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Should You Hire a CFO for Your Small Business?

Most business owners know that the people who are hired will make-or-break the success of the company. If you bring in the right team members, then you will have a wide range of skills and expertise to handle every problem that may be encountered. Not only will you be able to avoid potential problems, but an experienced team will help with future growth and development. Whether you are hiring an entry-level employee or a CFO, you need to consider the way they will interact with your team.

It is a big decision to hire a new employee, especially if you only have a few people working for the company. So, don’t rush into the decision. Instead, look at the skill sets that are necessary and the way the person will fit in the company. Sometimes, it makes sense to hire a new employee. Other times, you might find it beneficial to outsource the tasks so that you can avoid the cost burden of another employee.

Overhead Costs of Hiring an Employee

If you are thinking about hiring another employee, then you need to evaluate the overall costs that will be added to your overhead expenses. Inexperienced employers only look at the hourly wage or salary of the employee when factoring the expenses. But, there are other cost burdens that need to be factored into the decision:

  • Salary: The wages for the employee is the base of the financial burdens that you need to bear. Look at the monthly and annual cost that will go towards that person’s paycheck.
  • Employment Taxes: Some taxes are withheld from the employee’s check. But, there are other employment taxes that need to be carried by the employer. Calculate the amount that you will be paying in taxes, worker’s compensation, and insurance.
  • Benefits: How much money will be needed for the benefits package that is offered? Most companies provide health insurance, life insurance, Paid Time Off (PTO), sick leave, and other benefits. These costs can add up over time.
  • Office Space: If you are hiring another employee, then you need to make sure that you have desk space available for them in the office. A small floorplan might make it difficult to add another person in the room.
  • Computer Equipment: Depending on the type of company that you have, you might need to provide a work computer, desk, or other equipment. If you are bringing in a financial employee, such as an accountant or CFO, then it is often necessary to provide a computer and cell phone.
  • Hiring and Administrative Costs: Also, consider the money that you will spend on job advertisements, onboarding, and training. Ongoing administrative costs are needed for payroll processing, management, and benefits administration.
  • Training Costs: Even if you find an employee that fits your desired profile, the person will need to be trained on your company practices and procedures. Not only will initial training be required, but ongoing education is often necessary to keep the person current in the industry.

Break-Even Point of Hiring an Employee

As you evaluate these costs, you need to consider the break-even point of hiring the employee. Yes, the person will be able to contribute to your team. But, will they be beneficial enough to generate the amount of cash that will pay for the expense of bringing on another employee? It’s usually worth the expense if they will bring in more profit than what you will be spending on the overhead costs. Otherwise, you might consider the option to outsource the accounting tasks instead.

Evaluating the expenses in advance will help you make the right decision for your company. There’s no doubt that you will benefit from the expertise. At the same time, you also need to ensure that you are making decisions that will add to the profitability of the company.

Sometimes, there are instances where you need to hire an employee that won’t be profitable on paper. For example, certain overhead tasks need to be addressed, and it is hard to measure the ROI of spending money on the expenses of that employee. If you are bringing in a sales rep, then you can measure their productivity by looking at the amount of business that they bring in the form of sales. On the other hand, it is hard to make the same measurement for an administrative employee, such as a secretary or assistant.

Should You Hire a CFO?

Small businesses often hire a few specialized employees, plus lower-level employees. Eventually, you will need to look at options to bring in management-level staff, such as a CFO, CMO, and more. These positions vary from one industry to the next. So, you need to consider the needs of your company before rushing into the decision.

There isn’t a hard rule that should be followed to determine when you need to hire a CFO. Some business owners want to know a sales quota or revenue level that needs to be reached in advance. But, you can’t plug in the business numbers to see if it is time to hire a CFO. Instead, you need to evaluate how the CFO will contribute to your company and whether you are prepared to carry the burden of the additional employee.

