Even if you find your business financials completely overwhelming (or just plain boring), you recognize that you need a pulse on them to make sound decisions. The question is: Should you hire an in-house solution, or should you outsource your accounting?
Perhaps you’ve already outsourced the bookkeeping portion of your accounting as a kind of middle ground. If so, it probably didn’t take long for you to see that hiring a bookkeeper could only get you so far. Your business is growing, and you have more significant questions about your financials. More significant questions like:
- Which of our clients are most profitable?
- Which clients deliver the most revenue for our business?
- Why don’t our numbers reflect how busy my team is?
- How much does it cost to keep our lights on every month?
- Should I keep growing my top line or should focus on improving our profitability?
Here’s the big picture: the bookkeeping solution that got you to where you are can’t get you to where you want to be. As your business grows, so should your accounting solution.
Your Bookkeeping and Accounting Solution Must Keep Up With Your Business Growth
There comes a point in your business when you evolve past simply record-keeping. Your opportunities are bigger and so are your risks. At this juncture, you’ve spent years building your client roster and your reputation. One bad accounting decision could put all your hard work on the line.
To offset this risk, you need help interpreting all your accounting data. You need to ensure your performance matches not just where you think it is, but where it should be.
You need to switch from a generalist bookkeeping solution to a specialist outsourced bookkeeping and accounting solution when:
- You’ve grown to $1M in fee-based revenue or more
- Your payroll has grown to 8-10 employees
- You struggle to keep up with day-to-day tasks and meeting your larger business goals
- Your firm isn’t big enough to hire an in-house solution that has the experience you need
Five Benefits of a Specialized Outsourced Accounting and Bookkeeping Team
1. Agency and Professional Firm Experience
When you outsource your bookkeeping and accounting to a company with agency and professional firm experience, you set your business up for peak performance. These companies are familiar with your technologies, your industry nuances and benchmarks, and how firms like yours keep more of the money they make. Agency experts also understand your competition and which levers to pull to establish yourself in the marketplace.
An outsourced team will generate reports specifically designed for businesses like yours, with all the information you need and none of the information you don’t. Things like staff cost ratios and revenue per full-time employee, what you invested in your clients vs. what you got paid from them, and how billable your team is. Armed with timely and insight driven reporting into your performance, you make decisions more quickly and confidently, increasing your probability of a steady bottom line.
2. You Get Your Time Back
Most small agency owners don’t have enough hours in the day to be owners in addition to CFOs, financial analysts, controllers, and occasional bookkeepers. An outsourced solution can wear all these hats and more so that you can devote yourself to the work that demands your attention.
3. Outsourced Accounting Teams Cost Less Than Hiring Multiple In-house Solutions
Most small firms that can’t afford an experienced finance team generally settle for an entry-level accountant and a tax accountant. However, high-potential firms in the $1M – $3M revenue range could benefit from so much more.
The reality is most mid-level accountants with five years of experience cost $75-$100k a year. Layer on some fractional financial leadership at $1,200–$1,500/day, and you’re looking at a prohibitively expensive, six-figure investment. An outsourced accounting solution is much more economical: a solution like Finally provides you with a variety of accounting roles at a fraction of the cost.
4. An Outsourced Team is Efficient
Most outsourced accounting solutions operate on a fixed price model for a defined suite of services. There is nothing in their economic model to find the longest way to the finish line. Conversely, these specialized agencies are motivated to deliver exceptional value to the client to protect themselves from being replaced by a competitor or an in-house solution. It’s a symbiotic relationship where the interests of the agency and the accounting partner align.
Outsourced firms also improve your business’s processes and controls. They:
- Gather and store all documents in the cloud for easy access
- Integrate specialized platforms for accounting, payments, project management and financial reporting. (No more spreadsheet graveyards with conflicting entries and estimates.)
- Provide financial reporting that connects data from multiple systems. This gives you a holistic understanding of how utilized your team is and which clients contribute the most revenue.
5. Risk Mitigation
Often the biggest threat to consistent, streamlined operations is lack of redundancy. An outsourced team ensures your firm will never miss a beat if a member of your firm resigns or takes a vacation.
An outsourced team also protects your firm against fraud. Although rare, it’s easy enough for a single-solution accountant who has access to all your personal and financial information to misappropriate funds. With an outsourced solution, multiple personnel are responsible for the accounting for your organization, with best-practice accounting controls considered as part of their delivery. You can rest easy knowing that our remote team has checks and balances in place to protect you from worst-case scenarios.
Could your firm benefit from outsourcing your accounting services?
At Finally, we’ve spent our careers working inside private and public agencies, leveraging this experience to build bespoke bookkeeping and accounting solutions for creative shops. We love working with firms that are ready to prioritize their financial success.
Think we would make a good team? Give us a shout.