Outsourcing Your finances 101

Early-stage ventures can benefit greatly by outsourcing their financial departments.

When you engage with an outsourced accounting provider, you want to make sure their services make the process easy for you and provide you with insights that could make your startup grow and expand.

In order to do this, you need answers to two main questions:

What financial functions can you give up control of?
What factors should you look out for when choosing the provider?

The three financial functions that are crucial to any company’s success are:

Let’s take a look at these in detail.

Accounting

It’s vital that companies- especially small businesses and startups- maintain a timely and accurate record of their finances. But this is an extremely heavy-duty task involving a lot of time and energy.

Along with this, startups often struggle bearing the costs of an accounting staff. But a simple solution to all these problems is outsourcing. Why not let a reliable third party take care of these challenges while you save your company’s money and focus on making it big in the market?

The basic services that come under the category of accounting include:

Payroll processing
General ledger
Credit and collections
Management reporting
Accounts payable/receivable

Tax planning

Managing a business well includes efficient overlooking of taxes. These include state taxes, federal taxes, income tax on profits, employee benefit compliance, etc. Startups that support research and development (R&D) activities, can find additional opportunities around tax credits.

Therefore, it’s only wise for the company to outsource this function by partnering up with an expert on the matter.

The basic services that come under the category of taxed include:

Tax planning and preparation
Tax stock option planning
Tax compliance
Business formation and entity selection
International tax planning
Business succession planning

CFO (Chief Financial Officer) services

You need someone dynamic as well as sharp to communicate about your financial needs to your employees, the management, investors etc. However, bearing the cost of an expert can be challenging especially for a startup. You want to ensure you get someone intelligent on board, without having to shell out from your company’s pocket.

The CFO services include:

Business planning
Analysis of budgets, variance and forecasts
Internal and external audit preparation
Networking
Representing your company
Creating and maintaining financial policies
Debt funding and negotiating equity

Now let’s come to the factors you should look for when choosing your company. These include:

An experienced team

You want to opt for a company that knows its stuff inside out, i.e, it has players that have impeccable knowledge of the industry, business intelligence, etc.

However, if you find a company that’s not very experienced but certainly checks the rest of the boxes, you can go ahead. Overall, just make sure you are passing on your services to a reliable team.

Cloud-based platform

Earlier, one would need to specifically install programs that they would need to use to fill in the invoices. However, the process is online now, meaning that all you need is an internet connection so that you can work on the cloud.

This has made the process accurate and very simple. Hence, you need to make sure that the company you choose has a cloud-based platform.

Ability to present meticulous and detailed reports

In order to help your company grow, the outside party would first need to study its trends. Based on that, they should be able to provide detailed reports of income statements, cash flow statements, balance sheets etc., so that you get a clear understanding of what’s going on.

A proven track record of streamlined services

The accounting partner should be reputed for its accurate and streamlined services. Ensure that the team is well trained, and the controller is qualified.

Rooled excels in all these services and financial functions.

We are committed to help you grow by handling the services for you in a smooth and efficient manner. Contact us!

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