experts isn’t the path for you, there are other ways. These include:

Hiring a Full-Time Employee

Security cannot be understated when it comes to financial data. Your balance sheets, financial statements and cash flow are all highly sensitive data. It’s data that you want to keep to yourself, or someone internal. If outsourced accounting isn’t for you, consider hiring a full time employee instead. Costs tend to be higher in this case. But, you’re more than likely to have peace of mind working with someone who’s on your side—who’s a part of your business.

Leveraging Accounting Tools Instead

Some small business owners prefer a DIY-approach. After all, if you’re learning everything else by yourself, why wouldn’t you do the same for accounting? Instead of working off of spreadsheets, leverage accounting software instead. Many accounting tools in the market today offer a self-serve approach by putting you at the driver seat of your finances. From seeing a birds-eye view of your finances to invoicing/billing and running financial reports in seconds, a DIY approach is certainly possible!

This approach is ideal for small business owners who prefer to be in control of their finances and have less of a budget overall.

Work with Qualified Professionals Through Our CPA Program

Have you still chosen outsourced accounting after reading this entire article? Well, then we’ve got you covered. Here at Kashoo, we have a network of qualified CPAs who specialize in offering accounting services for DIY small business owners like yourself. It never hurts to get a bit of professional guidance.

With the right third-party professionals, tools and know-how, accounting should no longer feel like a chore. Whichever approach you choose for your small business, Kashoo can help you out.

Contact us about our CPA Program or try our 14-day free trial today! And if you’re just starting out and looking to send an invoice or two, be sure to give TrulySmall Invoices a try.

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