The growth of your business is exciting, but not without some growing pains. There will be a point usually around $1M in revenue, in some cases more – you can no longer be involved in every part of your business.
You have to focus on what you are good at and delegate the rest
Accounting is generally one of the first functions that many businesses will look to hand off to someone else. It is critical to maintain an accurate picture of your financials but it doesn’t do much to drive revenue.
Going out and hiring more staff isn’t your only option, though. In many cases, outsourcing your accounting is a better business decision. Here are a few reasons why:
focus on growth
Unless you happen to be an accounting firm, accounting is not what is driving your revenue, nor is it your area of expertise.
I would be willing to bet however that you are an expert in your specific industry.
Outsourcing your accounting services frees up more time for you to work on tasks you excel at, which happen to be the tasks that will bring in more revenue and lead to further business growth.
cut employee costs
The average salary for a CFO ranges roughly from around $120K-$220K and a financial controller will run you roughly $90-100K+.
In those numbers don’t incur some stick shock, consider this: employees also require hiring, training, benefits, and paying payroll taxes, all of which add to your costs.
Another consideration is supervision. If your accounting department grows large enough, you will more than likely need to hire managers.
In many cases, employee costs can eclipse those you’ll incur by outsourcing your accounting. Not to mention that outsourced firms provide you with more scaling flexibility.
If you need more employees that is a good sign as it means that your business is growing. But hiring more employees for your accounting process could take almost 24 days. On top of that, new hires have to adjust to your company, learning all your systems and processes.
Current staff may be pressed for time, trying to balance an increased accounting load with training and assisting the new employees.
Your rapid growth company doesn’t have months to onboard new accounting staff.
Outsourced accounting services are a much better solution, as they can increase the time and resources allocated to each client on demand. Of course, be sure the read your contract with the firm and see if they require a waiting period before making changes. At MCDA, we do not.
expertise and guidance
Outsourced firms are your go to experts for accounting and finance questions. Any firm you choose will generally have experience working with similar businesses in your industry. Consequently, the firm may have invaluable advice regarding growth and investment opportunities.
Also, they can help cut costs by analyzing your current budget and offer advice on areas where you my be spending more money than necessary.
reduce chances of fraud
Unfortunately businesses lose roughly $150K per year to fraud. A large chunk of your annual budget gone from right under your nose! Additionally, smaller companies are at an increased risk of fraud than larger organizations.
Fraud can happen to any business, even in you trust your employees.
Outsourcing your accounting reduces the changes of fraud since the firm is a third party. As a third-party, they keep the record keeping separate from other accounting or finance functions, like authorization and custody of assets.
Additionally, the outsourced firm has the accounting expertise required to audit your money trail and spot signs of fraud to minimize damage to your finances.
access your financial data everywhere
Accounting is moving like everything else, up to the cloud. As of early 2020 nearly 80% of small businesses use cloud based accounting. Outsourced firms use the latest cloud-based accounting software to provide you real time updates on your accounting records. Such flexibility makes decision making substantially easier and less stressful.
When professionals handle your accounting, you can make decisions with confidence. You’ll always have an accurate financial picture of your business, as well as an expert resource to consult with when you need advice.
HOW CAN MCDA HELP
MCDA has years of experience providing outsourced accounting and CFO services to several industries. We always tailor our accounting services to your specific needs so you can always make the best business decisions. We are here as your financial team!
Focus on what you do best and call us today (714) 872-2393
Ask about our COVID-19 Discount or deferred payment options.