Outsourcing: A Cliché or Sound Business Advice
“Do what you do best, and outsource the rest.” You’ve probably heard this cliché before, but have you heeded its advice? As a business owner, it can be key to your growth.
Before we examine the “why” of outsourcing, let’s start with the “what”. Outsourcing is simply hiring someone outside of your company to perform a task or service essential to the operation of your business. You can outsource everything from the HR function to the marketing function to the sales function. Probably one of the most commonly outsourced functions is the accounting function. Why? Because if your books aren’t done correctly, you can end up in hot water with the IRS.
Unshouldering a Burden
A consultant, from the northwest part of the Twin Cities we recently spoke with, said that she thought that, as a one-person shop, she was too small to outsource her accounting work. She also said she dreaded the end of the month when she had to enter all her expenses, run invoices, and then try to balance her books. Although she was using a popular bookkeeping software program, the process was never crystal clear, and in the back of her mind, she was always wondering if she’d entered things correctly.
After procrastinating on her bookkeeping tasks one too many times, she decided to try outsourcing. The consultant, who considered herself a Jackie-of-all-trades, said it was the best investment she’d made in a while. She didn’t realize how much time she’d been wasting wandering through the software and scouring the internet for answers to her questions. After shifting the burden of accounting to someone else’s shoulders, she said she felt like a physical weight had been lifted and that she could now give more attention to other parts of her business.
Why Outsourcing Makes Sense
The reasons to outsource your financial functions far outweigh the reasons not to outsource. The most common (and usually the only) reason we hear for not outsourcing is that it’s too expensive. On the surface, it may seem so, but when you take a closer look, you’ll see it’s an illusion. Yes, you’re adding an expense, but it’s what the expense is offsetting that is often overlooked. Not only do you free up your time, but, by outsourcing, you get an expert, someone who knows what they’re doing.
They actually enjoy working with numbers. They can usually do the work faster and more accurately than you can. And really, you’re not just getting access to one person, you’re getting access to the expertise of the team of accountants and other financial professionals who support them. You’re also getting access to the top tools of the trade. Because accounting is their focus, they often employ tools and systems that most other businesses don’t have. When you add up these factors, you’re getting a terrific return on your investment.
Outsourcing Can Be a Key to Business Growth
When it comes to business growth, outsourcing can be a powerful secret weapon. In addition to the benefits mentioned earlier, outsourcing gives you access to an arsenal of experts, from the tactical to the strategic. If you want to make the move from small business to medium-sized business, you need a master of all things financial as it relates to your business to guide you.
You need a management executive, who can oversee the preparation of your financial statements, and advise you on the financial implications of the moves you plan to make on your growth journey. Many times, the perspectives your outsourced expert brings can even help you uncover operational efficiencies along the way. And, you utilize their expertise for only as long as you need them. Outsourcing allows you to scale up and down quickly. This means you aren’t adding long-term payroll expenses, at least until it makes sense for you to do so.
Outsourcing financial functions is also a good way to ensure coverage when your own financial staffers need to be out on extended leave. The hand-off here is even smoother when the outsourcing firm is already familiar with your business.
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