You’ve built a business from the ground up with passion and skill — something that not everyone can accomplish! However, it’s vital to have all your business’s finances in order to remain on the track to reach your goals. That’s where outsourced financial services come into play. To figure out the best strategy for your business’s finances, you must first understand outsourcing vs. in-house financial services.
Defining Outsourcing vs. In-House Financial Services
What Does it Mean to Outsource Financial Services?
When you outsource financial services, you are essentially letting a qualified team of financial experts handle your accounts. Outsourced financial services can include anything from accounting and bookkeeping to tax preparation and business auditing. A small business owner may opt to use this method due to:
- Lack of time to handle finances
- Inadequate financial knowledge and resources
- Limited staff members on hand
What Does it Mean to Conduct In-House Financial Services?
When conducting financial services in-house, you or your employees take on the task of handling all financial duties yourselves. A company may opt to conduct financial services in-house if they have:
- A qualified individual or team on staff with financial knowledge and experience
- The time and resources to conduct all financial tasks
In-House vs. Outsourcing Pros & Cons
Outsourcing Financial Services
When outsourcing financial services, there tend to be more advantages than disadvantages. Here are a few to consider:
- Business owners can rest assured that work will be done without missed deadlines.
- Since the work is being done by financial professionals, it will be done quickly and accurately.
- As work is completed quicker, owners save money in the long run.
- Owners and employees have more time to focus on improving other parts of their business rather than dealing with finances.
- If the outsourced company is a member of groups such as the BDO Alliance (like us!), businesses have access to the most exclusive information, systems, resources, and technology.
- Business owners will need to read over statements and findings to be sure they are still knowledgeable about their finances.
- Owners will surrender some control over their business’s finances in order to gain successful, efficient financing.
- Businesses could be locked into a contract, depending on the provider or service requested.
In-House Financial Services
Like outsourced financial services, in-house finances also have pros and cons to take into consideration. Here are a few:
- Owners have complete control and can oversee all business finances.
- All finances are physically handled within business offices, making it extremely convenient for owners to reference financial documents.
- Owners never have to consult with anyone about their business’s finances if they don’t want to.
- If owners or staff members aren’t fully knowledgeable about finances and financial tasks, money and time will be wasted.
- If an unqualified individual is handling business finances, there may be more financial errors that are overlooked or go unnoticed.
- Owners and employees have less time to focus on other parts of their business such as customer service, obtaining new customers, increasing sales, etc.
Small Business Outsourcing Misconceptions
Perhaps there are many negative things you’ve heard over the years about outsourcing services for your company. However, you may be surprised that some of those things aren’t accurate. Take a look at some of these statements to discover the truth.
“I either need to outsource or conduct all financial services in-house, not both.”
While this may be the case for some businesses, it’s definitely not a one-stop solution. It’s possible for small business owners to opt for a mix of both options. For instance, a company may have an internal employee keep and maintain their books and outsource for audits and tax preparation.
The good news is that you’re free to choose what services you’d like to outsource and which you’d like to do internally. In fact, Walz Group can customize your services to fit your specific needs and goals.
“An outsourced financial staff wouldn’t understand my business and business goals.”
It’s important to know that outsourcing doesn’t mean that you’re handing your finances over to a complete stranger. Our financial and business experts realize that you need an outsourced professional who is aware of how your business runs, what your goals are, and what current strategies you have in place to get there. Rather than taking the task, doing the work, and merely handing it back to you, our experts take time to get to know the inner workings of your business so they can assist you better with whatever service you may need.
“Conducting my financial services in-house is more affordable and will save me money.”
It’s estimated that only 40% of small business owners feel they are adequately knowledgeable about finances. As a business owner, if you’re among the 40% with experience, it truly may be more affordable for you to handle your business’s finances yourself. However, as you focus your attention on financial tasks, other parts of your business may suffer. By outsourcing and letting trained professionals handle your finances, you will save money and time.