Pros And Cons Of Using Professional Financial Services

Financial operations, from monthly reports to payroll, are a key part of growing a successful business whether it is a small mom-and-pop shop or a national brand. You cannot know the true health of your business without accurate accounting, being sure of both assets and liabilities. 

When these jobs are done in-house, you or your employees handle the financial duties. This requires qualified staff with up-to-date financial experience and knowledge. Depending on the size of your company, this will most likely take more than one person to accomplish all of the financial tasks required. 

Opting to use professional financial services means allowing a company, led by a team of trained experts, to handle various parts of your company’s financial needs. This can include basic accounting and bookkeeping or it can incorporate business auditing or tax preparation. With many financial services, it could expand to include payroll and human resources

Businesses choose professional financial services due to many factors. As is often the case with new businesses, there is not enough staff with adequate knowledge to handle all of the financial requirements. In fact, half of all small businesses in the U.S. outsource part or all of their financial needs. 

Pros for Hiring Professional Financial Services

Forty percent of all U.S. businesses of varied sizes outsource part or all of their financial tasks to professional financial services. When a number of business owners were surveyed, they expressed such a major interest in outsourcing financial tasks that if all chose to do so, it would push the number of businesses doing it up to almost 90 percent. 

Capitalizing on outsourcing financial services is a growing trend in the U.S. Here are a few pros to hiring professionals: 

  • Meet Deadlines – It is the financial services team’s responsibility to meet all deadlines required.
  • Minimize Errors – Knowing your accounting is being done by professionals, you can be assured that it is being done accurately and will be rechecked to weed out any errors. 
  • Save Money – You are only paying for the service rendered by the financial company saving money on other aspects of paying staff to do the work.
  • Access to Tech – The company you choose should have access to the most up to date systems, technology and resources. 
  • Save Time – Being assured that your financial health is well taken care of allows business owners and their staff to have more time focusing on growing a successful venture. 
  • Access to Team – Instead of having one or two employees dedicated to your company’s financial health, you will have access to a team of experts. When one of the team is absent, the work for your company will continue with another experienced, knowledgeable team member. 
  • Make Choices – You have the ability to choose more services from the professionals you choose or less. It is not set in stone. You have time to figure out what best works for you and your company. 

Cons To Hiring Professional Financial Services

The key to choosing whether to outsource financial tasks is deciding if there are more benefits than drawbacks. Much depends on if you or your staff are knowledgeable and have the skills to efficiently execute bookkeeping, payroll, tax preparation and more. 

The choice to outsource may also depend on the growth of your venture overtime. You may begin with all you need to meet the requirements while finding that as your company grows, you are overwhelmed with the workload of your financial tasks. 

Here are some possible cons to consider when pondering whether to hire a financial service: 

  • Time required – You will still have to spend time reading over statements and staying up to date with your business finances especially when budget planning. 
  • Less Control – All of your finances will be open to review and accountability from the professional financial service you choose to hire. This will be imperative in order for the work to be sound and accurate. 
  • Possible Contract – It is important to be aware of any contract stipulations you have to agree to when hiring a service. You want to be able to have flexibility along with being able to add or subtract services. 
  • Service Fees – If you are a business owner who has adequate knowledge and feel that you can do all of the financial tasks required for your business, then you may spend more hiring a service than doing the work yourself. 

You cannot know the fiscal health of your business without efficient accounting along with proper knowledge of your assets and liabilities. Accurate financial statements like the balance sheets, cash flow statements and income statements are relied on for making your important business decisions and for tax preparation. Using this pros and cons list will help you in considering whether hiring a professional financial service is the right step for you and for your company.  

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.