Avoid The Mistake That Costs Startups Time and Money | Frank Mastronuzzi

Accounting for startups is a dizzying proposition. Bookkeeping alone takes time, but accounting goes far deeper than that: Ensuring your financial systems are providing you the efficiency you need to grow your business, financial forecasting, cost-flow analysis…

If you’re reading this, you likely own your own startup or have a stake in one. Do you find that you are being stretched too thin with time spent on back-office functions, or that you simply can’t keep up with it all? It may be time to bring in some dedicated accounting partners so you’re no longer distracted from the “big picture” aspects of the business that provide value to your customers.

A joint survey by CPA.com and Bill.com asked 1,700 professionals who work with accounting firms how those firms benefit their business. The results showcase the potential of transformative impact for companies of any size:

• Saves Time: 80% of the respondents say that outsourced accounting provides them more time to focus on their business.
• Easier Accounting: 68% said implementing best practices from their outsourced accounting firm made their accounting easier.
• Increased Profits: 28% report that following advice from their outsourced accountants resulted in increased profits.
• Recommendations: 79% of respondents said they would definitely or very likely recommend their firm.

If your startup earns at least $1 million in revenue, is accepting investment capital, or is experiencing accelerated growth — it’s a good time to consider investing in outsourced client accounting services.

Here are just a couple of the many benefits an accounting firm can provide your business

1. Facilitate the growth of your startup with stronger internal systems

Outsourced accounting firms are experts at what they do. Rather than having to invest time to train new bookkeeping staff and expect them to keep up with the latest developments in accounting technology, an accounting firm is already up-to-date with best practices in the field. Newly implemented time and expense tracking and labor cost allocation allow you to make smarter decisions without having to put as much work in. Reporting systems provide easy to interpret reports and make it easier to identify both positive and negative trends that allow you to optimize for peak efficiency.

2. Create financial forecasts

Your accounting time provides direction and oversight for financial forecasting that projects your profitability cash requirements so you can intelligently control expenses. The accounting team will also help you develop your internal financial processes including accounting controls as well as checks & balances to ensure you stay on track to meet your financial goals.

3. Provide insight on cash flow patterns

Your accounting team will develop cash flow statements that incorporate net income, long term assets, stockholder equity, and liabilities. Through regular evaluation of cash flow, they also help incorporate cash improvement programs.

Originally published at https://www.greenoughgroup.com on April 13, 2020.