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  • Donna Sovie

7 Reasons Your Small Business Should Outsource Accounting

Updated: May 6

Whether you just recently launched your own business or you’re an experienced entrepreneur with a growing company, there is likely one area that causes you neverending stress and headaches: your accounting and finances.


If you hate dealing with your books and constantly feel stressed about keeping up with things like tax laws, it might be time to outsource your accounting. The concept of entrusting your financials and sensitive information to someone else may be a bit scary at first, but when you find the right fit, it’s actually an investment.


After all, you’re busy running your company. You want it to thrive and hit your goals. Working with an outside expert can help your business reach new levels.


But when should you start outsourcing accounting? And how, exactly, will it help your business?


When should you start outsourcing accounting?


There are many reasons for and benefits to hiring an accountant, but doing so is especially important in the following instances:

  • Writing your business plan: Helps you with financial projections and securing financing or other forms of funding

  • Forming your business: Helps you determine what type of entity your business should be registered as and obtaining the proper licensing (e.g., S-corp, C-corp, LLC, or sole proprietorship)

  • Setting up compliance and taxes: Ensures your compliance when it comes to charging sales tax, running payroll, or issuing 1099s

  • Preparing for an audit: Streamlines your processes and keeps your business compliant (best to have an accountant in place before it comes to this to avoid high costs)


The bottom line: Partner with an accounting firm from Day 1 to set your business up for success in the long run.


7 Benefits to Outsourcing Accounting


1. Reclaim your time.


And get back to working on your passion. Perhaps one of the most important benefits of outsourcing your accounting is the time you get back by removing it from your plate. It allows you to work on growing your business and putting energy into doing the things you love, rather than stressing over your records and things like compliance.


It’s been proven that there’s no such thing as successful multi-tasking. In fact, a study by the American Psychological Association showed that the mental blocks that result from shifting between tasks can cost as much as 40% of your productive time.


You started your business to sell the product or service that you know best, but it’s difficult to be productive when you’re pulled in so many directions. You are the only one who understands your business operations, goals, and the vision the way you do—you should be the one to focus on creating, selling, and taking it to the next level.


The same goes for your employees. You hire each team member for their skills and specialties. It’s not a good use of your time or budget, nor is it beneficial for your employees’ growth, to have them performing bookkeeping responsibilities if that is not their field. Your company will thrive when everyone is allowed to do what they do best.


2. Reduce the risk of error and fraud.


When you or other employees who do not have an accounting background manage critical items like your financial statements and taxes, it opens your company up to risks. Only trained accountants know and keep up with the many tax codes and laws. An outsourced accounting firm will ensure your company is compliant and nothing is missed.


Additionally, the Association of Certified Fraud Examiners 2012 study reported that the most common victims of fraud are privately owned small businesses with less than 100 employees. These are companies that don’t have a CFO or trained accounting team viewing their day-to-day accounting activities. A lack of oversight combined with a lack of separation of duties could lead to small business fraud if the same person is both writing the checks and reconciling the bank statements. A dishonest employee could commit billing or payroll fraud, check tampering, or skimming.


Hiring an experienced accountant puts controls in place and mitigates these risks by ensuring the flow of information into your financial system is valid, timely, and classified properly. There will be no question over the accuracy of your books or the integrity of your financial statements.


3. Gain a team of experts.


Instead of you or another individual in your company stressing and being overworked while managing the accounting, you gain an external team of experts. This also means fewer costly mistakes!


Your outsourced accountant will make sure you pay only what’s necessary on your taxes and maximize your tax returns. There are many loopholes and exemptions available, but these can be difficult for an employee to identify when they are already spread too thin and simply don’t know where to look.


Many accountants even specialize in certain industries and understand the nuances of your business and accounting rules. For example, Check & Balance is experienced in the construction field, which requires job costing and work-in-process accounting.


4. Save money on staffing.


According to Yahoo, the cost-benefit analysis of outsourced accounting vs. in-house bookkeeping can save up to 40% in monthly costs. Once you think about how the average accountant salary was $71,550 in 2019, it adds up. An internal employee typically requires a significant investment of your time and budget for:

  • Salary

  • Benefits

  • Equipment

  • Training

  • Management


With an outsourced accountant, you only pay for the services you need. They are already trained and equipped to get the job done.


5. Get the insights you need to scale your business.


How can you successfully scale your business if you have no idea how it’s performing financially and what those numbers actually mean?


Having accurate financials will help you develop your business growth strategy. You’ll know how to raise your profits and achieve other goals. This will give you the ability to plan your business annually instead of working on a month-to-month basis.


When a professional accountant is in your books daily, they can advise you on where adjustments are needed. They can tell you what all the numbers mean, helping you make informed financial decisions on pricing, overhead costs, and profits. Your outsourced bookkeeper will be able to help you understand and improve cash flow when looking at where to cut costs and where you can afford to invest more.


6. Your accountant can grow with you.


Accounting firms can fulfill all your needs as you grow. Hiring one internal accountant, on the other hand, won’t suffice for long if your company keeps growing.


Many small businesses outsource accounting services after a sustained growth period because managing their books themselves becomes too much. And the bigger you get, the more room there is for errors.


Your outsourced accountant has the strength of a team behind them. They will help you with the financial services your business needs. As you scale your business and your needs grow, your investment with them will be manageable even as it increases. You can then invest the funds that you otherwise would’ve spent on an internal accountant’s salary in other important areas of your business.


7. Access the best tools.


Top-notch accounting platforms get quite expensive for the average small business owner. Your outsourced accounting service has already invested in the best tools so you don’t have to. This technology includes:

  • Cloud-based accounting applications

  • Web-based business intelligence systems

  • Real-time data reporting


This software helps you and your team understand the company’s performance daily. You’ll have access to your records on any device at any time and enjoy detailed financial reports at the click of a button. Your accountant will also educate you on using and understanding the data from this software, so you don’t have to figure it out on your own.


Not to mention, these efficient systems minimize paperwork. Say goodbye to those piles and boxes full of files, spreadsheets, and receipts that have been cluttering your office for years! Ah, sweet virtual organization.


Between the time, money, and stress that you’ll save by outsourcing your accounting, you will start to see a return on your initial investment in no time. If you’re ready to make that investment or explore if Check & Balance Business Solutions is right for you, schedule a free consultation to learn more about how we can help remove this vital piece from your plate!