Taking care of your startup’s accounting functions in-house can not only be a headache but a time-consuming task that eats up a lot of your resources.
Whether it’s payroll, accounts payable, accounts receivable, credit card reconciliation, inventory and budget reports, bank reconciliation, or payroll reconciliation, accounting can often be too much for the small startup to handle.
How do you know you need help? Here are five signs it’s time to outsource accounting.
#1: You Have No Time Left for Strategy
If you’re spending too much time in your back office taking care of daily accounting needs, it’s time to find some help.
You don’t want to be tied up with these mundane tasks, so you don’t have any time left to focus on your business strategy and goals. Your focus should be on growing your business not accounting.
An outsourced firm can help you manage all of your day to day bookkeeping activities as well as provide you with key performance indicators and help you move your business forward.
#2: Your Books are Messy
Do you feel like you’re drowning in time cards, invoices and receipts? Are your books a mess, and your bills overdue?
If you’re way behind in your bookkeeping and you can’t even pull a profit and loss statement for investors on demand, you’re in big trouble.
#3: You Lack Internal Controls
It’s quite common in startups to have one person in the company in charge of writing checks, cashing checks and reconciling the bank accounts.
While you may trust the person you have doing this, you may lack the internal controls necessary to safeguard your business. In essence, you’ve opened yourself up to fraud.
If you have one person handling your accounts payable and accounts receivable, it would be very easy for that person to take advantage of your startup, especially if you’re too busy to pay much attention.
By outsourcing your company’s accounting, you immediately set up an internal control process that protects your startup.
#4: You Have Cash Flow Issues
Money comes in, and money goes out. Do you have a handle on your cash flow?
Many startups fail to send invoices in a timely manner for products sold or services rendered. This causes cash flow issues that can undermine your startup.
If you have no cash flow, you can’t buy what you need to create your products, hire personnel, purchase equipment or upgrade technology.
Yet, if you have an outsourcing company working for you, you can be sure that your invoices are being sent in a timely manner, so you don’t lack cash flow.
#5: Your Business is Growing
A growing startup is a remarkable thing, but with growth comes more customers, more revenue, more employees, more invoices, and the need for added financial reporting.
This growth means success for you, and it’s high time you add some accounting help.
Not only can an outsource company help you manage your growth, but they can also make sure you have statutory compliance when it comes to city, state and federal laws.
In addition, if you ever need audit support as you grow and move through the years, your outsourcing company can assist.
Take a good look at how much time you spend balancing accounts, signing checks, sending and paying invoices and chasing down late payments. Compare this to the amount of time you actually spend growing your company and working with customers.
As the startup owner, you don’t have to take care of the back-office business. What’s more, you need to have your books up to date, and you need to have access to reports and more, so if you’re too busy to do it, let someone else take over.
An outsourcing company can help you take care of all the things mentioned here, and it makes good business sense for many startups to outsource accounting.
Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.