Did you know that 90% of startups fail? A whopping 18% of them fail because of ineffective financial and accounting management. Startups have limited financial resources, so handling their funds effectively is very important. It’s great to have a stellar business plan, but if you don’t manage your money properly, you’ll never make it in the competitive work environment.
Are you a startup entrepreneur just learning which services you will need to run your business more smoothly? Nowadays, companies tend to outsource many tasks not related to their core competency – that is, the activity that will ultimately drive revenue and grow your company – or the reason you started your business in the first place. This includes outsourcing everything from marketing and design to sales, IT, and administrative tasks.
Should you invest the money in outsourced accounting services to simplify business processes related to bookkeeping and finance? We want to share the top 6 benefits, which our clients in Toronto, Mississauga, and Hamilton have already experienced after they decided to outsource bookkeeping and accounting. Let’s look at ways hiring an outsourced accounting service can help your startup business
Startup business owners tend to neglect bookkeeping, and then panic when tax time rolls around, as their “bookkeeping files” are shoeboxes full of receipts. (Or, if they are extremely tech-savvy, a Dropbox folder of receipt scans.)
If you become accustomed to working with a bookkeeping service from the start, you’ll develop good business habits that will make it harder for future employees to steal from you, help you keep tighter reins on expenses, and always know where your company stands, financially, with accurate and up-to-date bookkeeping records. Plus, a good accounting service can teach you the “Hows” and “Whys” of bookkeeping, so you understand what is happening every step of the way. (It is your financial data after all). By choosing the right outsourcing company wisely, you can be sure that your accounting is in the reliable and knowledgeable company’s hands.
Whether you’re applying for a hard-to-get small business loan or seeking funding from angel investors or venture capital firms, accurate and up-to-date bookkeeping, along with clear and insightful financial statements, could mean the difference between getting the money you need so your business can grow or having to call it quits very early in the game.
Outsourcing service providers have a team of accountants, bookkeepers, and other financial professionals who can offer the best services. Accounting services will provide you with the up-to-date bookkeeping records and financial statements you need, along with explanations of the data in those financial statements, which can help your company shine amidst all those other small businesses that are not as prepared.
Burnout is a term referred to as defined excessive spending rate. Do you know your company’s burn rate? This is, in short, how much money you are spending and how long, if you continue spending at that rate, you’ll be able to stay in business. This is important to know, especially if you’re a tech startup or another early-stage company with a long lead time before you’ll start generating revenue from sales. Startups need to find out their burnout rate so that they can enhance their revenue scale. One competent accountant can only help startups in locating their burnout points.
When you start with the right accounting partner, you can scale up your business smoothly. Accounting and bookkeeping services go beyond data entry and QuickBooks support. Good controller and bookkeeping services offer advice, counsel, and insight — providing you with financial statements, budgets, forecasts, and dashboards to monitor all your financial data. It’s one thing to have all the financial data you need to run your business. But the real benefit is to have someone to explain exactly what the financial statements mean and help you to make the decisions that will steer your company toward growth. A good accounting firm will always provide advice on how to make accounting more efficient. Sometimes it might work with a couple of clients and propose an excellent experience from another client. Whether it is about taxation, accounting software, or even providing financial advice.
The accounting service providers have the amount of availability to scale your services significantly without any lag. Today’s startup maybe tomorrow’s Fortune 1000 company. Starting with the right accounting and bookkeeping service means ensuring the service can scale to your needs. Perhaps now you simply need monthly service to reconcile and close your books–but you may need comprehensive daily services down the road. Instead of having to manage a major transfer from a single part-time in-house bookkeeper to an outsourced accounting service later, start with a service that can handle all of your needs now and later.
Moreover, accounting and bookkeeping service providers are charging on an hourly basis. It means you can scale up or scale down the hours without any interruption.
Most businesses use accounting automation software to save time. It will save time, but importantly, it reduces risks. Automating accounting is minimizing human errors. Secondly, in automation software, accountants get real-time reports. They assist in catching potential problems and resolving them at an early stage. Thirdly, it will reduce the probability of internal fraud.
Most of the accounting firms in Canada are highly qualified in the automation tools such as QuickBooks, Sage, SAP, and more.
From our experience working with different companies, outsourcing bookkeeping and accounting tend to work the best when:
A small business does not require a full-time bookkeeper but needs a person with more skills than the office manager, or receptionist can provide.
A company of any size cannot find a full-time employee with suitable abilities at affordable costs.
A growing company is looking for opportunities to scale its accounting and bookkeeping services anytime.
The temporary services are needed, e.g., extra help with end-of-the-year reports or if a full-time employee is going on –holidays, maternity leave, etc.
There are significant advantages for clients who decide to outsource their accounting tasks. To begin with, cost-efficiency, and ending with flexibility in terms of contracts or scaling the number of functions.
Filing Taxes is a reliable accounting service provider to small and medium-sized businesses with clients from all over Canada. Filing Taxes is a reputed accounting outsourcing company that can provide finance and accounting services at affordable rates. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.