Outsourced accounting services can help agencies avoid a common pitfall – the thinking that the accounting role of a bookkeeper can be held by anybody on the team, especially folks who already have some kind of admin function, like an office manager. Bookkeeping is often seen as a compliance function in small agencies — somebody to bill clients, pay suppliers, keep payroll going, collect taxes, and report to the government.
That’s a pretty long list to be accountable for on top of making sure there’s milk in the fridge for coffee, the office Holiday party is planned, and clients are greeted when they arrive.
While adding bookkeeping to an existing in-house role like an office manager’s job description might feel like the easiest, cheapest solution, the reality is that decision could end up costing you way more than you bargained for.
Bad accounting practices are like water leaks. They can go unnoticed for years until one day, the ceiling comes crashing down, and you’re left wondering what happened (not to mention with an expensive repair bill!). With no disrespect to the hard-working office managers that every firm needs — your finances are better left to the professionals.
After all, you don’t just want your bookkeeping done. You want it done right. Your business’s performance—and success—depends on it.
Here’s how you could be better served by hiring a dedicated remote team of outsourced accounting services experts.
1. Outsourced Accounting Services Delivers Quality Information and Empowers Owners
While it’s up to you to make the call on major financial decisions, those decisions are bound to be short-sighted without accurate accounting information to back them up.
Poor accounting practices mean you likely:
- Don’t know which clients on your roster are profitable and which are dragging your performance down.
- Don’t know which of your outstanding invoices are actually unpaid because bank accounts aren’t reconciled regularly.
- Don’t bill your clients on time.
- Don’t collect payment on time.
- Run your business off your bank account balance, not your actual financials.
Think about how much more confident you could be in your decision-making if your accounting data was not only accurate but you had an idea of how you’ve performed in the past and where you might need to spend a little more time in the future.
For example, there are specific KPIs that can more accurately tell the story of your financial performance. And no, we’re not just talking about gross revenue or sales! A basic bookkeeper probably isn’t tracking these metrics and KPIs, which means you’re missing out on valuable big-picture information to better inform your business decisions.
2. Nix the Spreadsheets: Outsourced Accounting Services Can Revamp Your System
The dreaded ‘p’ word, process. Is there any agency that doesn’t spend their days thinking about better processes in some facet of their business? There’s a reason why it’s a focus—better processes can lead to better outputs, especially when it comes to the quality of your financial reporting and the effectiveness of your accounting workflows.
Let’s start with some accounting basics.
How do you organize your chart of accounts? Do you use a program like Quickbooks, or are you still doing it manually with spreadsheets? We see so much wasted time in small agencies with team members keeping track of accounting data on their own spreadsheets.
Whenever we come across a system of multiple Excel sheets, they’re almost always inaccurate. And realistically, how can you expect your spreadsheet (or anyone else’s) to match what the accounting system actually says if everyone is updating them independently?
Think of all the time and energy you would have to build your business if you didn’t waste time updating spreadsheets. Let the software you’ve invested in do the heavy lifting for you. There’s a time and a place for Excel, but this isn’t it.
And speaking of programs, you need to embrace the power and potential of Quickbooks (or a similar program). Most business owners don’t know how to customize reports to efficiently manage project budgets and project profitability. But once customized, anyone in your business can retrieve important information (e.g., amount billed by each job, cost received, job margins). That means instead of painstakingly screening for the information you need by pouring over multiple spreadsheets, the report can do it for you.
Here’s another one. Have you ever heard of the Projects feature in Quickbooks? If the answer is no, you’re not alone! Most business owners either haven’t heard of it or are aware of it but don’t realize what a game-changer it is. Instead of all of your revenue going into one big account, the projects feature allows you to create mini profit and loss statements (P&Ls) for each client engagement.
This means you can accurately (and easily!) see which projects and clients are best for you and your bottom line.
Even if you just have an expert come in to set up your Quickbooks and do a bit of training, you’d be surprised how much time you can save yourself.
Maybe you got lucky and hired a unicorn office manager/bookkeeper who keeps the trains running on time and is a wizard in Quickbooks. If that’s the case, good for you! But most basic bookkeepers don’t have that level of knowledge. We’ve seen all manner of “workarounds” to problems that Quickbooks is already designed to solve. If you don’t use the system the way it’s meant to be used, the “hacks” you build end up being hindrances to understanding your profitability.
3. An Office Manager Can’t Keep Up With Your Accounting Needs
If your office manager is busy managing the office, that means, at best, bookkeeping and your accounting cannot be their top priority. And at worst — it’s probably falling to the bottom of their already lengthy to-do list. In other words, just like office management, bookkeeping is a full-time job, or it should be to get the results you need.
Most professional firms need more than basic bookkeeping. What you truly need is an outsourced accounting services partner that supports the forward-thinking financial management you and your agency need to continue growing.
You might think your leadership team can cover your financial planning needs where your bookkeeper falls short. While you may certainly be capable, are you sure your inexperienced bookkeeper will provide you with accurate enough information to do the job well?
More importantly, is financial management really the best use of your time? You can provide the most impact by focusing on your business’s growth, your clients, and your product instead of preparing financial documents.
Outsourced Accounting Services Isn’t a Cost—It’s an Investment
There are lots of ways to be mindful and cut costs when it comes to your business operations. Many business owners just like you often hire an in-house bookkeeper or decide to go at it alone.
But, inevitably, you’re going to reach a point when you become disappointed because you’re not getting the results you need or you’ve simply outgrown the solution.
The question you should really be asking yourself is: What does the bare minimum actually cost? The answer is accurate information, peace of mind, and optimal business performance.
All of a sudden, that “cost-saving” choice starts to sound awfully expensive, right? You don’t put half-effort into your client solutions, so why would you do that to your own business? It’s time to invest in an outsourced accounting team that specializes in businesses just like yours.
An outsourced accounting services team can fulfill all your bookkeeping needs and more. Even better? A fractional approach to accounting means you get all the skill sets you need to optimize your business at a fraction of the cost of hiring multiple accounting roles.
Let your office manager off the hook and let them get back to doing what they do best.
Get in touch with us so we can help you do your best.