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How Outsourced Accounting Makes it Easier to Scale Your Business

Posted by Jonathan Grabis to Taxes, Accounting, Business Advice

Image of stairs illustrates how outsourced accounting helps small businesses scale and make smart growth decisions.

Here’s a phrase you never thought you’d hear from a CEO who just raised seed funding: “Nobody told me how difficult success can be for a startup.”

 

This may not sound like much of a problem. But the more I thought about it, I realized that many early-stage businesses start out with blazing potential and burn out before they reach it.

Download the Entrepreneur's Comprehensive Guide to Accounting and Tax Options to understand which solution is right for your business.

From everything I’ve learned so far from the businesses we work with, early-stage companies are trying to make a million things happen at once. Most startups we talk to don’t have their operational processes defined right off the bat, so they’re constantly tackling logistical and departmental emergencies all while trying to meet the increasing demands of successful growth.

 

Needless to say, there’s lots of pressure—and success doesn’t necessarily mean you have the resources to simplify what’s on your plate or delegate it away.

 

So, if you had to pick, what single task should you outsource to make your life easier and help you be smarter about scaling?

Your accounting.

 

What it takes to scale your business and how outsourced accounting can help

Besides the time you’ll get back by not doing accounting yourself or the resources your company will save by dodging another costly hire, here are the key ways outsourcing your accounting gives you a major advantage as you scale:

 

You’ll need to be decisive about spending...

During periods of growth you’re going to spend money like crazy to survive, and you will have to constantly decide what to prioritize. Without the solid financial insights to guide you, your decisions will be based on feelings and assumptions rather than facts. Dangerous.

 

...Luckily, outsourced accounting gives you access to that guidance.

My colleague recently met with our client Zapier to hear more about their experience. What they couldn’t emphasize enough was the value they found from having the collective wisdom of an entire team of accounting experts on their side.

 

Experienced accountants have seen many businesses grow and scale. This means they can provide comparative and critical analysis and are familiar with what you should prepare for, how to make smarter spending choices, and which financing solutions will be the best fit for your business model.

 

It’s time to show outsiders (aka investors) they can depend on you:

Even the wealthiest financiers are going to feel vulnerable when they invest in your company. At this point you may have shown your potential, which may be enough for them to believe in your idea. But they’ll still want to see you’re thinking ahead, anticipating obstacles that could stand in the way of your success and getting them a solid return.

 

This is why it is absolutely critical to plan, justify, and budget for each and every expense instead of spending reactively. And whether it’s hiring employees, sourcing vendors, or picking equipment, think at least six to twelve months ahead at all times and listening to experienced outside opinions.

 

Objective accounting keeps you honest inside and out:

A great outsourced accountant understands the weight and longevity of your decisions. They aren’t going to let you go down a path without being realistic and reflective about your company’s performance. Just like you can’t bullshit your investors with vanity numbers, a good outsourced accountant will be there to help you evaluate and critique your strategy’s performance and advise on smart tweaks to make along the way.

 

Someone with outside perspective is also going to be able to flag things that are out of place, especially when it comes to your spending habits.

 

Remember: Being receptive to feedback is key for keeping your business focussed in the right direction.

If you think investors are the only ones who are going to care about this, you’re wrong. Your customers are also deeply invested in your financial know-how and will feel more enthusiastic about using your product or service if they know they can depend on you.

 

A personal fortune teller or crystal ball:

If starting a business was predictable, everybody would be an entrepreneur. But every business is going to be a unique adventure, which unfortunately makes it virtually impossible to create the comprehensive guide to scaling safely. One thing that’s certain: If you’re inexperienced, your fiscal obligations and tax responsibilities will seem to appear out of nowhere.

 

An outsourced controller or CPA can anticipate your roadblocks and opportunities:

With all that experience under their belts, they’ll seem to have an uncanny ability to predict potential issues you may have never even heard of or would be likely to overlook. This includes being one step ahead of your investor's potential questions and arming you with the information they’ll need to invest in you.

 

When it comes to planning ahead for the future, an outsourced accountant will know how to prepare for the things that no one can see coming. This is where their natural ability to “trim the fat” comes into play. Their critical eye will be looking for ways to keep costs down to what is absolutely essential. If you’re anything like our CEO, you’ll see there’s a lot of power in being a frugal business owner and an outsourced accountant can help you see that light.

 

BONUS: How leveraging your outsourced accountant’s connections can help you grow

Thinking of your accountant as your best biz dev liaison may seem a bit unorthodox, but think about it: An outsourced accountant or CPA is going to know a lot of other businesses, which makes them a great resource for networking and referrals which can provide their own value for scaling.

 

Expanding your business almost always means things are going to get more complex, and your accounting is no exception. Hear more about how outsourcing their accounting and taxes to inDinero helped Nomad Good's founders gain the financial foresight to grow their business and make smarter decisions.

Nomad Goods Uses inDinero

About the author
“Jonathan

Jonathan Grabis

Jonathan has been playing in the start-up sandbox for most of his career. He started in economic development before moving on to angel investing. When he’s not helping start-ups and small businesses save time on their accounting, he’s finding new ways to get lost in the wilds of the Pacific Northwest. Get in touch with Jonathan directly at jonathan.grabis@indinero.com or (855) 463-4637 ext. 115.

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