Outsourcing Small Business Accounting
Many small and medium sized business owners may not understand the importance of preparing and managing financial accounts. They usually have little knowledge of the financial state of their business and are not aware of the benefits of managing financial records.
One of the complications of not continuously managing the financial accounts is cash flow. If cash isn’t available in a business, the business plateaus, and that often means jobs get cut, advertising and promotion budgets get cut, service levels drop, customer service standards drop, and customers look elsewhere for products and services. So cash flow is a NECESSITY in business.
Outsourcing is one of the greatest resources for small to medium sized businesses, because it offers a cost-effective solution and access to the same level of expertise as larger businesses, but at a fraction of the cost. The advantages to outsourcing are that it allows a business owner to focus on core activities and gives him/her access to professionals for everything else.
For most small businesses, the owners spend between 4-6 hours a week [on average] doing the administration and bookkeeping requirements, because their needs don’t justify the services of a full-time person to complete the work. This is not usually a core competence for the business owners, so if they outsourced it, it would probably take a professional bookkeeper 1-2 hours a week.
If the business owner was freed up an extra 3-4 hours a week, they could focus more effectively on either managing their business, or charging themselves out for work. The value they achieve with this extra time exceeds the cost of outsourcing the work, resulting in cost savings.
In summary, outsourcing allows small and medium sized businesses access to large business resources at a small business budget.