Outsourced Bookkeeping: The Tangential Function

BY Eddy Hood In Outsourced Accounting Services On Sep 01, 2015 With 0 Comments

outsourced-bookkeeping-tangential-functionIf you're a woodworker, you should be working on wood.  If you're a marketer, you should be marketing. Whatever your business does, that's where your energy should be focused.  Anything outside of your core function can become a distraction.

When you’re considering whether or not to outsource, many experts will tell you to think about where you need help.  This article from Entrepreneur states, “Before choosing which tasks you can farm out, take a hard look at your business and determine your strengths and values.”  It goes on to say that you can outsource “tangential processes” while still continuing to perform core processes.  This is one way of dividing the functions of a business and deciding which ones should remain in-house and which should be outsourced.

Core Functions vs. Tangential Ones

How do you decide which functions are core functions and which ones are tangential?  It all depends on the vision you have for your company.  If you’re setting up a company which performs accounting and bookkeeping functions for other companies, then you obviously can’t outsource these functions. They’re going to be core functions and not tangential ones.  On the other hand, if you’re setting up a string of hair salons, then doing hair is going to be the core function whereas bookkeeping will be a tangential one.  In this case, outsourced bookkeeping makes sense.  Similarly, if you’re setting up a marketing firm, you can’t outsource its marketing functions.  But you can outsource its accounting and bookkeeping functions.

A Tangential Yet Important Function

Accounting and bookkeeping tend to be functions that a lot of businesses feel free to outsource.  It’s important to keep your books in order but you don’t necessarily have to do so yourself if it’s not a part of the core service that you provide.  Accounting and bookkeeping are important functions because the final aim of any business is to make a profit.  And managing your accounts can help you to make sure that your income is more than your expenditure.  Although bookkeeping may not be a part of your vision for your company, it’s an important function that will help bring that vision to life.

How Many Functions Can You Outsource?

According to this article from Forbes, “Virtually every internal business function can be outsourced to a firm that will provide the service to  your company, in many instances at a lower cost and higher quality than you could replicate yourself.” Now if you ask many entrepreneurs, they probably won’t agree with this statement.  How can you outsource virtually every internal business function?  That would include outsourced bookkeeping,  sales and marketing, human resources, IT etc.  And if you were to go ahead and outsource all of these things, what would be left of your company?

Being Too Close to See What You’re Doing Wrong

Most business owners want to hold on to all these functions because it gives them a feeling of control.  Your business is your baby, so you’re naturally anxious about everything that’s happening within it.  However, it’s for this very reason that it might be a good idea to outsource some functions.  At times, it’s possible to get too close to your business.  And when this happens, you can’t see what you’re doing wrong.  It’s possible that you’re overspending in some areas and underspending in others.  Or maybe you’ve always had your finances managed by one person but your business has now grown too big for that person to handle.

Getting a Fresh Pair of Eyes to Look at Your Books

If you use outsourced bookkeeping, you’ll get a fresh set of eyes looking at the same books.  And keep in mind that these are professionals who have the experience of working with many other businesses.  So it’s easier for them to see what you’re doing wrong even though you might not be able to do so.  You’ll get an objective point of view with the benefit of years of experience.  Even if you may not be able to see where  you’re going wrong, your bookkeeping service will be able to tell you.


New Call-to-action



My name is Eddy Hood. I've coached over 500 businesses on how to become more profitable. I'm the Founder & CEO of Ignite Spot, and I have mad parallel parking skills.

Leave a Comment About This Blog Post

Subscribe To The Blog

Accounting webinar