Leverage external resources for improved bottom line
The ultimate aim of any business organization is to improve profitability and maximize wealth creation for its shareholders. Although the specifics may differ from organization to organization, but every organization will appreciate some leftover after subtracting every kind of expenses from its revenue. This happens when net earnings remain positive and continually improve. This is simply, the bottom line.
Organizational bottom lines could be improved by increasing revenue and reducing cost simultaneously. Revenue maximization and cost efficiency is the end of anything business activities and efforts. This discussion will focus more on how outsourced accounting and finance helps any organization to improve cost efficiency (reduce cost), hence improve its bottom lines.
#1: Improve your bottom line through overhead cost reduction
Different organizations incur various overhead expenses in the cause of their day to day operations. For the sake of this discussion, we shall focus on all the indirect cost an organization incurs as a result of employing and keeping a permanent accounting and finance staff. This could include the hiring and documentation cost, employee’s insurance, leave and vacation, gratuity, family benefits, or any other recurring or fixed expenses the organization incur because that employee is hired to work permanently.
Having a permanent employee has its benefits and an organizations should leverage that. But when cost reduction is inevitable for organizational survival, outsourcing certain functions like accounting and finance could just save the day. Getting a reliable accounting firm to relieve your company of this burden could be difficult and care must be applied in the process.
#2: Improve your bottom line by focusing most of your efforts on revenue generation
Cost reduction is good, but superior revenue generation is better. Every business must remember this and apply majority of its efforts in making sure that their revenue is constantly improving. The money you saved by spending less is just as good as having any money to save in the first place. If your business has enough resource (human and non-human) to execute your income generating strategies, you will be in a better position to determine what process or procedure you need to become more efficient in.
So outsourcing your accounting and finance activities will free up your resources to focus more on generating income. For instance, an organization that has the capacity to employ and maintain 10 staff will benefit more by engaging all 10 on income generating activities than taking 2 of them away to perform accounting and finance activities. With the added revenue generated by these, the organization can afford to hire an external part-time CPA to handle their accounting and finance at a reduced cost. This is both efficient and effective.
#3: Improve your bottom line by tapping into unlimited external expertise and talents
There is only so much an organization can employ. That is the truth and many other essential skills and competences that are required for the overall improvement of your bottom lines may be lacking in your internal talent pool. In order to avail itself of the many benefits different talents and competencies bring to the table, it is necessary for businesses to tap into different external expertise and talents.
For instance, a company may have a house financial good accounting personnel but may need the support of a management accountant or a treasurer. The organization may decided to invest in hiring more and more different staff with specific accounting and finance skills. Or they may decide to send their internal personnels on various skills improvement programs. While this is good, it increases the organization’s expenses and could be better applied at helping other income generating staff get better at making money.
#4: Improve your bottom line by reducing efforts on human resource management
It is a lot easier to engage with a professional who is there to make you happy and retain your business than to manage an in-house employee. External resource persons who see you as a client or customer is most likely going to apply energy and effort at making sure you are satisfied. So you don’t have to worry about the complexities of managing and keeping such motivated or inspired to work. This is a gain to you and your organization. Outsourced CPAs and CFAs are usually already motivated and determined to get your work done well and on time so they can move on to serving another customer.
Remember, motivated and inspired people are easier to manage. They can even add to your permanent employees’ motivation and morale and you want to take advantage of such. So let the outsourced business support service provider do the difficult job of managing and support the professionals while you just pay to enjoy the benefits of their labour. This sounds like a win – win arrangement to me.
Having said all of this, we must acknowledge the difficulty associated with finding the right company to entrust your accounting and financial needs. At DataPrime we support your business by providing high quality premium accounting and financial services to you. We have experience and are committed to helping businesses thrive and win.
Let us help you improve your bottom lines and thrive in today’s complex and highly competitive make please. For more details on our accounting and financial services, email us here or visit our website.