You should outsource your bookkeeping

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There usually comes a time when you’re ready to move bookkeeping off your plate.  It may be immediate - perhaps you have run a company before - and you know the benefits of shifting the bookkeeping responsibilities to others on day one.

Other times, it’s a decision that’s made as your company scales and evolves.  As your company grows, your time is required in other aspects of the business - strategy, operations, HR, etc. - which involves lots of time and a clear mind for sound decision-making. The burden of tasks that can be moved to others is too great as a company scales.  Time is already so limited on a daily basis and ideally that time is spent on high quality decisions and engagements.

It’s at this point that many business owners reflect on their daily tasks and make a decision on which can be delegated.  This is easier said than done of course - you need capital, resources (if delegating internally) and sound processes - to ensure that outsourced tasks are completed at a high level (like when you were doing them).

There are many functions that companies can outsource but let’s talk about one that we know quite well:  Bookkeeping, and more specifically, the finance function!

OUTSOURCE OR HIRE INTERNALLY?

There are definitely pros and cons to both - but we lean towards the ‘outsourcing’ model.  We’re biased of course because this is what we do - but we did want to highlight the benefits of a outsourced team - an option that business owners didn’t even know existed. With so many great tech tools and cloud accounting apps available these days, many finance functions can be completely remote at a high level.  We’re experiencing it first-hand.

At ConnectCPA, we have a team of bookkeepers, tax accountants, payroll pros and tech specialists ensuring that your finance function is streamlined and is providing you with the financial visibility you deserve.  When you need to make a decision or provide reports to investors - everything is a few clicks away.

In some cases, depending on the size of your company, you may need both: An outsourced bookkeeping service and an internal finance individual as the main point of contact.

By the way, we prefer the word ‘team’ or ‘extension’ over ‘outsource’.  Outsourcing implies that a function is provided to an outside service provider and completed with minimal interaction.  Although this can be the case quite often, we look at taking over a function as becoming an ‘extension’ of our clients’ ‘teams’, more specifically, their accounting or finance or bookkeeping team.  To provide a world-class experience requires coordination and interaction, including process-building and a definition of roles (What does our team do? What do our clients’ team do? How do we ensure we have the information we need on a monthly basis?). 

There’s still a strong case to hire internally if that’s your preference.  It really comes down to your needs, time horizon and the size and resources of your company.

WHAT ROLE(S) TO HIRE?

If you’re looking to move the finance function off your plate, you’ll probably start analyzing the role.  For example, do you need:

  • A bookkeeper?  

  • An accounts payable and/or accounts receivable specialist?

  • A payroll administrator?

  • A technology consultant to set up your financial workflows and architecture?

  • An accounting and tax pro?

These questions can get overwhelming and you may not find the answers you’re looking for right away - further delaying the transition.  For example, maybe the bookkeeper you hire has experience in only one or two accounting software/apps - and perhaps for your venture - it’s not the most robust tool to use.  Or maybe you have a competent bookkeeper that can handle most of the day-to-day tasks but they’re unsure of what other tools to integrate to automate your workflows.

It’s difficult to hire multiple roles and have everyone on the same page in terms of their knowledge.  Can you be assured that your bookkeeper is up to date on Stripe’s newest release? Or that your accounts payable or payroll administrator has implemented a seamless payment process? 

Lastly, in our experience, the cost savings of hiring individual roles versus an external team can be significant. And in some instances, even if the cost savings aren’t there, the value definitely is higher (you can get high quality work from an experienced team for the same cost as an entry-level position).

PLUG AND PLAY AND TURNOVER

The beauty behind hiring an external service is that, depending on the provider, they may be able to provide you with an experienced team from the onset, allowing you to essentially sign up to a ‘plug and play’ bookkeeping and accounting service.  Think of all the time you can save by foregoing interviewing, training and company integration.

ConnectCPA provides its customers with an end-to-end solution: 

  • Setup of the financial architecture and workflows (software, other apps and integrations)

  • Bookkeeping (including payroll, payments, receivables) 

  • CFO services (cash flow, forecasting strategy)

  • Compliance (corporate tax filings and planning) 

With a trusted accounting team by your side, you never have to worry about employee turnover and re-training, including the vetting of bookkeeping and accounting staff.  It’s all handled by your external finance team.

YOUR BOOKKEEPING ACTUALLY GETS DONE…AND ON TIME

A common complaint that we come across from entrepreneurs is their inability to have up-to-date information over the performance of their business, even when they do have someone assisting with their bookkeeping function.

Hiring a team that has experience in delivering reports to multiple clients in a deadline driven environment provides you with the ability to have a finger on the pulse of your business (and sound sleep).

Whether it’s an internal or external hire, look for someone that can deliver reports on a monthly cadence.  The benefit of an external team is that when personal matters get in the way (illness, family emergencies, etc.), there are other team members that can sub in and complete the job.

ONGOING EXPERTISE

Businesses are ever-evolving so it’s important to have team members with the expertise necessary to accurately reflect ongoing changes in your finance function (through new reports or updating of business processes).  Whether it’s shareholder changes, deferred revenue, new payment gateways or SaaS and subscriptions - having the expertise to tackle these changes - ensures that the numbers you are looking at are an actual portrayal of your performance.

Ongoing expertise is also really important on the technology side of things.  To start with, the design of your financial architecture is critical. There are many areas where automation can lead to huge efficiencies and an experienced team can spot these opportunities.

And even after you’re set up, there are new finance, accounting and bookkeeping apps released frequently that may solve financial pain-points.  Just as frequent are updates to existing apps. Wouldn’t it be great to have a financial tech team at your disposal? You want someone constantly learning and trying to apply updates to your existing workflows.

END-TO-END SOLUTION

So you’re all set up - your finance function is humming - and you’re ecstatic at having transparent financial information at your fingertips.  The last piece of the puzzle is the compliance piece. Your internal accounting and bookkeeping reports need to be turned into external financial statements (for yourself and perhaps other stakeholders like investors or board members) and need to be filed with the tax authorities (CRA for example).

If you hire an internal team to manage your finances, you’ll need an external accountant to prep the financials, corporate tax return and come up with a future plan.

At ConnectCPA, you have the choice of working with an external accountant that you may already have a relationship with or working with our very own highly qualified accounting team.  By working with us on the compliance component, you have your finances managed in one spot - your one stop-shop - for bookkeeping, taxes and tech.

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