Small and medium-sized enterprises (SMEs) face unique challenges in managing finances efficiently. Many businesses struggle with outdated systems, which complicate financial decision-making and sometimes lead to inaccuracies. Cloud-based accounting solutions have opened new avenues for efficiency and accessibility, but navigating the vast array of options can be daunting. That said, modern accounting is about more than just adopting new technology–it’s about having the right expertise and support in place to make the most of your tools. With digitization freeing up time previously spent on manual tasks, finance staff now have more capacity for strategic analysis, judgment and other hands-on work. However, SMEs are unique in that they are small and have limited resources, and they have to do the delicate dance between choosing software, hiring someone in-house, and outsourcing finance support. Each decision carries implications for costs, efficiency, and overall business health.
In this final installment of our Small Business Finance Guide, we’ll explore when and why it might make sense for your business to get external accounting help. We’ll discuss the key considerations for outsourcing, the advantages it can bring, and the signs that it’s time to seek support.
Why SMEs Struggle with Accounting
Accounting is often one of the last areas in which SMEs make changes simply because making changes to financial systems and processes requires extensive planning. Many SME owners manage their finances themselves or rely on basic tools until they cannot. Often, growth demands a more robust solution and applies the pressure to make a change.
Getting into a position where change feels forced isn’t ideal. Some signs that your accounting setup may be falling short include:
- Missed Deadlines: Consistently scrambling to file taxes or send invoices.
- Lack of Financial Clarity: Difficulty understanding where money is going or how profitable your business is.
- Time Overload: Spending too much time on bookkeeping leaves little room for strategic planning or, frankly, other areas where an owner wants to spend their time.
- Growth Challenges: Struggling to forecast cash flow or secure funding due to incomplete or inaccurate financial data.
If any of these scenarios sound familiar, it’s likely time to evaluate your current approach to finances.
The Case for Outsourcing
Outsourcing some or even all accounting services can be a valuable leveller for SMEs. It offers significant cost efficiency by allowing businesses to access experienced financial professionals without the expense of a full-time hire. This can make a lot of sense if the accounting needs are not full-time. We often see split roles, where someone does the bookkeeping along with another job. Sometimes, this works, but sometimes, it creates overwhelm and is inefficient.
External finance support can provide valuable expertise that might not be realistic from an in-house hire, such as regulatory compliance, software optimization, and growth strategies. Outsourced services are also highly scalable, adapting to the evolving needs of your business. Most importantly, outsourcing allows you to concentrate on growing your core business, freeing you from the burden of managing complex financial tasks.
When to Outsource
Knowing when to outsource can be as important as the decision to do so. Consider seeking external help if:
- You’re spending more time on accounting than on running your business.
- Your in-house staff is overwhelmed.
- Your finances are too complex for basic tools to handle effectively.
- You’re preparing for significant growth, such as expansion or new product lines.
- You need specialized expertise, such as growth planning or audit preparation.
What to Look for in a Partner
If you decide to outsource, finding the right partner is crucial. Look for a provider who:
- Understands your industry and unique needs as an SME.
- Offers clear, upfront pricing and scalable service options without long-term contracts (long-term contracts can bring more risk and limit the benefit of how flexible outsourcing can be).
- Has expertise and access to cloud-based tools for real-time insights into your finances.
- Is proactive in communication and willing to collaborate as part of your team.
Final Thoughts
The financial management of SMEs is more than just crunching numbers; it’s about creating a foundation for informed decisions and sustainable growth. Whether you’re choosing software, hiring in-house, or outsourcing, the right solution depends on your business’s size, stage, and goals.
By recognizing when to seek help and choosing the right support, your SME can leverage modern tools and expertise to streamline processes, gain clarity, and unlock its full potential.
This concludes our Small Business Finance Guide. We hope it’s provided valuable insights to help your business thrive. For more personalized advice, reach out—we’d be happy to support your journey.
At Business Sherpa Group, our team of experts, including CFOs, works hand-in-hand with our Cloud Based Accounting team to offer an integrated solution that enhances the capabilities of accountants and SMEs. By uniting the latest in accounting technology with our professional advisory services, we provide more than just financial management; we offer strategic insights and the ability to analyze data in real time. This empowers our clients to make well-informed decisions and supports sustainable growth.
Our commitment to flexibility and adaptability allows our solutions to scale for our clients’ evolving business needs. With our advanced technology and a team of seasoned experts, we guide our clients through the complexities of modern business and help them maintain a competitive edge as they strive to achieve their ambitions confidently. To get started or learn more, click here.