Here are a few signs that it might be time to hire a CFO:

  • Your abilities aren’t strong enough to match the financial requirements of managing the books for your company.
  • It is time to expand your company and grow to higher levels of success.
  • You are too busy, causing you to fall behind with financial tracking and reports.
  • It is hard to make important business decisions because you don’t have enough financial information to make informed decisions.
  • You are ready to bring someone in who will identify weaknesses in your business strategy, helping your company position for future growth.
  • Your business is struggling, and you want to turn things around before everything fails.
  • Financial strategy is lacking in your daily, weekly, monthly, and annual planning sessions.
  • You are thinking about bringing in investors or stepping into acquisition opportunities.
  • You don’t have professional accounting experience, so you don’t understand the laws for taxes and business management.

Even if you have experience in the financial industry, eventually the growth of the company will keep you spread too thin. As a business owner, you don’t need to do everything on your own! Instead, look for the best ways to utilize your time and expertise, while hiring others to fill in the gaps. Eventually, the growth of the company will exceed your experience, and you won’t have enough time to get it all done.

Keep in mind that some of these tasks can be handled by an outsourced accounting team. If you aren’t ready to bring on the expenses of a full-time CFO, then you might learn more about accounting services to see if you can save money without sacrificing the quality of services that are available for your company.

Don’t Overlook Lower Level Financial Tasks

Hiring a CFO won’t be the answer for some of the lower level financial tasks that need to be addressed. If you are having a hard time with bank reconciliation and data entry for invoices, then hiring a CFO won’t fix that problem. Instead, you need to start with basic financial services that are available from a bookkeeping team or small business accountant.

Most companies in the beginning stages only need these basic financial services. Our accounting team can help with tax preparation and the ongoing reporting and tracking that is required. Eventually, you might consider the option to hire a CFO if those services are still needed at a later date.

Professional accounting services are important to create a financial system that will set your company up for success. This step delays the need to hire a CFO or a full-time financial employee because you will have control over the tracking and invoices for the company. Be strategic with your plan so that you can manage expenses and plan for the future at the same time.

Benefits of Outsourcing

When you are ready to hire a CFO, you might consider outsourced CFO services as well. Many companies are seeing the benefits of outsourcing accounting and CFO services, helping to minimize the cost of hiring new employees. Compare the expenses of bringing on a full-time CFO with the cost of outsourcing the tasks that are needed, and you will see that you can probably save thousands of dollars every year with outsourced services.

If you are interested in learning more about outsourced financial services, then Easier Accounting is here to help. We offer a full range of outsourced accounting options, including payroll, ongoing financial management, tax filing, and more. Our goal is to cater your services to match the needs of your company.

Learn more about the ways that Easier Accounting can help your business. Call us for more information about the ways that we can help with your business growth. We are always here to answer your accounting questions: (888) 620-0770

6 Steps to Help You Get Started with Outsourced Accounting

Financial management in your business is arguably one of the most important responsibilities that will impact your future success. If you fail to keep up with accounting and financial tracking, then you could be facing cash flow problems and other avoidable issues. Unfortunately, too many small business owners are carrying so many responsibilities that they can’t keep up with the financial requirements of running the company. One option that you might consider is to look for outsourced accounting services.

Most business owners know that financial tracking and accounting is important. But, they just don’t have enough hours in the day to keep up with these tasks. When you determine that you need help with bookkeeping and accounting, then it might seem like a logical choice to hire another employee. Instead of rushing into the decision to bring on another employee, consider the benefits of outsourcing these tasks.

Not only will you find flexibility in the accounting packages that are offered, but you will also see that outsourced accounting is a great way to reduce overhead costs. Outsourcing is much more affordable compared to hiring another full-time employee! You don’t need to worry about office space or computer equipment. Plus, you can tap into the accountant’s expertise without paying a full-time salary every month.

If your workload is adding up and you can’t keep up with the ongoing demands of owning a company, then we invite you to talk to our team for more information. Here at Easier Accounting, we are always available to answer your questions and help you choose the right outsourcing solutions for your business.

