The definition of outsourcing is to work (or contract) with an outside supplier to obtain services (or goods), in place of an internal source.
You may have been wondering what outsourcing your accounting may look like. Perhaps a coach or colleague have suggested that you “should” outsource to be successful, to grow, to gain sanity, or to find a balance in your personal life. Or maybe you have already dabbled a bit with outsourcing only to experience less than stellar results. Believe it or not, accounting tasks can be one of the easier forms of outsourcing. Let’s take a moment to explore the benefits and a few suggestions to help you implement your outsourcing options.
Leverage your time
Outsourcing is all about taking something you don’t like to do, or don’t know how to do, or don’t want to do, and then hiring someone who excels at that task resulting in freeing up the time you dreaded doing the tasks in the first place. Often, this new free time gets put over in the “personal” block. However, at the very least, leveraging this new free time also means you get to spend more time creating and generating revenue – which is your first responsibility as CEO of your business. Currently, this is the only safe way to physically clone yourself.
Outsourcing fails when we hire for a skillset that is below or at our own level. Remember, if you don’t like accounting in the first place then the skillset you may be drawn to would be someone that has the same or less confidence and knowledge than you. Hiring at that level will not leverage your time, in fact you will end up spending more time training, supporting, and reviewing the work of a lowered skilled worker. What a huge pain in the tush AND gigantic waste of your time.
Successful outsourcing requires that you seek out a consultant-level provider who has more experience, training, or skills than you have. Hiring someone with more experience than you will set you up for success. An added bonus is that this level of provider will come to you with the answers and solutions to the pain your business is experiencing. Don’t be nervous outsourcing to a consultant that is more knowledgeable than you. Smart growth includes being confident enough to hire those that have strengths and skill sets that we don’t have.
Dedicated and focused
Yes, you can do your own accounting. Every hour you spend on the administrative tasks of your business is another hour you are not focused on revenue generation. When you outsource, that experienced person is dedicated and focused to meeting your agreed upon outcome. Let’s face it, as the CEO of your own business we rarely get dedicated and focused time to do ANYTHING; this is why doing any task that requires a higher level of attention and focus ends up being frustrating and avoided.
Outsourcing Implementation Plan
For successful outsourcing there are a few areas to consider to figure out the type of outsourcing that will work best for your business.
What is your gross revenue?
Below $100k – this level any money spent on outsourcing actually takes money out of your pocket to feed yourself. Rather than outsourcing, the ADI Accounting Team recommends hiring a business consultant who will work with you to automate and adjust your DIY habit. We find that often DIY business owners work harder against their natural habits and don’t use their tools efficiently. We’ve even seen them get bullied into using tools that they may not need. Keep more of your money and sanity by getting a little help with some one-on-one training.
$100-$150k – this is the stage where the business is supporting your current, and even future, needs. Find the key areas that outsourcing would really leverage your time for more revenue production rather than personal time. If your goal is to gain more time-off or a balanced personal life, the first thing to do is look at how you are delivering your services and pricing structure. ADI Accounting Team recommends outsourcing to a consultant that will help create budget and projections for the business and fine tune your accounting processes. There may be an investment on the front end, but the end result will bring empowerment and knowledge from your finances for growth and you’ll get that leveraged time you are desiring.
Over $150k – here you will be looking at multiple outsourcing areas, so the key is to make sure your new team works together, and smarter, than you were on your own. That means implementing processes, roles, desired outcomes, and making an investment so this new outsourced team has the right strengths in the right roles. Accounting definitely will be one of those areas that you will look at outsourcing: seek out that consultant-level provider who is process oriented and has potential for growth themselves as your own business grows.
ADI PRO TIP:
You spend eight hours per month updating your accounting. You despise it and find a solution to outsource it. (YEAH!) What can you do with those same eight hours? For this example your billable rate is $100 which makes the value of YOU doing the bookkeeping $800. Outsourcing the work you hate for less than $800 is a small win. Now leverage those eight hours and create or generate actual revenue: that is pure money in the bank.
What are your strengths, and more importantly, your weaknesses?
You may already know what your strengths are, but have you taken the time to know the weaknesses? While this does mean skill set, let’s take it a little further and talk about leadership strengths and values. Knowing a little bit more about your team (outsourced or employees), allows you to manage and lead. ADI Accounting Team recommends using the Gallup Strengths Finder test when outsourcing to individuals.
Support team members will naturally be friendly and eager to do whatever you ask. The key to a successful outsourcing relationship is whether or not they are able to sustain the implementation of those tasks. Knowing their natural strengths will provide insight if they are in the right role. For example, if your weakness is implementation (HINT – that skillset is required for doing your own accounting) then you will seek out that strength in your outsourced team member.
Outsourcing will and can be business changing for you as long as you intentionally create a plan for growth. Blindly moving forward just because someone else “shoulded” all over you is a sure equation for failure. We would be more than happy to discuss outsourcing options with you, all you need to do is visit our Consultation Page to schedule a free call.