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Why Hiring An Internal Accountant Won't Help Reduce Risk or Increase Profits in Your Business

Posted by Stephen King
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There's a lot of truth to the old proverb that "Two heads are better than one." It's especially true if your business has grown to the point where your in-house bookkeeper isn't enough, and hiring an in-house accountant seems like the right next step.

The need for advanced bookkeeping and management accounting is often inadequately addressed by small and medium sized businesses.

If you already have an in-house number cruncher, and your company is growing, you will inevitably reach the point when you need more robust accounting expertise in order to guide you through your next stage of growth.

By going outside your own organization, you can tap into a wealth of knowledge and experience. Trained professionals who are used to working together have a unique synergy that also extends to the companies they serve.

Investing in such a partnership allows a growing business to integrate these outside services with in-house capabilities. Customized solutions offer better efficiency and are highly cost-effective. 

LEVERAGE TECHNOLOGY FOR IMPROVED OUTCOMES

Success for businesses today depends not only what a company does, but on how it's done. Business management has evolved. Leaders are more strategic and need more information to make better business decisions. Management Accounting becomes the platform for growth and increasing profits. 

When cloud technologies are in place, processes and procedures now have the opportunity to become much more efficient and cost effective, while also reducing risk. In addition, data plays a key role in decision-making to help businesses increase profits and improve cash flow.

Without a comprehensive accounting system, you’ll be operating your business in the financial dark and risk facing cash flow shortages, internal fraud, tax penalties and possible failure.

If you leverage technology by implementing a robust bookkeeping and accounting system and optimizing it into a powerful financial operations engine, it will enable you to drive business growth.

Business leaders are becoming more strategic and need more information to make better business decisions.

If you aren’t getting actionable data from your accounting system, and financial reporting falls to one individual or even a small in-house department, this can result in various levels of associated risk. 

Better financial management and actionable financial intelligence are vital for business owners and CEOs to make growth-oriented decisions.

Using technology to optimize, automate, streamline and integrate as many steps of your company's bookkeeping and accounting processes as possible will reduce your back office burden immensely and improve your financial data. With cleaner, up to date financial information, you can track your company's key performance indicators to perfect your business plan and operations.

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TEAM + TECHNOLOGY FRAMEWORK

An optimized accounting system is one thing, but without the knowledge and expertise from the right kind of team, its like having the best car at the Grand Prix but with incompetent and insufficient crew. 

When you have a knowledgeable and dedicated team that is focused on the accounting function for your business, it puts you back in the driver's seat, allowing you and your staff to put more effort into productive opportunities to increase profits and help the business grow. 

Although it can be complicated to hire/train/manage staff that can provide the level of expertise that is needed especially in the growth stages of a business, there are other options.

When you're at that crossroad, it’s important to consider the advantages of outsourcing your financial operations rather than building your in-house finance team.

Three main reasons to consider outsourcing are to...

  • Cut costs
  • Focus on core business
  • Solve capacity issues

There are distinct benefits of having a full-service outsourced accounting department that not only has more effective and powerful bookkeeping and accounting tools, but also a dedicated team of experts to focus on your specific needs.  

Some of the benefits of outsourcing include...

  • Time savings
  • Cost savings
  • Expertise
  • Flexibility
  • Scalability
  • Advanced reporting

The team and technology framework is a powerful combination for a smart back office to increase profits and reduce risk.  

Recent studies confirm that small businesses are most at risk for financial fraud, and that most such fraud occurs because there are inadequate controls, separation of duties and procedural oversight.

COST EFFECTIVE OUTCOMES

If you own or run a business, you know it’s more than just the cost of hiring or salaries, but also the additional costs of just having an employee. Small and mid-sized business financial operations may consist of anywhere from one to 5 or 6 employees, each with different roles.

Depending on the size and stage of your business, you may need to employ a full accounting department with roles such as staff accountant, bookkeeper, accounting manager, CFO and controller.

When you consider the cost of building an accounting department—wages or salaries, plus cost of benefits, PTO, IT, overhead, and overtime—these fully loaded costs add up.

The Hidden Costs of in-house Accountanting

Even though working with a CPA or local accountant may give you what you need to comply with tax reporting and audit needs, you're likely not getting the management reporting needed to properly manage and grow your business.

Hidden costs, including additional payments to a CPA for review, clean up of bookkeeping discrepancies, errors, preparation of needed financial reports and audit readiness, mount quickly and are virtually eliminated when you outsource pertinent financial duties.

On average, the annual fee for outsourced services will reduce potential costs by approximately 40 percent over the financial commitment required to hire a full-time staff bookkeeper. 

ACTIONABLE FINANCIAL INTELLIGENCE

We've learned that building a customized reporting package for clients to help  measure how well their company is performing is key. Our goal is to enable our business partners to make smart strategic decisions, enable sustainable growth, improve cash flow, increase profit and reduce risk.

KPIs, Scorecards and management reports help you analyze sales, expenditures, debt, cash flow, and profit.

Ongoing analysis, period-to-period comparisons, identification of risk factors, projections based on experience, forecasting, and daily, weekly and monthly schedules are essential to help CEO's and business owners make strategic decisions.

OUTSIDE PEOPLE MAKE INSIDE PEOPLE SMARTER

With optimized accounting systems that deliver actionable financial intelligence and a dedicated team that provides customized management reporting, CEO’s and Business Owners are empowered to make data-driven decisions. Sharing KPIs with your employees will help them stay engaged and also encourage them to be more productive and think more strategically to reach goals.

In many cases, when businesses transition to outsourced accounting, their in-house financial staff use their knowledge of the business to move into profit generating roles.

A concern we often hear from CEOs when transitioning to outsourced accounting services is that although they’ve outgrown their current in-house bookkeeper, they don’t want to fire them. This employee may be hard working, knowledgeable about the business, and add value to the company. How might their role adapt when switching your bookkeeping or accounting to an outsourced service provider?

Elevate your bookkeeping and accounting employees to higher-value, revenue generating positions

Repositioning an employee who is really valuable and moving them into a role that can be profitable and productive, contributes to the growth and success of the organization.

Building an effective and reliable growth-oriented team sometimes requires thinking -- and moving -- outside normal bounds. Just as it's important to surround yourself with the best people to perform specific duties, it can be equally important to move some responsibilities out of the company's direct domain.

Outsourcing bookkeeping and accounting duties is often the first step in the right direction. GrowthForce can provide a highly reliable, efficient team to act in tandem with your employees. It's a win-win decision, allowing you to move loyal and knowledgeable insiders to other roles within your company, roles that might advance their career goals in a more effective way and boost your bottom line.

Give your business a competitive advantage – get a Smart Back Office and a Full-Service dedicated accounting team...

Get a Quote for Outsourced Accounting Services