Here are a few steps to help you get started with outsourced accounting:

Step #1: Be Clear about the Tasks You Want to Outsource

It can be hard to hire the right outsourcing team if you aren’t clear about the scope of work that you need help with. Instead of looking for a general outsourcer, find a team that offers specialized experience in the areas where you need the most help.

For example, instead of saying that you want to hire an accounting expert, put together a list of specific tasks that you need the outsourcer to do. For more business owners, accounting outsourcing often includes some of the time-consuming tasks that are difficult to manage:

  • Payroll
  • Bookkeeping
  • Accounts Payable/Receivable
  • Tax Preparation and Filing
  • Financial Reports
  • And More

Being clear about your goals will make it easier for you to find the right services that match the needs of your company.

As you are preparing this list, it is helpful to have information about the financial transactions and needs of your company. Your accounting team will likely ask for information regarding the number of transactions that move through your account each month, annual revenue, the number of clients that you have, and the number of employees that are on the payroll. Providing these details upfront can help you see if the outsourcing team can support your business needs.

Step #2: Find an Outsourcing Team with Experience

While it might be tempting to pass the busy work to a stay-at-home mom in your family, you might run into many issues because of the lack of experience and subpar workflow. The best solution is to find an experience outsourcing team that has many years of experience in the industry. Tapping into this expertise reduces the likelihood of problems so that you are prepared to set your business up for success.

One thing to consider is the size of your company and the experience that the accounting team offers for various types of companies. For example, if you are a small business owner or a start-up company, then make sure that your outsourced accounting team has helped with similar types of companies. This hands-on experience is an optimal way for you to avoid common problems that are encountered by business owners.

Step #3: Consider the Costs

One of the reasons why small business owners avoid outsourcing is because they are worried about the associated costs. If you are boot-strapping to get the business off the ground, does it make sense to spend money on outsourced services?

The truth is that outsourcing is usually more affordable than hiring a full-time employee. When you are working with outsourcers, then you can pay for the time that is used, rather than supporting the full paycheck and benefits for an employee.

Plus, you need to consider the opportunity costs of forgoing these services. For example, if you are managing your own tax filing and you don’t have a lot of accounting experience, then it is likely that you are missing out on important write-offs. These mistakes could cost you thousands of dollars in tax expenses over the years. Instead, it is better to let a team of professionals handle the details so that you have an optimal outcome for your tax filing.

You can set a monthly budget for outsourcing so that you know how much these services will impact your overhead costs. Then, look at the potential financial benefits that are possible in the future. Having a team of accounting professionals can be the best thing that you can do to improve your business cash flow and avoid common problems that are encountered by small business owners.

Step #4: Compare Your Options

Now that you have decided that outsourcing is right for your company, the next step is to compare the companies that offer the services that you need. Don’t limit yourself to your local area! Many accounting services and other types of outsourced services can be completed remotely. There is no reason to meet with the outsourcing team face-to-face.

Limiting your choices to the local area will decrease the options that are available. Instead, focus on the services that you need and don’t worry about the location of the outsourcing team. The only consideration is to ensure that you choose an accounting company in the United States so that the team is familiar with the local laws regulating tax filings.

As you are comparing companies in the industry, look at the reputation of the various outsourcing teams. Online reviews and business information can give insight into the company so that you choose a team that you can trust. Since you will be handing over financial details, you need to make sure that you hire a reputable outsourcer that will use discretion with your business information.

Step #5: Schedule an Interview to Learn More

Most outsourcers will offer a complimentary consultation so that you can learn more about the services that are available. Narrow your choices down to your top two or three accounting services. Then, schedule appointments to talk to each team so that you can learn more about these companies.

This conversation will give insight into the customer service that you can expect. It is also an opportunity for you to ask questions to ensure that the services are a good fit for your business.

