Entrepreneurs may want to outsource accounting at this challenging time to concentrate on revenue-generating activities, growing the business and navigating the stormy months that lie ahead.
In this blog, we outline the mechanics of how a business can outsource accounting and explain how specialists, like Isosceles, can support early-stage and growing businesses with a professional, durable and appropriate part of the finance function.
A quick scan around the internet and you will discover plenty of articles that explain the benefits of outsourcing accounting; indeed, we have a couple ourselves for your review
Interestingly, there are few, if any, articles that explain how to go about this daunting but ultimately highly beneficial process.
Take time to consider the options
There is no doubt that making this decision is a big step. Before embarking on this journey, precisely define what you need from the service and what you are trying to achieve in the short and long term.
Businesses usually consider outsourcing elements of their finance function for one of the following reasons:
- The business is rapidly growing or contracting
- A smaller, highly focused team may be required to focus 100% on the business whilst all the other clutter of business minutia is taken care of by someone else
- The business needs the skills, knowledge and experience of a Finance Director but cannot afford one full-time
- Lack of accurate, reliable and granular management, finance and accounting information
- You are experiencing high rates of staff turnover or skills shortages
- The business needs to generate operational efficiencies
The requirements for each reason will be very different. Be clear on what your priorities are before you outsource accounting.
Avoid common mistakes
You get what you pay for
When it comes to outsourcing, choosing the most affordable service is not always the most prudent approach. Outsourcing is more than just the traditional mechanics of bookkeeping. Outsourcing is an opportunity to build a high calibre finance function, which will grow proportionately with the business and support it on its growth journey. This is why businesses need a part-time team with various skillsets, not just an over-reliance on one individual.
Biggest is not always best
Don’t assume that just because an outsourcer has grown to become a large multi-national organisation or market leader, they understand how to support an early-stage or growing business entrepreneur. Large companies are not generally agile and tend to work to a generic formula requiring paying clients to do it their way.
Flexibility is crucial
Since every business is unique, the outsourced accounting service chosen must be flexible and tailored specifically to its requirements. A fully rounded service provider will allow you to blend resources as and when required, have the expertise in all stages of growth, and contribute to the business’ development.
Is the provider likeable and trustworthy?
Trust is an essential component of any business relationship. For an entrepreneur wanting to outsource accounting, it is no different; the provider will have access to sensitive information, bank accounts and employee information. For these reasons, business owners need to be comfortable trusting an external company with the inner workings of the business and its operations.
Before a final decision is made, take time to understand the culture of the company:
- Is it a good fit for the business?
- Is the provider’s CEO, likeable?
- Do the company’s credentials and testimonials check out?
- Do you agree with their view of business life?
- Have they taken the time to understand you and your business fully?
Meet several individuals within the company. Look at their code of ethics and how they manage their workforce. Review their case studies and get references from other clients.
Ask to see CVs for all individuals who will be working on your account. A good quality outsourcer will also allow you the opportunity to meet your team in advance. Thankfully, HR problems will no longer take up your precious management time, but you must be comfortable with the team that will work with you.
It’s all in the Service Level Agreement (SLA)
The SLA is pivotal, and both parties must get this right from the outset and before you sign the contract. It depersonalises the outsourcing service, focusing instead on the deliverables, quality, and timescales and is not limited to a particular individual’s capability.
Through the SLA, a business has full and absolute power and control over the service without any of the headaches associated with managing people.
Isosceles and oursource accountig
At Isosceles, we believe an outsourced accounting service provides better value for money to an SME than an in-house team, especially since the monthly cost of finance may not have been monitored and measured for a long time.
Without fail, when a customer is presented with our invoice for payment, they ask themselves (and sometimes us) the following pertinent questions:
- “Was this value for money”?
- “Did you deliver to my expectations? “
- “What were the nature of any issues that occurred ?”
- “Were there any errors or omissions?”
- “What extra performance did I get that I wasn’t expecting?”
This level of scrutiny is a positive thing; it keeps our standards high. Our systems and process must be top-notch. Our people must be first class. We must continually strive to maintain high standards and vigorously search for the most efficient processes and solutions for our clients.
If you need help, please get in touch.