According to research, 90% of Tech Startups fail, while the failure of 16% is attributed to poor finance and accounting management. While entrepreneurs and CEO’s try to juggle all the roles and responsibilities to grow the firm, overlooking every tiny detail in the company is nearly an impossible task. To take care of their accounting needs, many startups have turned to new emerging technologies such as accounting software to perform daily business functions to combat this dilemma. However, these provide a quick relief rather than a long-lasting solution.
Tools like Wave Accounting and other part-time bookkeeping services in Dubai can assist with the daily management of books and enable non-accountants to perform this function. However, they do not provide you with the human element of knowing what is and isn’t working for your brand. Here are five reasons your startup should outsource — not just automate — your accounting department:
For Tech Startups, the first five years can either make or break your business. However, having a concrete five-year plan with a step by step guide on your finances goes a long way to help the company. By choosing an accounting firm that offers more than just basic data entry, you can master your finances.
An outsourced accounting team also offers the advantage of proactivity; for instance, they can spot red flags ahead of time and notify you about cash flow and expenditure. Having trained eyes on your finances at all times can bring considerable peace, as well as the confidence needed to make intelligent financial decisions that will pivot your company in the right direction.
Startups usually hire an in-house hiring part-time or inexperienced bookkeeping professional as they think this is sufficient during the infant stage of their company. A less experienced bookkeeper can help; however, they will only provide limited insights to your business in the long run.
Outsourcing is an excellent alternative to this, especially since most tech startups have shifted to remote. This will also help decrease overhead costs that hiring an employee would generate, such as medical insurance, leave salary, gratuity and sick leave. Also, the value provided by having an entire team’s expertise, rather than just one internal person (or more), is much greater. It also reduces the risk of non-compliance and unreliable financials – especially for smaller businesses entering the market.
While in-house accountants or bookkeepers can manage daily operations, it might be a cumbersome task to prepare all the company’s accounts during tax season. Professionals can help with this and provide a detailed plan so that the pressure does not build up when it’s time to file returns; instead, it’s an easy, effortless process.
Outsourcing accounting firms have extensive tax experts working with them that are well-versed with every topic in the book and have the sufficient bandwidth to prepare your books with time to spare.
This is one of the most overlooked points; unfortunately, employee fraud is a massive issue in today’s day and age. Statistics reveal that companies with less than 100 employees are the most susceptible to fraud. With an in-house accountant taking charge of all the responsibilities, as the Founder or CEO, you may overlook the finances if you are overworked and overburdened.
With an outsourced accounting firm on the job, you will have multiple pairs of eyes on your transaction processing and reports at all times, which leads to increased internal controls. While fraud can never be ruled out 100%, a dedicated team with expertise in accounting best practices will have a greater likelihood to spot an anomaly than one person who’s probably overburdened and overloaded with work.
Accounting Firms are always up to date on new laws introduced especially in the ever-changing technology sector. A good outsourced accountant will help you find the right software programs you need to use that will help with ease and efficiency. They have tried and tested methods of what will work best for your business, whether you are a small business owner, sole proprietor, or own a large corporate entity.
Accounting and bookkeeping technology is constantly evolving and significantly changed over the last few years. Accounting firms have 24hours access to them to resolve queries, ask for inputs and maintain all the records of your company.
From accounting to advanced bookkeeping to customized management reporting and controller services, your outsourced accounting firm will draft a plan to transform your finance function and augment your staff. It’s not just about maintaining your accounting but also providing a platform to drive profits, improve cash flow, and grow your business. And though it may seem like a daunting task to find the right firm, there are multiple Accounting Firms in Dubai across the UAE that can help you in this regard.
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