Step #6: Maintain Regular Communication

Now that you have a reputable outsourcing team to help with your business, it might be tempting to let them handle all of the financial details. But, you need to stay informed about the financial trends in your company. Regular meetings are important so that you can stay current with cash flow, anticipated sales, profits, and more. Your accounting team will handle the mundane busy work, and then provide the reports that are needed so that you are always up-to-date about the health of your company.

Ongoing communication is important for tax filings, payroll processing, invoicing, and more. Set a system and make sure that you stay consistent with the things that need to be addressed in the future. A good accounting team will keep you updated about the work that is being done. Make sure that your team is always available to answer your questions should the need arise.

It is common for financial questions to come up throughout the year. Your accounting team can be a valuable resource so that you can get professional advice about your company. Instead of waiting to talk to your accountant when tax season rolls around, consider the benefits of maintaining communication throughout the year.

Learn about Outsourced Accounting

Do you love the idea of hiring an outsourcing team to help with the accounting needs of your company? Then right now is a great time to schedule a consultation with our team here at Easier Accounting. We will gladly discuss your needs and help you identify the services that are a good fit for your business.

We have many years of experience in the accounting industry. Our specialty is focused on small businesses and entrepreneurs. We know the common concerns that come up for people who are getting started with new business efforts, and our goal is to help you avoid these problems.

Are you ready to learn more? The experts at Easier Accounting are always here to help! We know that outsourcing can be a powerful way for you to leverage future business results. So, we will work hard to support your financial goals and business efforts. Call for more information: (888) 620-0770

5 Steps to Automate or Outsource Your Business Finances and Improve Efficiency

How many hours do you spend each week on menial tasks that distract from the bigger responsibilities of owning a business? As a small business owner, there are many things that you need to manage to ensure that you are taking care of the long-term success of your company. If you fail to keep up with these tasks, then you could be missing out on future growth and success.

The problem is that business owners often get stuck in the rut of spending time on simple tasks that could be outsourced or automated. Don’t be fooled into thinking that you need to micro-manage every aspect of your company. Instead, you should be looking for ways that you can implement systems and automation that will simplify the necessary tasks, freeing up your time to focus on business development and employee management.

Improving the efficiency of yourself and your team is a great way to maximize results and take your company to higher levels of success. We live in an amazing time when technology can be used to assist with everyday activities. These automated services and features can decrease your stress and free up your time to do the things that you love. Remember, time is money!

Steps for Automation in a Small Business

These are some of the automation and outsourcing steps that you need to implement for your company:

  • Monthly Bills: It is inevitable that you have monthly bills that need to be paid. These costs include everything from the utilities and rent payment, to equipment lease costs, office supplies, and inventory purchases. As the business owner, you shouldn’t be caught-up in the details of managing these expected costs. Many of the monthly expenses can be automatically drafted from your bank account, or you can hire an accounting or bookkeeping team to handle the details. For example, consider setting up a fixed average payment for your utilities, so that you can have a checking account draft or a check that is sent out for an expected amount every month.
  • Debt Payments: Many business owners have debt balances that need to be paid every month. In addition to regular utility and rent payments, you also need to put together a strategy to stay ahead of these debt payments. You have the option to make the minimum payments, although it is wise to pay more than the minimum if you have the resources available. Ideally, the balance should be paid in full every month. Work with an experienced accountant or bookkeeper to put together a monthly budget and debt pay-off plan. Then, you can schedule these payments to be sent automatically through online banking systems.
  • Payroll: There is no doubt that a lot of time and energy can go into payroll management. Not only do you need to work through the hours on employee timecards, but you also need to consider payroll taxes, withholdings, benefits, and more. Many business owners agree that payroll seems to take up an entire day of the week. What could you do with all of the extra time? There is no reason for you to manage payroll without a team to help. Talk to an accounting service to learn more about payroll automation and outsourced services that handle all of the details for your company. You can rest assured to know that payroll checks will be cut promptly, creating stability for your Not only will these payroll services take care of cutting the checks, but the services can also include ongoing tax paperwork and employment tax payments throughout the year.
  • Business Costs: Tracking every penny that is spent is essential so that you can maximize your tax deductions when it is time to file your business taxes. But, it can be a hassle to keep up with these tasks throughout the year. If you aren’t managing your transactions and receipts, then you might be paying more taxes than necessary! A good accounting system can make it easy for you to manage these costs. Combine a great software with an experienced accounting team, and there is no longer a need for you to spend your time on this busy work. Your transactions will be managed, and you can rest assured to know that you will be ready for your annual tax filing.
  • Cleaning: Most business owners will admit that they have scrubbed the office toilets at some point. Even though you are capable of using a toilet brush, doesn’t mean that you should be doing the dirty work. Automate office cleaning by using a maid service to manage these tasks. You can have a custodial team come into the office to scrub, vacuum, and clean. Also, consider other cleaning services such as a shredding bin that is picked up on a regular basis.

