For those companies that are not fortunate enough to have properly trained accounting personnel, looming financial landmines may not reveal themselves until after the damage has been done. Reliable, timely and relevant financial information is crucial to knowing if what you are doing is working.
Here are a few questions to help you decide if it’s time to outsource your accounting:
If your company engages an independent CPA to perform a financial statement audit or a financial statement review, then you have the benefit of a “second set of eyes” to alert the company to potential discrepancies or deficiencies. These services also entail analysis of financial activities that could reveal negative trends to be aware of. However, if you don’t have anyone else to analyze or review your books, you could be missing critical data necessary to properly present the company’s books to management, owners and others.
Growing companies can place tremendous strains on all existing resources. One such strain will come from the need to hire and train additional employees for all positions. Delays in hiring can hinder a company’s ability to grow as routine tasks become overwhelming for existing employees. Outsourcing your accounting alleviates the need to worry about additional accounting staff, which is often one of the last departments to get attention. Outsourcing your accounting provides the flexibility to scale up or down quickly to respond to the changing needs of the company. This frees up the human resources function to focus on operational and field personnel, which can further enhance the growth of your company.
Outsourced accounting services are much more affordable than internal accounting staff.
In addition to their full-time salary, companies save on insurance, vacation, and other employee benefits. Outsourced accounting also doesn’t “take time off” so there would be no need to either hire a temporary replacement or redirect other people to fill in when critical accounting personnel are not there. To the contrary, existing personnel can be redirected to other supporting functions. There also will be no need to invest in updated software or other tools that internal accountants may need. Accounting firms will have the updated tools at a fraction of the cost. These salary savings can then be re-deployed to hire an estimator or a project manager rather than a bookkeeper
The lifeblood of a construction company is their backlog. And the heart of the company is the current pool of work in progress (WIP). It is critical to have an accurate, up-to-date WIP schedule to evaluate jobs progress, changes in profit margins and what the current backlog balance is. This is an area of neglect for many construction companies, either due to inexperience or lack of adequate resources and is a blind spot that serves as an Achille’s Heel to a construction firm. Accounting firms can provide a team of experts that get the critical financial information updated timely, which is critical when fading profit margins on jobs are happening. This in turn will lead to more effective and responsible financial decision-making. Additionally, an outsourced accounting service can lend extra credibility to a client’s financials when furnishing them to creditors, a bonding company, or in bids on some jobs. Hiring an outsourced accounting service will enable business owners to focus on growing their company while providing peace of mind and confidence to make the necessary financial decisions.
Let’s face it – hackers are always looking for the next business owner that they can exploit for their own gain. Internal system crashes and other IT failures that cause data loss are another risk that most business owners face. Many businesses simply cannot invest the resources to adequately safeguard their financial data, while maintaining adequate backups. Outsourced accounting services, especially those belonging to premiere accounting firms, employ security systems and protocols that are more advanced than the average business. Maintaining the security and confidentiality of clients’ information is also a high priority for accounting firms. Enlisting in an outsourced accounting service will provide greater security, access control, confidentiality, data backup, and significantly more internal controls to protect a business’s financial information and can reduce the likelihood of being exploited by hackers.
Is there an employee in the company that is so critical to your accounting function that their extended absence would leave the company without the ability to keep the books up to date? Outsourced accounting virtually eliminates the risk of a loss of key accounting personnel. Outsource firms can also provide significantly more efficient accounting processes since they are done by accountants possessing formal training and the experience to get it right quickly every time.
Companies frequently find that outsourced accounting reduces the time it takes to close books, whether monthly, quarterly, or annually, and they can develop improved standards to meet regulatory or other reporting requirements. Management also benefits from having reliable, relevant financial information to use to make critical business decisions. The latest accounting software and tools, accounting procedures, knowledge of GAAP, and expertise can increase efficiency, reduce costs, and position a company for strength, growth, profitability and stability.
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