As the future of work evolves, startups are getting more and more innovative every day. And not just regarding their products and services, but how they run their businesses. While outsourcing core business functions may have its strengths and challenges, no single company can do it ALL — and do it all well.
So, what are the pros and cons of outsourcing your startup’s accounting? We’ve outlined everything you need to make the right decision for your business.
PROS
1. Cost-effective
Outsourced teammates do not require the overhead costs a full-time employee would like PTO, health insurance, retirement, et cetera. Additionally, hiring a financial firm like Rooled can get your business access to a variety of experts. Whereas, if you’re hiring directly, you’ll be pressed to find a single hire that can do it all.
2. Reduced fraud risk
Employing fraud prevention and fraud detection strategies is crucial to reducing loss. Every organization should have a plan in place as preventing fraud is much easier than recovering your losses after a fraud has been committed. Forensic accounting services can prevent these situations and uncover financial crimes.
3. Proactive, expert support
An outsourced expert can help businesses avoid taking on too much debt or equity. By carefully targeting key areas for growth, businesses can achieve sustainable growth without putting themselves at risk.
CONS
1. Reduced control over finances
It’s not uncommon for founders and stakeholders to struggle with giving up the reins. Outsourcing your finances means trusting a third-party consultant with critical business data that can make or break your growth trajectory.
2. Decreased accessibility for a consultant vs. full-time employee
Your consultant may not be always-on or available during every business hour. Sometimes responses are more delayed than with a full-time employee. Additionally, consultants may be in different time zones, as remote work has grown increasingly popular.
3. Consultants come with their own methods and processes
Hiring an expert means hiring their expert opinions and with that comes favored processes and workflows that may be different than your business is used to.
At Rooled, we know being a business owner means wearing many hats and juggling several responsibilities. While outsourcing your accounting services does require trust in an outside partner, finding the right one can change your business.
As a founder, it’s important to spend your time where it makes the most impact and managing your finances is an easy burden to relieve. From reliable data and consistent reporting to expert guidance and peace of mind, outsourced accounting can help you improve cash flow and grow your business.