Starting a new corporation? Congratulations are in order, as are a few words of caution. While the time has never been better to pursue your dream of business ownership, you will face some unique challenges. In fact, businesses today face higher costs than ever before, particularly in a few specific areas such as administration, professional fees, technology, and employee-related costs.
Outsourcing can help ensure that you’re able to save money while still benefiting from professional service delivery, but which are the most important services to outsource? We’ll delve into this below.
Why Consider Outsourcing?
Before we touch on the most beneficial areas to outsource, we need to address the question of why you should outsource at all. For some companies, it will not make sense to outsource at all. However, for most firms, outsourcing at least some services can help achieve a number of goals.
For instance, you’ll find that it can increase efficiency, reduce and control your capital costs, cut down on labor costs, help to start new initiatives more quickly, and even give you important advantages when competing against more established competitors. Now that we’ve cleared that up, let’s learn a bit more about what you might consider outsourcing and why.
Industry Research and Reporting
You need to do a great deal of research and legwork prior to starting a new corporation. The right service provider can deliver some important advantages here. For instance, the right partner can help you choose the right business name, prepare your articles of incorporation, file documentation with your state government, create an incorporation statement and deliver online access to company documents. Your partner can also help you obtain a federal tax ID, state-specific certificates, and more.
We’ll begin our discussion with what might be one of the most overlooked outsourced services out there. Bill pay systems offer a number of advantages – they provide business owners like you with the same benefits they do to consumers. A bill pay service allows you to take advantage of a full accounts payable team with experience and expertise handling financial needs just like yours.
You can schedule payments to vendors, suppliers, distributors, business partners, lenders and more. You can track payments over time, view your payment history, and ensure that you’re staying on top of your financial obligations. You’ll also find that this service allows you to benefit your bottom line in a number of ways, ranging from taking advantage of flexible net billing to early payment in return for discounts, and more.
Payroll is one of the most commonly outsourced business needs, and for good reason. By outsourcing this, you gain access to significant benefits, ranging from access to expertise and knowledge to the ability to cut costs and streamline your operations.
For instance, choosing to handle payment processing in-house requires that you have employees to deal with those tasks. Each employee increases your company’s costs and liabilities – vacation time, sick time, unemployment insurance, workers’ compensation insurance, etc.
Of course, you also need to pay those employees. By outsourcing pay processing, you don’t need to hire additional staff. You also gain the benefits of working with an experienced team that knows pay processing inside and out. Your employees will be able to access their W2 information and other forms, and tax filing becomes simple and easy.
With the right partner, you also get help with the new hire and onboarding process. This ranges from access to W4 forms and I9 forms to ensuring that all records are filed correctly and the timer is started for obtaining benefits like health insurance through your firm.
Perhaps the single greatest benefit of outsourcing your pay needs is to gain access to guaranteed accuracy. Every single error makes your business liable – IRS fines can quickly mount, putting your company not only in hot legal water, but in financial danger, too.
Another important service to consider outsourcing is your bookkeeping. While it might seem to make sense to keep this process in house, you can actually gain access to important benefits by outsourcing it. Obviously, you would be able to avoid hiring bookkeepers to work within your company, allowing you to reduce costs by cutting down on pay-related costs, but also through the elimination of additional benefits that would cost your company money.
Of course, you also benefit from improved accuracy and timely reporting in bookkeeping. The right company will actually provide you with a guarantee of accuracy, as well as vital professional services, such as clearing transactions, posting transfers, creating and renewing invoices, posting payments and credits, reconciling accounts and more.
A trusted bookkeeping partner will also provide you with a review of income and expenses, tagging of fixed assets, dealing with accounts payable, profit and loss statements, and even monitoring your business goals to ensure that you remain on track.
A final service to consider outsourcing is your sales tax remittance and reporting. For businesses responsible for collecting and paying sales tax, this can be an onerous duty. A reputable partner can prepare sales tax reports for you, automatically file them with the state, ensure that you’re collecting the right amount of sales tax in the first place, and more. For any business owner who has ever struggled with sales tax collection, remittance and reporting, the value of this service is obvious.
Making Your Decision
For new business owners, the most important thing is to realize that outsourcing business processes is vital. The second most important is to understand that outsource providers are available, but they vary in terms of what they offer. The right company can offer you access to all of the outsourced services discussed above, as well as numerous others.