5 Reasons Start-Ups Outsource Accounting and Bookkeeping
Accounting is one of the most important areas for startups to get right. If you can't effectively manage costs and expenses, it will be difficult for you to keep afloat as a business.
The reality is that many startups can't afford to hire internal bookkeepers well-versed in accounting practices and procedures, but they can save money by outsourcing these tasks to low-cost freelancers or virtual assistants who can still do an exceptional job.
Benefits of Outsourcing
You might be surprised to learn that outsourcing accounting and bookkeeping services can be a better value than hiring full-time staff. Let's take a look at some reasons why.
1) Better Resource Allocation for Your Business
This is probably the most important benefit of outsourcing bookkeeping. In your quest to validate your startup idea and bring it to market, you simply can't afford to hire and train a full accounting team.
The risks of focusing on product development, marketing, and customer acquisition far outweigh the risks of not having an accounting system in place. So, you need to be strategic about how you use your time.
2) Cost Savings
A traditional accounting system can be quite expensive to implement, manage and maintain. In fact, you can spend thousands of dollars on software, subscriptions, staffing, training, and more.
With the help of an outsourced accounting team, you can avoid spending money on things like software and expensive accounting systems. Instead, you can focus on growing your startup by hiring more developers and designers to help you iterate and improve your product.
3) Receive Professional Advice
Starting up is extremely challenging, and it's easy to get caught up in the day-to-day tasks of managing and growing your business. If you don't have a background in finance, it can be difficult to make informed decisions regarding your business finances.
A professional team can help you make sound financial decisions and give you confidence that your accounting process is reliable and trustworthy.
4) Prepare For Tax Season
Tax season is one of the most important times of the year for a small business. You want to be sure that your taxes are handled accurately and that you're taking advantage of all available deductions and credits.
An outsourced accounting team can be a great resource to help you effectively manage your tax liabilities and get your business' finances in order.
5) Easier Scaling Up Process
No one wants to pour all their efforts into developing a great product only to have an accounting mistake ruin their chances at success. Many startups don't have the internal resources to manage accounting and bookkeeping, but outsourcing can help them avoid these mistakes.
The reality is that you'll probably need to outsource more tasks as your business grows. This is especially true when it comes to back-office functions like accounting and bookkeeping.
As your business scales up and you hire more developers and designers to work on your product, you'll likely need to hire more people to manage the accounting side of things.
Conclusion
To sum up, you should be outsourcing your accounting and bookkeeping because it allows you to focus on activities that are more important for your business. Startups should shoot for early profitability, and outsourcing can help them do this by saving money and avoiding bookkeeping mistakes.
When it comes to financial matters, you can trust Totally Booked. We offer bookkeeping services in New York to help you stay on top of your finances while you prioritize other aspects of your business. Book a consultation with us today.