3 Ways Back-Office Services Help Businesses Keep Growing
Smart business owners understand the importance of purposefully managing their growth, but often the good intentions associated with employing effective growth strategies are overwhelmed by the necessity of tackling back-office functions. The time and dedication required to stay on top of critical back-office support services, like bookkeeping, accounting, payroll, human resources, and tax management, create a vacuum that deters from growth-minded efforts.
Regardless of a company’s size, the ongoing burden of administrative management adds up. By trying to cover everything in-house, some businesses struggle to give growth the attention it demands in order to be successful. And since back-office administration is both highly complex and vital to a business’s well-being, it’s simply not an area of responsibility that can or should be deprioritized. In fact, these services are fundamental to the health and growth of the business.
Therefore, companies must identify solutions that enable them to mindfully manage back-office support without smothering their potential for growth. For some, this is an uphill battle, especially if you’ve become accustomed to the idea that back-office functions should always be handled in-house.
To help foster a broader and fuller perspective, we’re highlighting some of the most compelling ways outsourced back-office services can actually propel growth and help businesses keep moving forward.
1. Improved Results & Insight from Bookkeeping & Accounting
Yes, in-house talent can be valuable for keeping your books and finances in tip-top shape. Having the necessary funds to hire and retain enough qualified employees to manage these functions, however, is another story. In many cases, it’s not a reality, and decisions must be made to cut back on support, sacrifice specialized knowledge, or overburden a team member whose time would be better spent focusing on growth. In any of these scenarios, the quality of work suffers—as does the financial insight a company must depend on for strategically growing the business.
With the right mix of outsourced back-office services, on the other hand, you have the opportunity to address bookkeeping and accounting responsibilities in a smarter, more growth-driven manner. You can access a high level of skill, an array of functions, the support of a full team, and built-in protection against errors and fraud, all at a fraction of the cost.
Think of what it would mean to have the following types of back-office services managed in a more thorough, accurate, comprehensive and timely way:
- Accounts receivable (customer invoicing, collections, and payment posting)
- Accounts payable (vendor bill coding, approval, and payment)
- Payroll postings
- Bank reconciliations
- Credit card postings and reconciliations
- Employee expense reports
- Sales tax filing and payment
- Fixed asset accounting
- Monthly financial statements
- Accrual accounting up through audit-ready GAAP
- Revenue recognition and deferred revenue schedules
- Expense recognition
- Multi-entity accounting and reporting
- Foreign currency
- Equity and debt accounting
- Industry-specific metrics and reporting
Doing so would arm the business with the most precise financial data for making smart business decisions that support real growth. At the end of the day, you want to be able to generate meaningful metrics and reports that give valuable insight into your profitability and costs. You can still maintain complete control over your accounts and financial resources, but offloading some of these essential tasks opens the door to a higher degree of reliability, accountability, and opportunity for growth.
2. Smoother, More Seamless Approach to HR & Payroll
There’s no doubt about it: your team counts on payroll and HR administration. While these back-office functions may not seem like the cornerstone of your business model, they’re absolutely fundamental to keeping the company on track. The truth is payroll and HR management for any number of workers can quickly spiral into a major drain on time and resources. Quite frankly, your time would be better spent working on growing the business.
Outsourced back-office services in the areas of payroll processing and HR administration enable companies to ensure these critical functions happen smoothly and reliably. It’s all about optimizing efficiency and accuracy, at a more practical cost than you’d need to handle some of the following tasks completely in-house:
- Support any mix of part-time, full-time, hourly, salaried, and performance-based compensation plans
- Scale from single-state, single-office workforces to multiple states, offices, and tax jurisdictions
- Perform 401(k) processing
- Complete government reporting
- Manage employee onboarding, change management, and terminations/resignations
- Provide as-needed expertise for questions
- Administer and manage benefits, including open enrollment and add/change/drop orders
- Address employee withholdings and benefits contribution rates
- Perform ACA reporting
It doesn’t matter whether you have a small salaried staff working from a single office or a multi-location business with high staff turnover and a mix of compensation plans. Either way, your payroll, benefits and other HR-related functions must be handled accurately and on time. By outsourcing these back-office services, you gain the confidence that they’re being managed smoothly and efficiently while you focus on what matters most: growing the business.
3. More Proactive, Strategic Tax Planning & Preparation
Tax bills can’t be eliminated, but they can be addressed more proactively to head off surprises, minimize tax liability and achieve greater peace of mind. If your business is constantly scrambling to meet deadlines, filing for extensions and pouring over complicated information to complete returns, it’s operating from a place of reactionary tax management. Business growth requires a steadier, more strategic tax planning approach.
When you opt to outsource these back-office services with the right partner, you reap the benefits of proactive tax management and vital support for:
- Complying with and leveraging changing federal, state, and local tax laws
- Managing cash-basis tax liabilities against accrual-basis management accounting
- Determining appropriate taxation of employee benefits provided to business owners
- Taking advantage of year-end tax management opportunities
- Managing income, sales, and use tax liabilities across multiple jurisdictions based on your business’s nexus
- Managing cash availability to cover tax liabilities
Businesses that are focused on growth need both visibility into what lies ahead and ongoing insight to adjust course when needed. If your company’s tax functions are bogged down by limited time, skills, and resources, you can’t maintain the visibility and insight to track effectively toward your business goals.
Ultimately, back office services have the potential to make or break a business’s financial health and growth. When the people running the company become so enmeshed in the day-to-day tasks of back-office responsibilities, they forfeit some of the key advantages of dispensing these functions to outsourced service partners. Business growth necessitates the time, data, cash flow and strategic insight often sacrificed by struggling back-office operations. If you can prioritize these functions by putting them in the hands of experienced outsourced professionals, you allow many more opportunities for channeling growth.
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