Signs It’s Time to Outsource Your Accounting

Many small business owners try to handle all aspects of their business, including accounting and bookkeeping. While admirable, this often leads to mistakes, frustration, and wasted time.

If you find yourself struggling with the financial and accounting side of running your business, it may be time to outsource these tasks to an expert. In this blog post, we will share and discuss five key signs that indicate it’s time to hand over your accounting to professionals.

5 Signs It’s Time to Outsource Your Accounting

1. You’re Making Errors in Financial Statements and Reports

According to research, about 60% of small business owners are not confident in their ability to produce accurate financial reports. As your business grows in complexity, it becomes increasingly difficult to generate precise financial statements without proper training.

Signs you may be making reporting errors include:

• Inaccurate profit and loss statements that don’t match your business activity
• Balance sheets that don’t balance
• Problems identifying source documents needed for taxes
• Spending too much time trying to correct mistakes

Catching and fixing reporting errors is time-consuming. Outsourced accounting specialists have the expertise to compile reports accurately the first time.

2. You’re Missing Tax Deductions and Credits

The tax code offers a plethora of deductions and credits to benefit small businesses, but many owners miss these opportunities. According to the IRS, in 2019, over $131 million in unclaimed deductions were left on the table by small business taxpayers.

Reasons include:

• You lack expertise in complex tax regulations
• Researching deductions is overly time-consuming
• You simply don’t know what tax breaks exist

Accounting professionals are trained in enhancing your deductions and credits each quarter and tax season. Identifying these opportunities can save you significant money.

3. Your Books are Disorganized

For 58% of small business owners, organization is one of the biggest pain points when handling their own accounting.

Signs your books are out of order include:

• No system to upload receipts or track expenses
• Important documents and previous years’ tax returns misplaced
• Too many software programs that don’t integrate
• Incomplete transaction and inventory records

Disorganized books lead to many downstream problems, including inaccurate reporting, missed write-offs, and accounting headaches at tax time. Outsourcing creates streamlined systems so you can find documents easily.

4. Accounting Tasks are Overwhelming

Small business owners wear many hats. For over half of them, accounting duties are excessively demanding compared to other responsibilities.

Telltale signs that accounting errands have become overwhelming include:

• No time for higher-level analysis with excessive data entry
• Payables and receivables chronically behind
• Payroll mistakes impacting employees
• Procrastinating accounting work due to stress

Bookkeeping and financial work for a business can easily become a full-time job. Outsourcing transfers essential but time-consuming accounting errands off your plate so you can focus on generating revenue.

5. You Want to Focus on Growth

Perhaps your accounting methods are sufficient but still eat up too much time you’d rather invest in strategic planning and business development.

Signs it’s the right time to outsource accounting so you can prioritize growth initiatives include:

• No bandwidth for identifying new revenue streams
• Current accounting takes too much time away from customers
• Inability to project future cash flow needs for expansion opportunities

Outsourcing accounting and finance is an investment that gives back time and brain space. It’s often a smart long-term move to enable faster growth.

The Takeaway

If one or more of these five scenarios describes your current small business situation, outsourced accounting likely will benefit your company’s profitability and operations. Professional accountants handle time-consuming accounting, taxes, payroll, reporting, and more so you can get back to higher priorities driving your business forward. Consider if outsourcing makes sense for your growth goals this year.