Unless you work in finance you probably hate it! Dealing with financials is an important part of every business whether it is an ASX listed company or a startup. Not everyone has a passion for numbers and ensuring that your books are in order, bills paid and invoices received is critical to a business. As such many businesses choose to outsource this element to skilled professionals. So how do you determine when it is the right time to outsource?
Azure Group have been managing our clients business accounting needs for many years and have found that it doesn’t matter what size, make or age your business is, the circumstances around why you are outsourcing play a major role in decision making.
Here are a few tips!
1. Startup
When you are starting a business you need to wear many different hats. Not all of these will come naturally to you and can be time consuming. Your resources, especially time can be limited and it is therefore important that you focus on the areas of the business that are going to drive your growth. Outsourcing your bookkeeping and finances at this point can be empowering and an efficient use of resources. It is also relatively cheap, and an easy area to outsource. Ensuring that your books are correct and up to date is important for your business health and ensures that you don't incur any issues with the Australian Tax Office.
2. Changing to a cloud based software
There are many cloud based software companies and this is a very popular way to manage your books. It provides huge benefits such as being able to load receipts directly into the software from your mobile phone and ensures that all of your data is stored securely offsite. It has also meant that it is easier for a third party to manage for you.
No longer do you need someone to come on site to access your system or give your accountant a shoe box of receipts! They can even access your payroll remotely. These systems are efficient and the people you are outsourcing to are experts, which ensure that the financial cost of outsourcing these functions is cost effective.
3. In-house issues
When you have in house staff there are added costs and potential issues. Staff retention issues can mean long delays and pressure to the business unit while recruitment and training is conducted. By outsourcing this function you can be assured that you have skilled staff taking care of this function consistently and eliminate staff turnover and labour disruption costs.
4. Limited knowledge of local taxes
International groups often set up operations locally in Australia and do not have the accounting software to account properly for GST, PAYG and other taxes. Sourcing talent locally can be difficult and normally there is a tight turnaround to report back to head office.
Technology has played a major role in simplifying cross country communication, making it much simpler to have an outsourced provider manage the day to day finance function of the local business.
5. Outsource vs Offshore
Often when we think about outsourcing we think of offshoring. This is certainly an option and can be cost effective, however this does come with some risks and there is a learning curve involved in managing people offshore.
With the increased ability to implement cloud based software and virtual workforces located here in Australia the option to outsource locally has never been more cost effective as the alternative offshore solutions. Knowing your information is kept in Australia and is managed by locally skilled talent removes some of the risks associated with offshoring.
Whatever stage your business is at, there are certainly options available to outsource your finance function. The key is ensuring you put in place the right solution that allows you to get on with strategically managing your business and its growth.