For a startup to get through its initial phase and achieve recognition requires hard work and a unique value proposition. But success may require reducing labor costs, prompting startups and small businesses to consider outsourcing for high levels of productivity with expert-provided solutions. Essentially, outsourcing is a process of using third-party service providers to handle various business functions.
Back-office functions that can be considered for outsourcing include hiring, training, accounts payable and finance as well as brand-building and company restructuring, among many others. In recent years, outsourcing has become a common practice for businesses looking for experts to handle their critical processes and to enhance their competitiveness in the global marketplace. An overview of available outsourcing services includes:
Accounting: Outsourcing accounting can be one of the most helpful ways to make sure the company’s finances continue to operate smoothly and are in compliance. Some of the other potential benefits of opting to manage a company’s accounts externally include:
Time savings: Outsourcing accounting for a startup through a trusted service provider can save a huge deal of time, which is extremely valuable to any new business. It is an efficient option as it helps leaders to focus on other more strategic elements of running a business. While you are generating profits for your business, you will need a financial expert to ensure everything in the financial sector is safe, secure and in order. By reducing the concern of handling various financial activities, you can work more efficiently on your business plans, knowing that your accounts are being safely looked after.
Money savings: Outsourcing can save your businesses money as the overhead costs related to hiring and hosting an in-house accounting team are exceptionally steep, particularly when you consider cumulative aspects such as salaries, payroll taxes, benefits, equipment and other related office materials. It can also save your company office space while benefiting from the expertise of certified financial specialists.
Better financial advice: Outsourcing provides unbiased insights into your most critical financial information, data and transactions. An outsourced accountancy firm offers the advantage of an extra set of eyes on business records, which will maintain everything in order, painlessly and accurately.
Strategic accounting insights: Most outsourced accounting professionals not only possess years of specialized experience but also work with the appropriate accounting software, which allows them to manage finances in the most proficient way possible, customized for specific commercial aims, needs and goals. When you hire a third-party service, you will also benefit from a deeper level of financial insights associated with your industry. It will assist you to refine your internal strategies and speed up the overall success of your business. As the service provider will be liable for your finances, you will see reduced risk of human error or compliance issues.
Finance: A lot of budding companies have begun to outsource financial operations for better handling and reduction of costs, as the annual cost of outsourcing is generally less than the salary of a financial executive. For the success of small businesses and startup companies, it is important to work with a finance expert to make practical and realistic predictions for the business, which can be seamlessly done by outsourcing finance services from a third-party provider. Financial service outsourcing will provide several benefits, including:
Enabling the business to make informed and smart decisions based on past performance, which is classified and recorded in the financial information of the business.
Allowing businesses to decide prices along with a good profit margin through cost calculations and estimates.
Forecasting and budgeting of prospects and future opportunities, revenues and costs that accommodate projected business development.
Keeping track as well as controlling and reducing business expenditures, growing revenues and managing business resources.
Ensuring strong cash flow by keeping a check on tied-up money in the business and eliminating capital shortages.
Financial guidance to raise business profits by recognizing aspects that negatively impact the business.
Data that allows the client to calculate growth, decide objectives and develop analytically.
Human Resources: Having a proper HR department can help make a business grow or contribute to its failure. The main function of HR is to hire and maintain the employee roster, but it is also one of the biggest expenditures of a startup or small company. To cut costs and efficiently maintain a headcount, outsourcing an HR service is a great way to advance your company. Attaining a reliable, outsourced HR service can also deliver advice on how to develop a competitive compensation package for employees at a beneficial amount for the company. Outsourced HR is not limited to hiring, advice and layoffs but offers a variety of additional benefits such as:
Assistance with payroll and benefits expertise from experts without incurring the heavy overhead costs of an in-house team. By outsourcing HR, you get guidance and support from a team of credentialed and experienced HR on benefits, recruiting, payroll, compliance and HR technology specialists.
Reduced employment compliance risks, as well as up-to-date knowledge of employment law and regulation complexities that change constantly. A proficient outsourced HR provider can enable your business to be current with any recent changes to employment regulations and can assist you to stay on top of the current state and federal rules for employment.
Providing better benefits and perks to your people. With the help of an expert HR team, you can design a benefits package that is attractive and competitive as well as one that helps you to retain existing talent and bring on new talent.
Eventually, if your company wants to have its own HR department, you can start building its base with the help of an outsourced HR service. The outsourced firm may help your company to build and manage an entire infrastructure of processes, procedures, policies and employee communications, centered around modern technology.
CFO: An outsourced CFO is a financial expert who works as a strategic financial consultant for companies and businesses on an hourly, part-time or contractual basis. Outsourced CFOs, also known as partial CFOs, have experience in high-level financial roles at different phases of growth and work with companies of all sizes on almost everything from strategic planning to brand modeling and financial projections, among many other segments. Outsourcing CFO services offers small companies access to financial experts with a wide range of experience and who are dedicated to keeping up with best practices in the market. This service can assure flexibility to access expertise whenever needed, instead of hiring a full-time, expensive in-house CFO. Third-party CFO services add significant value to all types of businesses in numerous ways, including:
Financial analysis and planning, including predictions, budgeting and assessing the long-term and short-term financial goals of the business.
Analysis of the financial strengths and weaknesses of the business and providing recommendations for improvements as well as for scaling up.
Evaluation of the financial potential of new product ideas.
Reviewing cost and pricing structures to improve the business’ growth margins.
Assessing financial information and reporting systems, with recommendations for improvements for the company
Advising on the different means to raise capital; advising on debt/equity mix.
Creating financial presentations for the company’s board and investors.
Support through financial reporting, by providing expert suggestions.
Analysis of M&A opportunities, including post-acquisition operations and financial forecasts.
Source: Escalon Services