Tips for Implementing Automation in Your Company

When you see the benefits of automation, it is easy to see why you want to jump in and automate as much as possible. These systems can reveal daily tasks that are unnecessary, freeing up time and manpower to focus on things of more importance. Sometimes, the tasks can be consolidated to simplify the process for everyone involved.

But, you need to be cautious about implementing too many changes at once. Start small, and then work to increase the automation that you are using. Often, these changes are quite significant for a company, which means that they can have long-lasting effects if the automation isn’t implemented in the right way.

Start with the easiest, smallest process and then look for ways that you can continue to add onto these efforts. Look for one time-sucking process that is difficult to manage, and then find a solution for that single task. Then, you can move on to the next task, and keep going until you have optimized your business automation efforts. You will see that you can eventually create streamlined operations in a way that is organic and manageable for your team.

Hire the Experts to Help

Even though you have many years of experience as a business owner, it doesn’t mean that you have the experience necessary to implement the right automation strategy. In many situations, the best thing that you can do is hire an expert team to help. This experience can be a valuable way to optimize your results and ensure that the automation is set up to create the long-lasting results that you desire.

For example, if you want to simplify your payroll processing, then it might seem like an easy task to buy a payroll software and make the changes in-house. But, you don’t know the things that you will be missing along the way, which could cause a domino-effect because of the problems that occur. Instead of making the mistake of implementing a faulty system, it is worth the time and expense of bringing in an experienced accounting team who knows how to get it done right.

Not only will you avoid the stress and headache of a problematic payroll system, but you can also rest easy to know that everything was setup to match the regulations established by the IRS. The combination of automation with an experienced outsourcing team can be a dynamic way to improve your business systems and optimize your results going forward.

Learn to Rely on Automation Tools

Another common pitfall that business owners encounter is not trusting the automation tools that they are using. As a result, the automation tools are working to simplify business systems, but the work is completed twice because the business owner feels the need to check everything manually.

Once you have the right system in place and you are using a tool with a great reputation, then there is no reason for you to micro-manage every step of the automation. At the same time, you can also implement a system of checks and balances to catch errors and ensure that the system is working correctly. For example, you might be using a trusted accounting software, and also schedule a time for your accounting team to complete a reconciliation on a monthly basis. This system ensures that the numbers are handled correctly, and you don’t need to worry about crunching the numbers each day.

You can also rely on the automation tools by creating systems that bring the data to you. Setup reports that you can receive at certain times, helping you to stay current with the financial trends in your company. These details can help you make informed decisions as needed.

Do you need help with automation and outsourcing for your payroll, taxes, and other business financial systems? Easier Accounting offers the assistance that you need! Our team is experienced in small business accounting. We have the goal to reduce your stress level by handling the financial details. You are always invited to contact us to learn more about the way our services can be used to improve your business results. Call us right away to learn more about our company: (888) 620-0770