A bearded man in an orange button-up shirt sits at an open laptop and looks down at an open notebook with concern. With one hand, he holds the tip of a pen to the side of his head, as if scratching his head in confusion. In his other hand, he holds a small index card. In the background is a white minimalist room with two white bookcases and a table holding a vase of white flowers.
If you and your team lack the financial expertise needed to successfully handle your company's accounting, it may be time to consider outsourcing. — Getty Images/Ridofranz

The process of managing small business finances can be time-consuming and challenging, from projecting cash flow and staying on top of monthly account reconciliation to preparing for tax season. Outsourcing these tasks to a reputable accounting services company at the right time can alleviate this burden while saving you valuable time and resources.

“Outsourcing allows the business owners to focus on … running their business,” said Jana Kelly, CPA, Finance Transformation Partner at Crowe. “With the added time, a business owner might be able to expand to a new market, enrich market opportunities, or even explore the design of a new product which will ideally lead to greater profitability.”

[Read more: Which Type of Accounting Service Do You Need?]

Is it time to outsource your accounting?

As with any outsourcing decision, the right time to delegate your accounting tasks to an outside firm depends on your business circumstances, challenges, and budget. One clear sign to consider outsourcing your accounting is if you’re struggling to get quality financial information in a timely manner, said William C. Watts, Finance Transformation Managing Partner at Crowe.

“Timely reporting leads to an ongoing understanding of the tax position of a company, which will help the business stay compliant and avoid potential penalties,” he added.

Whether you lack the time or qualified internal resources to manage accounting in-house or your business is growing faster than you can track financial changes, not getting the information you need, when you need it can make it challenging to run your business effectively. Here are four other key indicators that it may be time to offload your accounting tasks:

1. You want to save time and money

Startups and small businesses can save a lot of time by letting an outsourced provider handle routine financial tasks, such as accounts payable and accounts receivable, Kelly told CO—. Outsourcing also eliminates the added expenses of in-house teams, such as payroll taxes, benefits, equipment, training, and office space.

“[An outsourced] provider can create efficiencies and perform the work more efficiently, and therefore can be more cost-effective,” said Watts.

2. You’re worried about employee fraud

Sometimes, internal accounting roles may leverage their access to steal from their employer. A trustworthy outsourced firm can help alleviate this concern.

“Much of the accounting fraud in a business is never reported to the police, [so] bookkeepers and accounting staff often move from job to job without being detected,” Kelly said.

3. You want access to the latest technology

The advanced, enterprise-level tools many outsourced accounting firms use can help level the playing field for your business while also saving you money and enhancing efficiency.

“An outsourced provider will shoulder the costs of the latest technology and applications, saving the business the chore and expense of implementing the technology themselves,” Watts said.

4. You need deep financial expertise and connections to other professionals who can help you run your business better

Outsourcing provides you with access to specialized knowledge and highly trained professionals who can bring best practices to your business. A good accounting partner can also connect you with other professionals and vendors who can help you grow your business.

“[Our clients] appreciate that we have a vast network at our disposal to connect them with someone who can give them advice without having to go and directly hire individuals,” said Kelly.

[Read more: Accounting Basics Every New Business Owner Should Learn]

[An outsourced] provider can create efficiencies and perform the work more efficiently, and therefore can be more cost-effective.

William C. Watts, Finance Transformation Managing Partner at Crowe

What to look for in an outsourced accounting firm

As you evaluate accounting service providers, Kelly and Watts advised considering the following factors to find the best fit for your business.

  • Expertise in your specific industry. Industry expertise and an understanding of the local business climate can make all the difference in the quality of accounting and financial information your business receives.
  • Timely and proactive communication. Because of the timely and complex nature of many business financial questions, an outsourced provider should be communicative, responsive, and available to answer your questions, regardless of their time zone.
  • A strong, positive reputation. The accounting firm you choose should have a tested reputation for providing quality accounting services to businesses like yours.
  • Data protection compliance and best practices. A good service provider will adhere to applicable regulatory and compliance standards, such as the General Data Protection Regulation (GDPR). You should also verify that the provider has security measures in place to protect your sensitive financial data, such as firewalls, access controls, encryption, and data backup and recovery procedures.

Once you’ve chosen an accounting firm, set yourself up for a successful relationship by setting clear goals and expectations and prioritizing frequent communication with your point of contact. Watts advised establishing communication channels and setting up regular meetings to discuss financial reporting, compliance issues, and other relevant business matters.

“Some of the best and most insightful information is often transmitted simply by having regular touchpoints to discuss the business,” he said. “By maintaining open communication channels, a business will likely receive much better service from their provider [and have] confidence that their [provider] is delivering the value the business owner expects.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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