As a startup founder or entrepreneur, you wear multiple hats and juggle various responsibilities to ensure the success of your business, whether it’s to define your product and services offering, establish a sales and marketing plan, sort out supply chain details, or determine staffing requirements. Another critical aspect that often demands a significant upfront drain on your time? Establishing internal systems and procedures for bookkeeping and accounting back-office support.
There comes a point when handling the bookkeeping and accounting tasks in-house becomes overwhelming and hinders your ability to focus on other core business activities. Time is money when you are busily ramping up revenues; that’s when outsourcing bookkeeping and accounting services becomes a strategic choice. We know making this decision can be difficult—after all, you’re busy running your business—so let’s explore the signs that indicate it’s time to outsource bookkeeping for a small business.
The Challenges Faced by Startup Businesses
Startup businesses face unique challenges: limited resources, rapid growth, and evolving regulatory requirements can create complexities that require expert attention. Navigating the s-curves of the cash flow necessary to start a business, not to mention projecting revenues and expenses in the early days, can require additional time and expertise you may not have. If you are pursuing outside investment or lending, projections will be crucial to engage in those conversations. Projections are also essential to help you avoid surprises and plan ahead for cash requirements.
Having timely and accurate financial records to track your progress can be crucial to making informed decisions, securing funding, and ensuring compliance with local, state, and federal requirements. Setting up sound processes and systems from the beginning is far more cost-effective than going back and doing damage control to get it right. Regardless of your size or industry, Perkins has an experienced team across multiple specialties to assist you with these challenges.
The Benefits of Outsourcing Bookkeeping Services
Outsourcing your bookkeeping services is an attractive option to get you started on the right path to managing your new startup business. With a customized service solution that fits your needs, you can expect coordinated access to our trained staff without worrying about hiring, training, and managing employees.
Outsourcing the accounting services you need becomes a variable expense, which often results in cost savings compared to the more fixed expense of direct hires needed to cover the necessary skills. Hiring employees is also a commitment to ongoing expenses and time devoted to continued development and training to keep them current on technology and compliance requirements. Additionally, as your startup grows or expands, it is helpful to have advisors who will evolve with you, providing expertise and insights across multiple specialties such as financial planning, forecasting, and strategic advice.
The Criteria for Choosing a Good Accounting Partner
Selecting the right accounting partner is crucial for startups. When evaluating accounting firms, consider factors such as their experience and expertise in working with startups, industry knowledge, reputation, scalability, and technological capabilities.
For example, imagine you are the founder of a SaaS company, and a friend is starting a winery. While both of you are looking for accounting partners, you discover that your industries’ specific tech stack and compliance requirements differ significantly.
Your SaaS company demands an accounting partner well-versed in handling online transactions, recognizing revenue from monthly subscriptions, and managing the complex financials associated with software development costs. The ideal accounting firm should be familiar with cloud-based accounting software, able to integrate with payment gateways like Stripe, and have expertise in navigating the intricacies of SaaS financials.
On the other hand, your friend’s winery requires an accounting partner with experience in agriculture cost accounting and inventory management of vintage wines. They would benefit from a partner knowledgeable in winery-specific software that tracks vineyard expenses and understands the many options for managing the cost of goods sold for different wines.
When choosing your accounting partner, be sure to conduct thorough research, seek client testimonials, and engage in due diligence to help ensure you find a partner who aligns with your specific business requirements.
How a Good Accounting Partner Supports Startup Growth
A successful accounting partner for a small business adds immediate value through responsive service, accurate and timely financial reporting, and strategic financial advice based on identifying relevant patterns or issues based on results and visibility to projected performance. A partner like Perkins will work with you to identify and consider possible paths for tax compliance and optimization and help facilitate your decision-making among the alternatives. Moreover, a reputable accounting partner brings a network of professionals and resources to the table, offering valuable connections and insights. Perkins has a seasoned blend of expertise to apply to your business challenges and scenarios from our network of top-notch professionals and resources.
Knowing when to outsource bookkeeping is a critical decision for startups that can provide strategic and long-term value to your business. Juggling multiple responsibilities and facing unique challenges in the startup phase can overwhelm your internal resources and hinder your core business activities. Streamlining your financial management processes can better position your startup for growth and success. By partnering with a reliable accounting firm like Perkins, you gain access to a team of experts across various specialties who can provide customized support tailored to your specific needs. Remember, outsourcing bookkeeping services allows you to focus on what you do best—building your business—while giving you peace of mind that the financial intricacies are in capable hands.