In 2020, there was record-breaking new business growth in the United States. The sheer number of new businesses created was 24 percent higher than the prior year. New employer identification number (EIN) applications broke records in quarter three.
These new EIN applications took place despite the pandemic that has swept around the world.
In the 1930s, an Austrian economist described this phenomenon of new business growth in times of uncertainty as “creative destruction.” In short, this creative destruction happens as people come up with new ways to overcome challenges, such as the inability to shop in person due to lockdowns or health concerns. Plus, many companies folded or scaled back during the pandemic.
In today’s blog, LongSchaefer’s trusted business advisors look at why outsourcing your accounting needs as you decide to grow your business.
Understand Financial Functions
It’s exciting and successful as your business takes off! But it’s hard to know what you don’t know about the financial functions and find the time to manage the books and your other priorities.
Brushing important accounting and recordkeeping tasks to the side can hurt your bottom line because you aren’t paying attention to KPIs that denote your business’ financial health.
You also may not understand when tax payments are due, which creates stress for you as a business owner.
So how do you tackle this problem? Keep reading to find out.
Outsourcing Your Accounting
Your business will thrive when its financial functions are in working order. Business owners quickly realize they will either need to carve out the necessary time to manage their organization’s finances or hire someone to do it.
Hiring a CFO is one option. However, most new businesses do not have 40 hours of work for a qualified individual. This is when outsourcing CFO services can be a practical solution.
Benefits of Working With an Outsourced CFO
Lower Operating Costs. Any change that reduces costs without endangering operations is generally positive. Many businesses simply don’t have enough cash flow to justify hiring a full-time, in-house CFO for your accounting.
Increased Efficiency. Inefficient operations harm your organization from the top-down. A real advantage of outsourcing your accounting is that behind your outsourced financial planning experts at LongSchaefer stands an entire team of accountants, partners, consultants, and bookkeepers at your disposal. All of us have areas of expertise that bring to bear for your success. When you outsource financial activities and have them analyzed by an independent third party specializing in finances, your company becomes more efficient.
More Flexibility. When a business owner wears too many hats, one is bound to fall off or fall by the wayside. Outsourcing your CFO functions and financial accounting will allow your organization to become more flexible. Rather than working on something outside your core business, you have more flexibility in dealing with your immediate environment and activities. Changes that make your organization more agile make it better able to excel.
Reduced Risk. Outsourcing the financial functions of your company may reduce the risk your business or organization faces. Outsourcing payroll, for example, can reduce risk because experts now handle these financial functions and look for improvements.
New Ideas. Outsourcing CFO and accounting duties brings new ideas to the table. Small businesses must recognize that outsourcing to an expert and trusted business advisor gives your business a clear advantage with their complex financial activities.
High Growth Potential. Many organizations face limitations when trying to take on more activities because their current staff is spread too thin. Outsourcing financial activities can allow business owners and other staffers to engage in better-targeted tasks as part of your core business model.
Talk to LongSchaefer About Outsourcing Your Accounting Needs
Outsourcing financial services for your business and organization can help you operate more effectively and efficiently. With LongSchaefer’s requisite knowledge of different organizational structures and financial expertise, we can help you create innovative changes in your organization.
If you would like to learn more, please call LongSchaefer’s trusted business advisors at 513-245-0300 to speak with one of our professionals and learn how our outsourced CFO and accounting services can help enhance your business success.