Some people think growth equates to hiring tons of new employees. While this can be true — there's a lot more to it than that, including clarifying roles, building a structure, and increasing profitability.
Whether your business has two employees or fifty, you may or may not have the bandwidth to meet all your financial needs.
When you hire an in-house employee, you may be limited to their skillset and pay rate — an entry-level employee won't have the expertise to conduct cash forecasting. Similarly, you won't want to pay a CFO to perform basic accounts receivable and accounts payable tasks (more on that below.)
Additionally, if you're focused on long-term growth, you're probably aiming at scaling your business, meaning you want higher profit margins while keeping your expenses about the same or much lower or relative to your revenue.
Scaling might indeed mean hiring new in-house employees. However, the wiser choice may be to bring in an outside financial team when it comes to your accounting.
Scale your team to scale your business.
Gain Back Your Time
As your business grows, it forces you to spend more time, energy, and money on financial management. It's a bittersweet dilemma when you have more money coming in but less time to enjoy it because you're trying to balance your books at midnight.
This predicament could quickly turn into a bottleneck blocking off time you need to do other critical work. Ideally, you'll want to hand over time-consuming, repetitive tasks — whether simple or complicated, whether requiring a ton of knowledge and experience or basic skills.
You may decide to hire a bookkeeper and a payroll manager. However, if you're the one managing them, you still have to put in the time to supervise and oversee them as your employees.
What's more, you would still have to perform essential functions yourself like:
- Financial planning
- Budgeting
- Reporting
- Forecasting
- Tax preparation
- Cash management
Sure, you can save yourself a fraction of your time by hiring a bookkeeper and payroll manager. OR, you could take these financial roles and oversight off your plate by bringing on an outside team of a bookkeeper, an accountant, a controller, and a CFO for the cost of a single full-time team member — effectively scaling your team and getting more bang for your buck.
When you hire a firm to take on your financial needs, they perform the required tasks to help you grow, and they'll also help you avoid having to deal with issues like a bookkeeper who suddenly falls sick or quits. In addition, you'll further save the time you would typically spend on vetting and hiring new employees whenever you have employee turnover.
Benefit From a Range of Expertise and Know-How
When you employ individuals for each of the above roles, in addition to labor costs, you're asking for overheads you don't need. We're talking office space, insurance, and payroll taxes, to name a few.
Or, you might have one in-house bookkeeper at an entry-level rate, but they're attempting to perform duties for a position worth $100 an hour. Plus, you're limited to the experience of this sole individual.
Instead of a single employee, you could be dishing out that same investment to a professional accounting firm — one that will offer you a wealth of experience to help you scale your business.
You'll also avoid mismatching roles. For example, you don't want to pay a CFO to do an entry-level job. Meanwhile, an entry-level employee can't perform, for instance, comprehensive forecasting.
By bringing on a financial team, you get the entire span of experience and all the abilities your financial team should have — people who do entry-level work as well as those who do high-level jobs.
For example, your entry-level employee might be skilled at data entry, while on the higher end, you gain extensive strategy abilities from your CFO-level employee.
And instead of hiring a separate bookkeeper, accountant, and CFO, you can hire a single bookkeeping team for a fraction of the cost. In other words, you can scale your team to save money and gain greater profits.
Offload The Burden Of Staying Up To Date On Best Accounting Practices
We've established that there's a lot more to accounting than, well, accounting! And the reality is that an in-house team member does not possess the same range of expertise as a professional team. It goes deeper than that, though. There's also learning new technology, deciphering risk, and knowing how to connect it all to scale wisely.
Keeping Up With New Tech
The technology you're using in your business right now could be crippling your progress without you even knowing it. Luckily, an outside team can quickly bring you onboard the modern technology train with cost-effective cloud-based accounting software.
And the best part is, you won't have to learn to use it, it's that simple.
Managing Risk And Reducing Errors
No risk, no reward?
This saying only goes so far in business, especially when you're unprepared for the unforeseen and can barely keep track of what you have going on.
An accounting professional with a solid background in their field will help you reduce the risk of financial downfall by keeping you on top of outstanding bills, invoices, and payroll.
If you also have a controller on your team, you can expect more accuracy in your finances and fewer errors thanks to their trained abilities to oversee your accounting tasks. Fewer errors and reduced risk leaves you with room to scale more quickly and efficiently.
All The People For All The Roles You Need
We've mentioned a few of the titles you may find when you hire outside bookkeeping services. Let's explore what each of them does.
You'll get:
A bookkeeper to record payments, deliver invoices, handle payroll, record data, and reconcile bank accounts.
An accountant to help with taxes, manage cash flow, conduct financial planning, advise you on your current financial standing, and help you make informed financial decisions.
A tax preparer to perform tax planning, provide legal representation for IRS matters, and give expert tax guidance.
A controller to prepare advanced financial reports, assist with cash flow management, and provide detailed budgeting analysis.
A CFO to draw up an advanced growth strategy, handle in-depth forecasting and streamline operations.
Not sure if you want or need all of these quite yet? Let's assess where your business is right now.
Should You Hire An Outside Financial Team?
Not every business owner is ready to bring in a financial team just yet — but if you're reading this, you probably are.
Chances are, you now realize your money will stretch a lot more if you hire an outside team with a wide breadth of expertise than if you hire a sole in-house bookkeeper or try to bring on several employees to fill in the various financial roles your business needs to scale.
How To Find The Right Bookkeeping Services
In a sea of accounting professionals, how do you know who's right for your business? Here are a few criteria to look for when scouting out your financial team:
- They answer all the preliminary questions you ask.
- They have a wide-ranging industry background that covers various financial roles.
- They can show you how they delegate sensitive duties within their firm.
- They offer some flexibility and can customize their services to suit your industry.
Automated Accounting Services is an accounting partner of Fyle that can help your business scale! To learn more about partnering with Fyle, visit our Partner Page or write to us at partners@fylehq.com.
