When the pandemic hit, it impacted companies in a big way. With small and large organizations forced to close their doors, business suffered for many leaders around the globe. Between transitioning entire teams to remote work and having cash flow issues that many weren’t prepared for, it has been a challenging time for entrepreneurs, leaders, and company owners.
Pandemic or not, cash flow issues are more than just a headache. They’re a “make or break” for your business. The good news is that there are things that companies can do to manage these problems. One main area for consideration is integrating an outsourced accounting team into your business; it can help improve your cash flow and get your company back on track.
There are a few reasons why you may want to contract with an outsourced accounting team. For example, if you wear all of your company’s office-related hats, you may not be able to spend the time necessary on the accounting part of your business. Or maybe it’s just not an area of your expertise.
An outsourced team should bring an incredible amount of experience and expertise and a specialized background that can work in great ways for your company. An outsourced accountant can help you recognize areas where cash flow can be reduced, such as hiring freezes, travel limitations, and spending cuts. Your outsourced accountant can help you identify ways to avoid layoffs, such as asking employees to take unpaid leave or cut their hours. A quality outsourced accounting firm works with all types of companies, including other coatings contractors, and they can pull from that knowledge to help you dig deeper to make the necessary adjustments that your company needs to stay afloat.
An outsourced firm can also bring expertise in up-to-date techniques, strategies for organization, and methods of bookkeeping. When it comes to the financials of your business, having expert recommendations such as these should help you with cash flow and the growth of your company.
Without a firm hold on your business’s financials, you will be fighting an uphill battle of working with inaccurate, outdated, and poor information. This will lead to faulty assumptions about where your business is and what your next steps should be. By allowing an outsourced firm to handle your financials, your company should reap the benefits of any cash flow opportunities or business-building investments in the future.
KPIs, Fraud, and COVID-19
There is nothing surface level about the way an outsourced accounting firm should work. It’s their business to delve into your finances and uncover the good and the bad so that your company is positioned for growth and success. Accounting firms can help evaluate how long it usually takes your company to receive a payment and what length of time is normal for your company to pay an invoice. They can look at your inventory turnover to see how long it usually takes your business to go through inventory, such as rollers and respirator cartridges. When you understand your company’s key performance indicators (KPIs) that are related to cash flow, you will better understand what your company needs to move into the future.
These same KPIs can also show you where any fraud has occurred — or any vulnerable areas where it could occur — within the business. Fraud is more common in small or privately owned businesses because such business owners might not have this type of contracted accounting firm or a chief financial officer (CFO) working with them. With less control and overview of KPIs and potential fraud, many small businesses may be losing money without knowing who is causing it or why. Adding an outsourced firm should give your company an experienced eye and control over your financials. An outside firm can also supply a game plan on what to do when fraud happens and the best tactics to avoid fraud in the future. Having better control over your KPIs can bring you a safer business and a better cash flow down the line because fraud can be stopped before it starts.
Another layer was probably added to your company’s financial discussions with COVID-19. The pandemic brought extra cash flow issues to the table, and many companies sought assistance from various emergency funding programs designed to provide relief to companies struggling with the crisis brought on by COVID-19. An outsourced accounting firm should be able to help you understand the various types of assistance available, what they mean for your cash flow, and how any consequences or negative aspects might affect your company down the road. Whether you just don’t have the time to dedicate to the research or if you don’t feel completely comfortable making those decisions on your own because it’s out of your area of expertise, an outsourced accountant can be that partner that you need to help lead the way.
While focusing on future goals and the big picture of your organization’s performance is inherent to success, the details still matter — especially when it comes to cash conversion. An outsourced accounting team can help to ensure that everything about your invoice and billing process is running smoothly and working to your advantage. They can help send accurate and prompt bills, improve your collection practices, and make sure that customers who are delaying their payments are contacted in a timely manner. Outsourced accounting can help turn those receivables into cash as quickly as possible so that you get what you need to keep your business moving forward.
And they can help free up valuable time for you as a leader or company owner — or for the business altogether. As the outsourced firm takes care of many cash management tasks and any other special projects within your business, you and your team will have more time to focus on your main priority: the future of the business. The end goal is to strengthen the efficiency and company growth when taking on an outsourced financial firm. With a firm managing the finances and your focus back on the general functions of the business, you can be more attentive to bringing in money through the company and, in turn, helping raise cash flow.
Cash flow is the fuel that keeps your business running smoothly, and when that’s in jeopardy, it can be a stressful and overwhelming task to manage your finances in an innovative and smart way that keeps your company afloat. While there are many benefits to hiring an outsourced accounting firm, improving cash flow is one that many business owners are focused on right now. An outsourced accountant helps you make those decisions that you’ve been putting off in order to help you get your business back on track and on its way to a bright and profitable future.