8 Ways Outsourced Accounting Can Help You Grow Your Business
Posted by Team QXAS
on 04 March, 2020
It is easy for a qualified CPA to open up a firm and start offering professional services. But as success comes its way and it starts growing, it becomes difficult for the CPA to manage everything on his own.
Accounting occupies a large part of the services offered by the CPA. Outsourcing the same is an excellent option to adopt especially when there is a seasonal increase in its workload. In fact, outsourcing accounting is also a cost-effective and affordable option which also enables the CPA firm to offer excellent services to its clients by:
- Saving money that can be reinvested: Choosing to outsource accounting eliminates the cost of employing a full-time accountant. This is actually beneficial for the firm since the employment cost is significantly high considering the salary, fringe benefits, payroll taxes, equipment and furniture, space etc., that need to be provided. This money can be reinvested in the firm to enable the growth of either specific areas or the business as a whole.
- Enabling Scalability: For a CPA firm to succeed, it needs to scale up else it will start losing business to competitors. In order to be able to achieve growth in an already extremely competitive market, a CPA firm needs to outsource its accounting responsibilities so that they are able to concentrate on other critical areas which need immediate attention.
- Promoting good business habits: This directly translates into paying attention to the relevant details like compliance with statutory laws, implementation of best practices etc. For accounting, these details are even more important since the operation of the client businesses is at stake. Thus accounting for all individual clients has to be done on a daily basis which at times gets neglected because of the wider scope of work which the CPA is involved in. However, outsourcing accounting promotes good business practices by ensuring that individual client accounting is kept up to date.
- Facilitating Business analysis: The health of a business can be easily analysed when there is availability of timely updated, accurate accounting information. This consistent stream of timely financial data along with the already available non-financial data helps a CPA to take strategic decisions easily.
- Determining the burn rate: This is a very important aspect of any business for it determines the rate at which a CPA firm burns its resources. In business parlance, this directly translates into cash and understanding the burn rate helps the CPA to understand how much capital a client business should have and how long it can last on the current capital available.
- Offering unbiased advice: There are times when the CPA is not able to look into all the details regarding the accounts of a particular client. But because he is the financial advisor, he needs to have an impartial snapshot of the important details which can be easily obtained by outsourcing accounting since the outsourced third party firm is able to give details in an unbiased manner.
- Helping in record maintenance: Outsourcing accounting ensures that all the relevant financial reports are kept up to date and easily made available when required. These reports play a very important role in conveying the health of a business to potential lenders and investors. Thus in times of need, the outsourced firm can easily provide details and financial reports as per the client’s requirements.
- Gaining access to good software: Accounting methods and software used for accounting purposes might be different for different clients and it might not be feasible for the CPA firm to have all the different types of software used by their clients. On the other hand, an outsourced accoutring firm just concentrates on accounting and is more likely to have the same. Thus the CPA is able to gain access to many different types of software by outsourcing accounting.
Outsourcing accounting is thus extremely beneficial and conducive to the growth of a CPA firm and this option needs to be utilised on priority.