Is daily accounting slowing your product growth or business expansion? If so, it might be time to consider outsourcing your accounting.
Many startup founders struggle with back-office operations. Accounting software helps, but it’s tricky without the right people or setup. 20% of startups fail in year one often from poor money management. In fact, 82% of startups fail due to cash flow issues, and 30% run out of money.
Hiring a full-time accountant is costly, and managing finances alone often leads to mistakes. Full-time accounting is costly. Outsourcing gives expert help for less.
This blog shows how outsourcing finances helps startups stay focused, cut errors, and grow faster.
Why Startups Should Consider Outsourced Bookkeeping
Bookkeeping is important, but it doesn’t directly grow your business. Time spent on books is time taken from getting customers, improving your product, or building your team. Outsourcing gives you access to expert bookkeeping without the cost of a full-time hire. You only pay for what you need, making it a smart and affordable option.
The global outsourcing market reached $92.5 billion before the pandemic and continues to grow. More startups are turning to outsourced accounting to save money and get expert financial help. With tight budgets, small financial mistakes can cause major setbacks.
Outsourcing offers flexibility. Small businesses can scale up or down as needed, without full-time payroll costs. It also cuts costs like office space, equipment, and benefits.Building an early financial structure helps startups stay on track, avoid money mistakes, and plan for growth. Plus, it saves time spent on hiring and managing staff.
According to Forbes, Outsourcing handles IT, HR, and accounting, letting businesses focus on what matters. 37% of small businesses outsourced, with the market valued at $92.5B (Clutch, Statista). IT and business process outsourcing are the top areas. HR outsourcing saved businesses an average of 27.2% in 2019. Deloitte later found 90% of companies saw cloud computing as key to outsourcing.
Benefits include cost savings, efficiency, and expert access. Risks involve poor communication and hidden costs. To succeed, choose the right tasks and partners, set clear goals, and define roles. Read contracts and prep employees. Outsourcing may hit $731B in 2023, $519B in IT and $212B in BPO.
Benefits of Outsourcing Bookkeeping
1. More Time To Grow Doing your own books takes time away from growing your business. Outsourcing gives you that time back. A small e-commerce business, for example, outsourced its bookkeeping. This gave them 15 extra hours a week to focus on marketing and product development. As a result, they experienced real business growth.
1. More Time To Grow2. Better Focus on Core Goals Without accounting tasks in the way, you can concentrate on your business goals. Outsourcing removes distractions, so you can work smarter. Economist Arthur Laffer once said, “Outsource everything but your core business.” Many startup founders spend up to 40% of their time on tasks like bookkeeping time better spent growing the business.
3. Fewer Errors and More Accuracy Trained bookkeepers help prevent costly mistakes. They work faster and with more accuracy, keeping your finances in order.
4. Access to Financial Experts Outsourcing connects you with experts in taxes, compliance, and your industry’s needs. Most startups lack this level of expertise in-house. As Jagdish Dalal said, “Figure out what you’re good at and what you’re not.”
5. Advanced Tools and Technology Outsourced bookkeepers use modern tools to simplify accounting. No more spreadsheets, organized finances powered by automation and the cloud.
6. Consistent and Reliable Service Vacations or sick days won’t delay your bookkeeping. Outsourced teams meet deadlines and keep your books updated all year.
7. Cost Savings Over In-House Staff Outsourcing costs less than hiring full-time staff. Instead of paying for salaries, benefits, and office space, you only pay for the services you need. A full-time bookkeeper might cost $50,000 annually, but outsourced accounting can reduce that to $15,000 a savings of 20–30% or more. One startup in San Francisco saved over $30,000 a year and used the money to grow their business.
8. No Need to Hire or Manage Staff For small businesses, a full-time hire isn’t always necessary. Outsourcing skips hiring hassles and gives you expert help.
9. Improved Financial Decision-Making Accurate finances lead to better business decisions. With organized books and expert help, you can plan for growth and long-term success.
10. Smarter Cash Flow Management Outsourced accountants help you track income and expenses closely. They spot waste and suggest savings to keep your startup financially strong.
11. Stronger Budgeting and Forecasting Outsourced accountants offer accurate budgets and forecasts. This allows you to plan for the future, avoid surprises, and make data-driven decisions.
12. Increased Trust and Professionalism Clean records make your business look professional and trustworthy. Good financials improve your credibility and help you stand out.
13. Regulatory Compliance Financial rules and tax laws can be complex. Outsourced accountants keep you compliant, reduce stress, and free up time to grow your business.
Why More Companies Are Outsourcing Financial Services
Accounting is vital but it’s also expensive when done on-site. This is especially true for small and medium-sized businesses. Outsourcing gives businesses flexible, affordable financial support. It saves money, time, and resources. You don’t need to buy expensive software or hire and train a full team. Instead, expert services handle your accounting with care and accuracy. You get expert help, stay on top of financial tasks, and avoid common accounting headaches all while reducing your overhead costs.
How to Pick the Right Outsourced Accounting Firm
Finding the right partner is vital. Start by identifying needs like bookkeeping, taxes, or planning. Then seek for companies with experience working with startups.
Ask these questions:
- Are they licensed professionals?
- Can they provide client references?
- Are they familiar with tools and platforms your business uses?
- Do they offer clear pricing with no hidden fees?
A great example is Expertise Accelerated. You can even speak with their CEO, Haroon Jafree, a seasoned CPA. This aid you understand your options and pick the correct path forward.
Conclusion
Before outsourcing, identify the tasks that drain your time and don’t impact growth. Handing these off lets you focus on building your business.
Startups face many challenges, but money management doesn’t have to be one. Outsourced accounting gives expert help at lower costs, helping you avoid mistakes and build a solid foundation.
If you’re ready to grow and cut down errors, outsourced accounting could be the smart move.
Expertise Accelerated offers outsourced bookkeeping services USA, helping startups to large companies. We handle your books so you can focus on growth, not daily tasks. Get expert support, save money, and free up time with EA.
Let us simplify your finances while you scale your business!