Client accounting services (CAS) is a cutting-edge method of outsourcing accounting services that you should definitely consider. For a small business owner, chances their strongest assets are their own skill and competence as an accountant. Depending on the size of the accounting firm, they can either provide basic accounting services or specialize in some of the more complex aspects of the industry.
The tasks that CAS would take on are similar to the ones that your own, in-house, accounting. In other words, we’re talking about basic bookkeeping, bill payment, handling account receivables, processing payroll, managing cash flow, and even preparing financial statements. With that in mind and without further ado, here’s how small business owners can use CAS to improve their revenue.
It is incredibly important to get your pricing system in check. First of all, you need to understand that the cost of your products/services may determine your competitiveness, appeal, and even be your unique sales proposition (USP). Second, you need to understand that the cost of the product cannot be determined arbitrarily. First, you have the cost of production. Second, you have the marketing costs. Then, you have taxes, operational expenses (necessary to get it on the shelf), and so on. These are tasks that you definitely need some help with.
There are different pricing strategies that you could apply in order to increase your revenue. For instance, some start with a high price and then lower it over the course of time. This allows them to “milk” all the demographics for the maximum amount of profit. Others use low initial costs to penetrate the market and then gradually increase the cost as they get some brand recognition. You see, while completely opposite, these two strategies are known to give results in different scenarios. With some professional help, this will be a lot easier.
2. Business advice
One of the main reasons why people outsource their accounting services, instead of sticking to common bookkeeping, is the advisory function of an accountant. Sure, a professional business advisor and an accountant are not the same things. However, on top of handling your accounting, an accountant can provide you with invaluable insight into a professional. They can help you get an outsider’s view, help you analyze the available data (especially profit-based data), and even offer actionable advice.
Sometimes, you just need to talk to someone who is more familiar with the subject matter. For instance, you need to know if something is legal. You may also wonder whether something involves potential penalties and fines. Remember, these fines could seriously offset your profitability. Then, when you decide to expand your business and hire other services, you can consult your accountant in order to figure out how all of this fits into your already existing business model. Overall, there’s a lot of value from hiring a single specialist or outsourcing to an accounting agency.
3. A new perspective on your spending
From the standpoint of an entrepreneur or a manager, the most obvious money drains are not necessarily as obvious. An accountant keeps records of all your transactions and even analyzes them in order to see if there are areas in which you’re habitually not spending effectively. What does spending effectively mean? Well, tying your capital by buying more supplies than you’re spending in a couple of months is an example. Sure, bulk buying may lead to a discount but it also ties your capital.
Second, it’s essential that you understand that there are so many ways to cut representation expenses. For instance, meeting with clients face-to-face is great from the standpoint of effectiveness but what if you’re attending too many meetings which are not necessarily giving any reward. In the 21st century, digital meetings are more than acceptable. Why not make a combination of the two or start with an online meeting before heading out to meet them in person? This is just an example of a suggestion that you may get from an accountant in an advisory role.
4. Managing various resources
One of the things that the majority of entrepreneurs have trouble with is resource management. Why is this such an issue? Well, because they have a hard time differentiating between all the resource types that are crucial for their success. Money is just one of these resources. There is also time, manpower, and even those more abstract resources like return customers. Now, while your accountants won’t help you with all of this, what they can help you with is assume a part of these other responsibilities. This frees you up to focus elsewhere.
Also, you need to understand that the majority of the time that people spend on DIY accounting goes to data checking. Even here, an accountant is more efficient. This also means that by hiring an accountant, you’ll be more likely to avoid major errors. In the financial world, errors lead to fines, penalties, and even serious legal trouble. Therefore, hiring an accountant sounds like a sensible move. Keep in mind that when it comes to time management, an accountant can do an accounting task a lot faster than you would be able to. This means that the time-saving aspect of this trade is exponential.
5. Efficiency through technology
We live in an era where automation isreshaping numerous industries and accounting is not an exception. Through various accounting platforms, a lot of people have taken control of their own finances. This enables real-time record keeping, storage of all receipts and instances of card use, as well as many other things. The key thing you need to keep in mind is that while these tools are potent on their own, in the hands of professionals, their potential is off the charts. This is another reason why you want to look for the right client accounting services.
Now, the best part is that you don’t even have to pick the right tool. The list of accounting software is quite long and the nuances might elude the layman. While outsourcing, you can trust professionals to choose the right tools. Moreover, these tools are already integrated into their business model and they already have trained staff to handle it. It’s as simple as it gets. Onboarding alone can be a tedious process, which is why, any help in avoiding it, makes a massive difference. Higher corporate efficiency has an easy way of translating into higher revenue.
At the end of the day, hiring professional help in the form of outsourcing is always a good solution. You get to the desired level of efficiency in the quickest possible time frame. It really is as simple as that. Even more importantly, you take a ton of administrative tasks off your back and get to provide yourself and your company with some much-needed legal liability protection.
Seeing as how accounting services are specific and require a ton of experience/expertise, the necessity for outsourcing is even higher. Still, choosing who you outsource to is never an easy task. Do you offshore, onshore, or nearshore? What kind of plan are you going to take and what kind of collaboration are you going to establish? What is your outsourcing budget? All of these, however, are questions for another time.