What would you do if I gave you an extra 312 hours a year? That's 39 business days to be exact! If you feel like there's never enough time to run your business, you might find this next part interesting.
People have built new companies in 39 days. They've trained for marathons, doubled the their income and even written books in 39 business days.
How You're Spending 312 Hours a Year on Your Accounting
Most business owners can easily burn 1.5 hours a day worrying about the finances. Here's how a typical day might look:
10 minutes logging into the bank account to assess the damage
10 minutes fighting with a vendor over a bill that's been paid
10 minutes shuffling through paperwork to try and find a purchase order
30 minutes driving to and from the bank to make a despoit
30 minutes trying to forecast your cash in order to meet payroll on Tuesday
As you can see, it's pretty easy to spend at least 1.5 hours a day on your finances.
A good outsourced accounting company can take 80% of that off of your shoulders which ends up being 1.2 hours a day. That adds up.
1.2 hours a day x 5 days a week x 52 weeks a year = 312 hours!
What Your Outsourced Accounting Company Can Do for You:
Enter all that Data
Your outsourced accounting ccompany should be responsible for getting most of the data into your accounting software. This means recording all of the transactions that occur on a day-to-day basis including your debit card spending, your credit card spending, automated payments out of the bank account, etc. If you have a good outsourced accounting company, they will also be very good at classifying those transactions into the right accounts. For example, if you spend money on Google Adwords, they'll book it as a marketing expense and not as meals and entertainment. Not all outsourced accounting teams are good at this by the way.
Reconcile Your Accounts
Your bank, credit card and loan accounts should be reconciled at least once a month. Your outsourced accounting company is a good fit for the job. It can be tedious depending on your business model and your time is better spent on developing the company. Some business owners tell me that they prefer to do this themselves so that they can know where the cash went. If it were me, I would have the outsourced accounting company do it and then send me the reconciliation report to review. After all, you didn't go into business to be an accountant.
Help Pay Your Bills
If you have bills that fall outside of automatic draft payments in your bank account, your outsourced accounting company should have a set time each week, or at least each month, to process the bills and get them ready for payment. They should then report back to you with the bills that need to be paid so that you can sign the checks.
Invoice Your Customers
Your outsourced accounting company may or may not be a good fit to help with the invoicing. As long as they can reference a software to capture things like time and expense, then you should be fine to outsource this task. If you don't have a software system to relay this information, you may want to invoice yourself or ask your accounting team to help you implement a good software.
Run the Payroll for Your Employees
Payroll can be a headache. There's a lot of hoops to jump through, and this is a great task to get off of your plate. I can't count the number of times I've walked into a business that's done payroll themselves and is struggling with IRS notices, tax liabilities and incomplete 941 reports. It's not pretty.
Publishing the Financial Statements
Your outsourced accounting company should be creating a balance sheet, a profit and loss statement and any other custom reports that you or your investors rely on in order to see the financial position of the company.
Make sure that your outsourced accounting company has a deadline by which they have to have these reports to you each month. At Ignite Spot, our hard deadline is no later than the 15th of the following month.
Forecast Your Cash
Some outsourced accounting teams are capable of doing higher level functions like forecasting cash flows. This is a great skill to have on your team and will help you to make more informed decisions.
Identify Strengths & Weaknesses
Your outsourced accounting company needs to do more than simply deliver financial statements to you each month. If you have a good team, they will also find ways to make you more money. For example, we were working on a client recently that manufactures product in China. The Ignite Spot Accountant realized that the manufacturer had increased the price of a part from $1.05 to $1.15 per unit. He took the time to call a meeting with the client and the manufacturer to address the increase. The client ended up switching to a different manufacturer and it saved him just over $2,000 a month.
Create a Weekly Snapshot
The whole point of having an outsourced accounting company is knowing where you stand. Most business owners don't need a daily report on the finances, but a weekly snapshot is extremely helpful. Having this report alone will save you time throughout the week by not having figure out where you stand.
I will say this - A good outsourced accounting team can save you 312+ hours a year. A bad one can add that to your plate.
Are You Ready to Save 312 Hours this Year?
At Ignite Spot, we're trusted by over 500 businesses nationwide. If you're tired of spending too much time on this stuff, fill out the form below and one of our accountants will call you for a free consultation.