Signs That It’s Time To Outsource Your Back Office Operations
When a business is new and everything is still novel and exciting, even boring administrative tasks carry a little bit of a do-it-yourself thrill—not to mention the temptation to save money by keeping it all in-house. But before long, as your business grows and work starts coming in, those tasks are just one more source of stress and one more reason to stay late at the office.
When is it time to hand off your back-office operations to a professional? Here are five signs that it might be time to outsource your bookkeeping and accounting services.
Your business is growing.
A growing business—more customers, more revenue, more employees—is the goal. But eventually, you will come to the point where your volume of business starts to outstrip the resources you have to handle it. Celebrate this sign of success by outsourcing functions like billing, bookkeeping, and payroll to an expert. You and your staff can concentrate on providing the services and products that have gotten you to this level of success. And you can rest easy knowing that your employees are getting their paychecks on time, and your customers are getting the invoices that will turn into more revenue.
Your business is about to grow.
A big move forward—a new product or service, new location, new partnership—means big changes. You don’t want to make changes like that without professional preparation. At the very least, you should bring in an accountant for a one-time project to work out financial objectives and plan for potential challenges. But it also might be a good opportunity to outsource all of your back-office responsibilities to a professional. It gives you a source of financial stability during a time of transition, and it frees your team up to focus on your exciting new enterprise.
You’re making preventable mistakes.
Maybe you’re getting busier with your business and starting to spread yourself too thin. Or, honestly, maybe back-office tasks just aren’t your strength. There’s no shame in it—but there can be mistakes made because of it. Some back-office errors are minor, like little miscalculations that you’ll have to dig into the spare change in your glove compartment to fix. Others are major and can result in unhappy employees, dissatisfied customers, late fees, fines, or penalties. If you find yourself making more of the latter kind of mistake, it might be time to hand those tasks to someone who has the knowledge, experience, and time to execute them. (Read more about common accounting errors that affect small businesses.)
You’re losing money.
It’s kind of counterintuitive—if you’re losing money, the last thing you want to do is spend more money on an accountant. But really, it’s the first thing you want to do, because professional accounting attention can help you figure out why you’re losing money and what you can do to plug the leak. An accountant might know about common problems, potential sources of revenue, and big opportunities that you’ve never even heard of, to prevent loss and set your business up for success. (Read more about how hiring bookkeeping services can actually save you money.)
You’re devoting as much time to accounting as you are to generating revenue.
It’s perfectly reasonable, in the early days of a new business, to handle your own administrative tasks. But as business progresses, take stock of how much time you spend balancing accounts, signing checks, sending invoices, and chasing down late payments—and how much time you spend serving customers and generating revenue. It’s hard to grow a business when you don’t have time to actually do business, so outsourcing back-office operations can free you up to make things happen—and to make it home in time for dinner in the evenings.
