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THE PROS AND CONS OF OUTSOURCING YOUR FINANCE AND ACCOUNTING SERVICE

March 24, 2021
 
We preach about the importance of the cash flow forecast. It really is the best way to grow your business profitability, help with strategy and reduce your stress.
 
If you don't have one, you need to get one. And who should be responsible for overseeing it? It depends on the size of your business. Yes, size matters!
 
In large companies, a CFO is responsible for the cash flow forecast. Smaller companies may rely on a controller or even a bookkeeper. Many entrepreneurs manage it themselves, unfortunately. And some companies decide to outsource the finance and accounting function.
 
Is outsourcing right for your business? It's up to you. But here are a few things to think about:
 
The Pros of outsourcing your finance and accounting:
 
  • Increase your capacity - Fast growing businesses require all hands on deck. Expanding departments like accounting can be complicated and use previous time that could be spent on other tasks.
  • More time to focus on your strengths - Everyone has their strengths. For some entrepreneurs, innovation and drive for success make it hard to focus on the bottom line. Outsourcing can help to keep you focused on what you are best at doing.
  • Books are done "the right way" - Most entrepreneurs start out managing the books because they think it's the only way to understand cash flow. They hang onto it longer than they should, and about 100% of the time the books are wrong. Outsourcing to a professional decreases your risk and minimizes mistakes.
  • Saves you money- Rather than hiring an employee and the extra expenses that come with that, you can save money by using an outside accounting firm. The firm can determine what services you need and can afford, and can even save you operational costs with regular audits.
 
The Cons of outsourcing your accounting:
 
  • Lack of business understanding - If an outsourced accounting or finance professional is not working in your business regularly, they may not have a true understanding of your business, your challenges and your opportunities.
  • Less day-to-day control - Though weekly and monthly meetings are standard with outsourced accounting teams, some entrepreneurs want the ability to discuss day-to-day operations and decisions with their financial team. Outsourcing gives up some of the control you have.
  • Strain on trust - Outsourcing can make some employees wonder about their own job security. If can impact the overall culture of the company. If you decide to outsource, ensure communication with your employees about the process, and exactly how it will affect their day-to-day.
 
For some business owners, the benefits of outsourcing accounting services outweigh the potential surprises the relationship can bring. For others, keeping the financials inside the company brings them peace of mind, and allows them to keep their operations local.
 
Do you outsource your finance and accounting functions, or handle it internally? Would you recommend it to a colleague? Share your experience on Facebook, Twitter and LinkedIn!


INDEX
  • THE COVID-INSPIRED SPIKE IN ENTREPRENEURIALISM
  • THE PROS AND CONS OF OUTSOURCING YOUR FINANCE AND ACCOUNTING SERVICE
  • HOW TO SET GOALS IN 2021
  • THE LEADERSHIP EVOLUTION OF YOUR BUSINESS
  • HOW TO GET THE MOST OUT OF YOUR ADVISORY BOARD
  • THE PANDEMIC-INDUCED INNOVATION OF MEETINGS
  • HOW TO USE THE 8 P'S OF MARKETING TO GROW YOUR BUSINESS
  • BEST PRACTICES FOR COLLEGE FINANCING
  • SCALING A BUSINESS - ARE YOU READY?
  • THE HALFWAY POINT: IT'S TIME TO REVISIT THOSE BUSINESS GOALS
  • GROWTH WITH PURPOSE: SUCCESSION PLANNING
  • GROWTH WITH PURPOSE: EVOLUTION OF FAMILY LIFE
  • GROWTH WITH PURPOSE: FINANCIAL RISK
  • GROWTH WITH PURPOSE: INTEGRATION
  • GROWTH WITH PURPOSE: WHY ARE YOU GROWING YOUR COMPANY?
  • GOAL SETTING 2020: HOW TO KEEP YOUR GOALS FRONT AND CENTER ALL YEAR LONG
  • ASK GERBER: HOW TO STAY LASER FOCUSED DURING THE HOLIDAYS
  • Ask Gerber: How to Identify Your Business's Culture When You Don't Think You Have One
  • Ask Gerber: When Should I Hire a Professional Manager?
  • Ask Gerber: Should You Mix Business with Friendship?
  • ASK GERBER: HOW DO I ESCAPE THE ENTREPRENEURIAL SLUMP OF FEELING TRAPPED IN MY BUSINESS?
  • ASK GERBER: HOW CAN ENTREPRENEURS CREATE SHARED EXPERIENCES WITH THEIR CHILDREN?
  • Ask Gerber: How Can I Recognize Permanent Failure as an Entrepreneur?
  • Ask Gerber: How Can I Recognize and Overcome Temporary Failures?
  • ASK GERBER: HOW DO I HELP EASE EMPLOYEE STRESS DURING BUSY SEASON?
  • ASK GERBER: DO I NEED TO HIRE HR?
  • ASK GERBER : DO I NEED A CEO?
  • ASK GERBER: DO I NEED TO HIRE A COO?
  • ASK GERBER: DO I NEED TO HIRE A CMO?
  • ASK GERBER: DO I NEED TO HIRE A CFO?
  • ASK GERBER: HOW DO I KEEP PASSION AND PROFITS TOP OF MIND IN MY BUSINESS?
  • ASK GERBER: WHY DO I NEED TO INVEST IN HOSTING AN ANNUAL RETREAT FOR MY TEAM?
  • ASK GERBER: HOW CAN I ENGAGE WITH MY CLIENTS/PROSPECTS WITHOUT BREAKING THE BANK?
  • ASK GERBER: WHAT IS A CLIENT SERVICE MATRIX? PART DEUX
  • ASK GERBER: WHAT IS A CLIENT SERVICE MATRIX? PART ONE
  • ASK GERBER: THE HIRING PROCESS. WHY IS IT SO DAMN HARD?
  • ASK GERBER: WHY IT'S IMPORTANT TO KNOW AND GROW YOUR COMPANY CULTURE
  • ASK GERBER: HOW DO I ACHIEVE THE WORK/LIFE BALANCE AS A BUSY ENTREPRENEUR?
  • ASK GERBER: HOW DO I PREPARE MY FRIENDS FOR LIFE AS AN ENTREPRENEUR?
  • ASK GERBER: FIRST GENERATION ENTREPRENEURS AND BUSINESS EXECUTIVES, HOW ARE THEY DIFFERENT?
  • ASK GERBER: I PUT SO MUCH OF MYSELF INTO MY BUSINESS THAT I WORRY I AM FALLING SHORT AS A SPOUSE AND PARENT. WHAT CAN I DO?
  • ASK GERBER: ARE CHILDREN OF FIRST-GENERATION ENTREPRENEURS MORE LIKELY TO BE SPOILED?
  • ASK GERBER: WHAT'S YOUR STANCE ON REMOTE ACCESS FOR EMPLOYEES?
  • ASK GERBER: WHEN DO I NEED TO HIRE AN ADMINISTRATIVE ASSISTANT?
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