The Back Office Health Check
July 18, 2014 - 0
Your “back office” (bookkeeping, accounting, payroll) are the services that keep your business running day-to-day, but are very likely not to be your core competency or the focus of your business. You should be focused on building your business, but if you don’t have a regular audit (“health check”) of your back office, you’re not going to reach your potential.
One of the reasons that accounting services are so often outsourced is that despite being extremely valuable to the business’ survival and thriving – which often leads entrepreneurs to hold them close to the vest – these business items are usually a drain on the business rather than a benefit. With the proper handling, however, these drains can become assets that provide measurable and consistent benefit.
Most startups, fast-growing companies, small businesses struggling with payroll and complex tax codes, and those who are not large enough to afford or need a full-time accounting department should look into outsourcing – usually “near sourcing” or sourcing close to home. Near-sourcing has distinct advantages:
The company you hire is close to home, so they play by the same legal rules and requirements you do and cannot hide by closing up shop and disappearing overseas.
The company you hire will be able to offer expert advice on local accounting (and possibly tax) laws because they are right there complying with them themselves.
The company you hire will be easily accessible when you need a personal visit or audit report. This advantage is often understated.
These advantages and others make near-sourcing your accounting, bookkeeping, and payroll obvious for the same reason that you likely outsource tax preparation and/or auditing.
A health check of your accounting is also much easier to accomplish when someone else is doing the bulk of the work so that you can objectively consider the methods, returns, and cash flow being achieved. When you’re personally involved with or have close-knit employees involved in your bookkeeping or accounting, being objective about goals and returns is difficult.
What’s more, a good accounts provider that is familiar with your business financials is a great sounding board for investment ideas or the restructuring of accounts. This can be a valuable asset during corporate turnover, sellouts, restructuring, etc.
So complete a back office health check now and see if your accounting would be better served if it were outsourced to experts so you can focus on core competencies and building your business.