Many small business owners want to handle every aspect of their company for the satisfaction of knowing everything that is going on with sales, production, customer service, money, etc.
The idea of having an external company or employee handle all major financial aspects of a personal company is what turns away most small business owners from outsourcing.
However, outsourcing is a great method for handling accounting tasks that small businesses should utilize.
By hiring a company that employees fully trained accountants that specialize in small business accounting to handle some of, if not all of your accounting tasks, small businesses are able to focus more on their core competencies.
Advantages of Outsourcing In the article, The Benefits of Outsourcing for Small Businesses, the New York Times lists seven benefits to small companies when they use outsourcing firms.
Those benefits are; control capital costs, increase efficiency, reduce labor costs, start new projects quickly, focus on your core business, level the playing field, and reduce risk.
Control Capital Costs: According to a survey of key business decision-makers by InfoTrends, outsourcing is 60 % more effective in controlling capital costs than if a small business were to handle them internally.
This means that small businesses are saving money, which is a positive factor in these difficult economic times.
Increase Efficiency & Reduce Labor Costs: By allowing a skilled company to handle all accounting tasks, small business are able to focus on major/new projects, core competencies, employee relations, and all other aspects of the company the will increase productivity, customer relations, and sales.
As well as decrease costs because training new employees to handle accounting tasks or paying a big overall fee to an accountant is more time consuming and expensive than outsourcing.
Start new projects quickly & Focus on Core Business: Outsourcing companies are trained to handle multiple tasks.
By using an external company to handle accounting tasks, small companies are able to utilize their internal employees to focus on and start new projects with out worrying about the financial aspect.
Also, companies would be able to focus solely on their products, services, and customers by not having to worry about financial situations.
Level the Playing Field & Reduce Risk: Because of the increased focus on the actual business products, services and customers, small companies would gain a competitive advantage over other small firms and would also be able to compete with larger firms.
Outsourcing companies are trained to analyze risk, they know all of the rules and regulations and are aware of when changes are made.
As a small business owner, it is easy to mis-manage risk and over look changes in regulations and rules when focusing on other aspects of the company.
By handing accounts over to an outsourcing company, risk is one major aspect that small business owners do not have to fully focus on or worry about.
By relieving the financial stress and risk through outsourcing, small businesses are able to focus on their products and service, which ultimately help their profit, competitive advantage, and capital costs.
According to a BusinessWeek article, What You Need to Know About Outsourcing Now, "Outsourcing a business service can sometimes cut costs in half, and successfully outsourcing manufacturing can save even more.
" Small business should take advantage of outsourcing firms, not only to focus on their core competencies but also to reduce financial pressure and cut costs.