According to Entrepreneur Media, 20% of small businesses fail within the first year, and this goes...
Some US companies do not hire a CFO until they generate at least $50 million in revenue. It is a common practice, as many may not have the resources for the role. Even larger companies face similar challenges.
According to an article in Industry Dive, 25% of them do not have a CFO succession plan in place. The more innovative among them are turning to outsourced bookkeeping.
The concept helps any size business complete the month-end close process. It also gives them access to tax and legal expertise. Learn how outsourcing your bookkeeping services can help you stay viable and organized.
Navigating the Complexities of Month-End Close
The month-end close can be a complex process depending on the nature and size of a business. Although it is time-consuming and detailed, it is essential. It involves key components such as:
- Data collection
- Reviewing, documenting, and recording financial transactions
- Reconciliation
- Preparing financial reports
A non-financial mind could miss bookkeeping problems including inaccurate data and discrepancies. An incorrect month-end close could lead to overspending, regulatory issues, and even legal action. Such actions could put a company's credibility at risk.
Benefits of Outsourcing Bookkeeping
According to ZipRecruiter, the average yearly salary of a US CFO is $261,533 or $126 per hour. Even at the lower end of the salary scale, $50,000 a year could be prohibitive for smaller businesses, especially those managing their startup runway.
Companies can bypass this cost with outsourced bookkeeping. They will also benefit from:
- Time savings as it reduces the time spent on month-end tasks
- Access to professionals who specialize in accounting and bookkeeping
- Error reduction through professional oversight and automated systems
Outsourced bookkeeping is also scalable. A company that starts off needing small business accounting can scale up services as they grow. Conversely, larger companies that have hired a CFO may only need bookkeeping support.
How Outsourced Bookkeeping Works
Outsourced bookkeeping gives a third party access to a company's financial data. The process may vary depending on the size of the company and the services needed. It will typically include:
- Recording financial transactions
- Preparing financial statements
- Ensuring ledgers are up to date
- Tracking money that enters and leaves the company
- Monitoring cash flow
- Providing routine financial performance reports
The use of advanced tools and technology can help save time while ensuring accuracy and providing customization for clients.
Companies need to choose an experienced, reputable bookkeeping service that incorporates this type of technology. There should also be trust to facilitate better communication, allowing companies to make informed decisions.
Outsourced Bookkeeping That Meets Your Company's Needs
Outsourced bookkeeping can transform the month-end close process for any business. It also assists with financial management and gives companies access to legal and tax expertise.
Are you a small company that can't support a CFO's salary? Or a larger firm in transition? Outsourcing is a viable option for improved efficiency, regardless of which of these scenarios describes your current position.
Adventum has been helping businesses of all sizes since 2013. Our highly trained, experienced financial management professionals can elevate your strategy and help you navigate financial challenges. We offer accounting services, CFO advisory services, and financial planning and analysis.
Schedule a call to discuss your challenges and needs. We'll work with you to achieve your goals.
