Should You Outsource Accounting for Your Portable Restroom Business?

Outsourcing bookkeeping, accounting and controller services has become an increasingly popular solution for small to medium-sized businesses today. Off-site teams of knowledgeable, well-skilled accounting professionals now support growing businesses across the United States. Improved accounting practices can help businesses operate more efficiently, grow faster, and increase profitability. For growing businesses, not yet in the size range to have a complete in-house accounting department, outsourcing may offer a financially practical alternative.

Why Do Small to Medium-Sized Businesses Outsource Accounting?
There are several common drivers of decisions by smaller business owners to their outsource accounting services. For example, lifting the burden of accounting from the business owner frees precious time and energy to do the kinds of work necessary to grow the business—such as sales, marketing and adding-value to customer services. Outsourcing also often saves on accounting costs, compared to totals for employing an in-house bookkeeper, equipment, accounting software, office space, and all other associated in-house costs.

At What Point Is It Time to Consider Outsourcing Accounting?
There are several big indicators that your business is approaching the milestone at which it may make the best sense to start looking at unloading the accounting responsibilities from your own schedule. If you find that any one or more of these fit your situation, it may be time to gather information about outsourcing:
1. Incurring $15,000 or more in total monthly expenses
2. Hiring your first full-time employee
3. Seeking capital, either from lenders or investors
These are indicators that it’s probably time to increase your accounting budget and redirect your own time and energies into the scaling of your business that is apparently underway. It’s recommended to avoid the time-sucking pitfall that many business owners stumble into. That is the rut of hesitating to let go of managing the functionarial tasks of accounting, and continuing to struggle to do it all themselves as their businesses grow.

Pros and Cons of Outsourcing Accounting
Here is a list of some key pros and cons of using outsourced accounting services. This information should be weighed along with factors that are unique to your particular portable restroom business’s operational model, market potential, resources, and other considerations. Consider these to help you determine whether or not the time is right for you to bring on an external accounting team, to continue doing your business accounting yourself, or to hire a bookkeeper or accountant as an employee of your company.

Pro: Frees Up Resources
Arguably, even if none of the three above listed indicators apply to your business’s current status, if you’re spending a disproportionate number of hours on accounting, it may be time to evaluate the practicality of continuing to do that. A business owner can usually make more money by shifting his/her own talents and time from bookkeeping to revenue generation. And, when hiring that first employee, a smaller company is usually well-advised to prioritize adding a sales or service/sales employee who will add as directly as possible to revenue generation, vs. hiring a full-time accountant or bookkeeper.
Also, tools needed to do accounting work properly by modern standards can be expensive. Outsourced accounting services normally roll such costs into their firm’s operating expenses. Avoiding such investments during earlier growth periods helps startups streamline accounting requirements and avoid taking on overhead costs for things that don’t generate revenues or create value for current customers.

Con: Limited Onsite Communications
Having the accounting function off-site changes the communications dynamics. It’s comforting to have the sense of fuller control that comes with having all team members working physically at your own business office. It is also natural to want to have your financial information immediately on-hand. Fortunately, technologies, such as chat systems, now enable business owners to conduct communications and manage relationships with their service providers from even the most removed geographic points conveniently.

Pro: Higher Quality Accounting
Calculating exactly how much a business saves by outsourcing bookkeeping, compared to hiring an accountant or bookkeeper to work on staff involves various nuanced estimates. However, outsourcing for businesses under $50 million has typically been found to save money, compared to the cost of a full in-house accounting department.
The financial results are multiplied by the benefits of bringing the comparatively vast experience of a professional accounting team to bear on your books, vs. an entry-level bookkeeping employee. Savings from preventing costly errors, managing discounts on payables, and gains made due to professional foresight can make an outsourced accounting department significantly more cost-effective.

Con: Risk of Reduced Focus on Your Finances
Some small business owners may sense that to stop being directly involved in routine bookkeeping will lead them to become less focused on cash flow and other critical financial performance indicators. Maintaining constant awareness fortunately doesn’t have to end when the accounting is being done off-site.
Having regular monthly (or at least quarterly) meetings with your business’s accountant relieves you and your staff from cumbersome bookkeeping task loads, so you can make more profitable use of your time. Plus, an experienced accountant specializing in small to medium-sized businesses should be better at identifying key actionable insights from your financial reports that can promote your business goals.

Pro: Peace of Mind
Having your own highly-skilled and experienced outsourced accounting department can allow you the peace of mind that comes from knowing that you’ve got reliable support. A professional team of business accountants and CPAs at a professional accounting firm is normally fully committed to their responsibility to deliver high-quality results.
Of course, you’re deeply committed to providing excellent service to your customers. There’s assurance in knowing that accounting firms actually must operate with even stronger commitment to performance precision, due to the added pressure of ensuring 100% compliance with all local, state and federal tax and business laws.

Choosing the Best Accounting Solution for a Growing Business
Efficient accounting helps a business owner stay on track and understand what is necessary and possible in pursuit of growth goals. Today’s portable restroom businesses have a wide range of options for outsourcing accounting services. Some business owners elect to outsource only Payroll, Accounts Payable, Accounts Receivable, Taxes or other single accounting functions. Faster growing operations may be ready for a full-scale outsourced accounting department.
First, of course, research your options, and narrow your field of choices. Only consider firms that specialize in helping growing small to medium-sized businesses. Ask for multiple references, and follow through with checking some of those. Check BBB reports. Ask for licensing and other validations.
Then, when you’re ready to move forward with outsourcing, the next step is to prepare the kinds of information that an outsourced accountant needs about your business in order to start services.

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