Are you a startup entrepreneur just learning which services you will need to run your business more smoothly? The trend today is to outsource many of the tasks not related to your company’s core competency – that is, the activity that will ultimately drive revenue and grow your company - or, the reason you started your business in the first place. This includes outsourcing everything from marketing and design, to sales, IT, and administrative tasks.
Should you invest the money in outsourced accounting services to simplify business processes related to bookkeeping and finance? Let’s look at five ways hiring an outsourced accounting service can help your startup business.
1. The right accounting service can help you build good business habits from the start.
Too many startup business owners neglect bookkeeping, and then panic when tax time comes, because their “bookkeeping files” are actually a shoebox full of receipts. (Or, if they are extremely tech-savvy, a Dropbox folder of receipt scans.)
If you become accustomed to working with a bookkeeping service from the start, you’ll develop good business habits that will make it harder for future employees to steal from you, help you keep tighter reins on expenses, and always know where your company stands, financially, with accurate and up-to-date bookkeeping records. Plus, a good accounting service can teach you the "Hows" and "Whys" of bookkeeping so you understand what is happening every step of the way. (It is your financial data after all).
2. Your bookkeeper and controller can provide the information and analysis you need to seek investment capital.
Whether you’re applying for a hard-to-get small business loan or seeking funding from angel investors or venture capital firms, accurate and up-to-date bookkeeping, along with clear and insightful financial statements, could mean the difference between getting the money you need so your business can grow or having to call it quits very early in the game.
Accounting services will provide you with the up-to-date bookkeeping records and financial statements you need, along with explanations of the data in those financial statements, which can help your company shine amidst all those other small businesses that are not as prepared.
3. Your bookkeeping and controller service can help you determine your burn rate.
Do you know your company’s burn rate? This is, in short, how much money you are spending and how long, if you continue spending at that rate, you’ll be able to stay in business. This is important to know, especially if you’re a tech startup or another early stage company with a long lead time before you’ll start generating revenue from sales.
4. Your outsourced accounting service will provide advice you can trust in your company’s crucial first years.
The right accounting and bookkeeping service is more than just a data entry provider or QuickBooks operator. Good controller and bookkeeping services offer advice, counsel and insight -- providing you with financial statements, budgets, forecasts and dashboards to monitor all your financial data. It’s one thing to have all the financial data you need to run your business. But the real benefit is to have someone to explain exactly what the financial statements mean, and help you to make the decisions that will steer your company toward growth.
5 . Outsourced accounting, bookkeeping and controller services can scale with your company's needs.
Today's startup may be tomorrow's Fortune 1000 company. Starting off with the right accounting and bookkeeping service means ensuring the service can scale to your needs. Perhaps now you simply need monthly service to reconcile and close your books--but you may need comprehensive daily services down the road. Instead of having to manage a major transfer from a single part-time in house bookkeeper to an outsourced accounting service later, start with a service that can handle all of your needs now and later.