There are various departments and functions within any business that must collaborate to offer products and/or services to its customers. Not all businesses are the same and thus functions like the accounting department might not be as important in some businesses as others. There are many advantages to outsourcing non-critical functions, including allowing business owners to focus on what’s important.
Traditionally, the accounting department wasn’t a function in a business that could be outsourced—in most manufacturing businesses it still isn’t. The pervasive nature of business accounting makes it hard to extract that function from operations. However, in the current digital world, especially one focused on services, there are various ways a small business can outsource the accounting department.
Many small businesses rely on a part-time bookkeeper or accountant to show up at the business location. When all the documents are physically present, a site visit is the most expedient way to update the books. Although this is still outsourcing, it’s inefficient and usually more costly. The general transition to cloud-based accounting has allowed a much more convenient outsourcing of the work.
There are different levels of outsourcing that businesses can target depending on the budget and desired level of control. Usually, the more you can outsource the better, but be mindful of the implications and remember to keep control over the core functions. Here are some tips to help you successfully outsource your accounting department.
Tip 1: Use the cloud
If your accounting is not yet done in the cloud, now is the time to take advantage of the available technologies. Change can be hard, so consolidate some of the work by outsourcing and upgrading to the cloud in one go. Additionally, relying on outside help will allow you to attract talent that might not be available locally.
Tip 2: Find an all-in-one solution
Some businesses prefer to keep their accounting and tax firms separate. This can be beneficial since you will have two separate firms checking the work. The disadvantage, however, is that you might have to project manage and help coordinate between them. For efficiency, use an all-in-one solution when possible.
Tip 3: Reduce turnover
A key cost that most small businesses overlook is employee turnover. There is typically little financial cost to associate with employee turnover unless the business has a dedicated training program. The same applies to finding the right accounting firm to outsource to. You need to make sure the accounting firm is the right fit to help you outsource.
Tip 4: Keep treasury in house
Unlike the accounting department, the treasury department consists of people that have actual access to the bank accounts and cash—don’t confuse the two! It’s usually best to only allow treasury access to trusted individuals. To avoid not just fraud or embezzlement, but also financial mistakes, you should rely on key individuals in your business for treasury access rather than outsourced accountants.
Tip 5: Don’t outsource invoicing
Invoicing is traditionally thought of as an accounting function, but the ease of creating invoices in a cloud-based accounting system makes it accessible to everyone. Since invoicing usually requires greater operational knowledge than accounting knowledge, it’s more efficient to keep this function in house. There’s no need to send invoicing data to an accountant when you can easily enter that data yourself.
There hasn’t been a better time to start outsourcing your accounting department than now. There are many firms that specialize in it. Although you may lose some control, you can devise easy ways to mitigate that while increasing your business’s efficiency. The ultimate goal is to free up time and allow yourself to focus on the core function of your business.
This article originally appeared on Forbes