As a business owner/operator, there are limits on what you can do yourself. That’s why an increasing number of businesses are turning to service providers to outsource a growing number of non-core functions. Outsourcing has the potential to save business owners money while removing some of the day-to-day responsibilities from their never-ending to do list.
Outsourcing can also allow key team members to focus on critical priorities in their business, such as growing revenue, delivering high quality products or services, and providing excellent customer experiences.
Many factors make the decision to outsource non-core functions more attractive than in the past. Indeed, the decision has traditionally been considered a challenging and costly endeavour. Often, outsourcing back-office functions resulted in additional trips away from the business to drop off records and long delays in receiving financial reporting in return, rendering the process largely impractical.
However, significant developments in technology and new innovative solutions from outsourcing partners has increased the opportunity for local/onshore accountancy services delivered over the cloud. These developments have created better opportunities for companies to move away from traditional on-site or in-house solutions to find industry experts across the country that meet their unique business needs. This can provide the best opportunity to realize personal ambitions.
There are many different functions of the business that can be outsourced, including human resources, IT, bookkeeping, and payroll.
For many business owners, bookkeeping is an afterthought. They often leave it to the last minute because they’re either too busy with day-to-day operations or are overwhelmed by the volume or complexity of keeping their bookkeeping up to date. This last minute preparation creates the risk of late or inaccurate financial submissions, including bank reporting requirements or more costly risks due to the potential for severe penalties for late tax filings.
Adding more difficulty, new businesses spend time on growing revenue and delivering an exceptional customer experience. As a result, less time is spent on financial reporting or analyzing financial statements.
Keeping the books up to date and making business decisions on trusted financial reporting is essential in today's increasingly competitive markets. It’s more important than ever before for owners to gather a timely, relevant picture of how their business is operating. This will allow the owner to make decisions using real-time financial data, identify trends or outliers in operations, allow them to adjust purchasing and scheduling decisions, and spot theft or make investment decisions on an informed basis.
Change is a constant when it comes to employment law. Regulations around minimum wage, termination pay, paid statutory holidays, and overtime are always evolving. This can make payroll processing confusing for many, especially if they are operating in more than one province because the laws will vary by jurisdiction.
Some companies may have a higher employee turnover rate. For every departure, owners must complete a record of employment (ROE) for both Service Canada and the former employee. Additionally, T4s need to be issued to all employees who worked by the end of February.
Non-compliance can be costly with fines and penalties for late or delinquent filing, or failing to make the proper deductions.
Many business owners often lack the budget to support human resources (HR) personnel on a full-time basis. Even having an employee take care of HR on a part-time basis may be a bad idea if they don't have an HR background or are unfamiliar with the workplace legislation and employment standards. HR mistakes can lead to fines or a decline in employee engagement.
Functions such as employee recruitment, employee relations, termination support, return-to-work programs, and workplace harassment investigation are often better left to a professional to ensure that they foster an engaged, productive workforce, and a legally compliant workplace.
Managing finances and finding funding
A challenge for many organizations is finding the right level of finance and accounting support. In many cases, a CFO or controller will typically manage financing, cash, fundraising, and compliance.
However, many owners don’t need to hire them on a full-time basis. Instead, they take on all those tasks and stretch themselves too thin. Trying to run the business while also managing finances and searching for potential tax credits isn’t a good strategy for an owner or the business.
When to hire a service provider
A business owner usually requires a professional if they don’t have the relevant expertise or experience to perform a task themselves, or there are critical deadlines, requirements, or risks involved.
Owners should look to outsourcing if they want the convenience of someone else taking care of certain business needs, but not the cost of hiring in-house. Outsourcing also removes the need to cover off illness or absence requests, removes the risks of any potential fraud, and reduces errors involved in having an on-staff provider.
The ultimate goal with outsourcing is for a business owner to have their needs met with high quality, timely and relevant services from trusted professionals that bring deep knowledge of the industry in which they operate.
How BDO can help
We’ve helped companies in a number of industries outsource various business functions so that owners can spend more time on growing their business. Our team of professionals has experience with providing companies with the bookkeeping, payroll, HR, and CFO and controller services they require. Think of us as a one-stop shop for your outsourcing needs. For more information on how we can help, contact our Outsourcing Accounting Services team.