Startups are not the easies to keep afloat. About a third of them will go under within the first 3 years. The reasoning behind this is plentiful as startups are incredibly prone to failing. There are too many things going on when you’re running a startup and failing one or two aspects will just easily destroy your company. However, some of these problems aren’t that hard to overcome. Most of the time it is easily overcome, if they just ask for help from the right type of professionals.
One of the main reasons startups fail is because of poor cash flow management. Which is why we believe that it’s maybe the best idea to actually outsource your finance department. Having a professional that knows what they are doing and have been doing it for a while will ensure that your company does well.
Keeping up to date with numbers like your payroll or monthly finances, is hard and it does take up a lot of time to get everything together. Keeping track of those numbers will sometimes take too much time and will keep you away from running other aspects of your business.
Here are some of the reasons why we believe that outsourcing your finance department is a great choice.
Reason 1 : It Increases Efficiency
If you as the owner of a business is spending more than 1-2 hours a week on accounting and finance related problems, that’s a lot more time than you should be. You should instead spend your time on things like improving operations, improving business strategies or even going out there to get more investors and business partners.
When you hire someone who is a professional in the finance department, you will be able to increase your efficiency exponentially. If they are handling your finance department, they can focus all their time on it when compared to you since you will have so many other things to work on.
This way you will continuously improve your business alongside being able to grow your business. Financial distractions will be a thing of the past and you will be more efficient on a daily basis.
Reason 2 : Ability to Avoid Fraud
Like we mentioned in a previous article, outsourcing a department as sensitive as your finance department has its benefits and we believe that you should try it out. This is because usually if you are a smaller business, you would have only one person doing everything from paying the bills, sending out wages, tabulating the finance reports and even trying to get loans from financial institutions. The problem that arises is that if these duties are not separated, you increase your risk to fraud. Imagine being the only person trusted with all these duties, one day the person might falter and be open to fraud.
The best way to eliminate this is to hire a completely independent party who will separate all these duties to ensure that fraud does not happen.
Reason 3 : You Can Reduce Costs
You might think that outsourcing will be expensive but if you think about it -outsourcing your finance will mean that you won’t need to pay taxes or pay EPF for a full time employee. You only pay a fixed amount monthly to your outsourcing partner.
Reason 4 : More Experience and Quality
With an outsourcing partner, you will get someone who is much more qualified and experienced in the field. This is because they do this all day every day. This way you will always get someone who has the experience to understand and make decisions because they would have seen it all and would know what to do in so many different situations.
This way you know that you have someone who is qualified to handle multiple situations and that you will not be left in the dark if a financial crisis happens in your company.
These are just some of the main reasons why we feel that outsourcing your finance department is a smart thing to do especially when you are a smaller company or business.
Before hiring them, please make sure that they are MBRS certified so that they can help you submit all your company documents to SSM.
If you want to train your staff, head on over to this link to get registered for an MBRS training class today.