3 Business Support Services That Will Optimize Your Business Capital
Hiring full-time employees to execute business-essential functions can become extremely expensive. Businesses looking to optimize their capital should consider business support services. Outsourcing critical functions can save money and time for your organization.
Making an accounting mistake or payroll error results in confusion and wasted time. If you’re not skilled in leading the accounting and financial tasks, then you will benefit from bookkeeping services.
What functions can they fulfill? A professional service will cover these areas:
- Accounting and bookkeeping
- General ledger entries and reconciliation
- Forecasts, projections, and analysis
- Limiting costs
Choose how you want to optimize your capital. A support service can take over the financial operations and scale as you grow, or you can have them advise employees to become the managers.
Executive support will formulate a cost-saving strategy that transitions operations back to you or evolves as your business does.
Pouring over the numbers and books against tight deadlines at tax time can create undue hassle and stress.
If you get the numbers wrong, you can end up being audited and pay hefty fines. Focus your energies on operations, sales, or engagement.
Save your organization money by outsourcing the financial operations. You can eliminate costly benefits packages, but you can also save your organization from internal fraud.
An external audit or CFO will have the knowledge and experience to prevent and detect internal fraud. They can also implement checks and balances to keep everyone honest.
Know Your Finances
It’s important to know you don’t have to completely give up financial operations. It’s recommended you stay current on your books.
If something doesn’t look right or add up, then ask the accountant to explain. They should understand every single line on the profit and loss statement.
All of your management decisions depend on the numbers. Are you making money? Is there an unnecessary expense?
Having a business management support service can be the difference between your or organization folding and or enjoying success.
Making sure your numbers are correct for tax time is half the battle. The federal, state, and local governments want their due payment.
Do you know every exemption and loophole in the tax code? Not knowing the tax law is a detriment that could cost your business thousands of dollars a year.
New tax laws are added every year and trends shift with legislation at every level of government. A professional service can advise you on financial and political climate as it pertains to tax codes.
Like the accounting portion, letting a business support service handle your taxes will save money and time. Hiring a friend or someone not completely qualified is a critical mistake.
Skilled professionals will make sure you pay everything you owe on time and help you avoid government audits and penalties that can ruin a profitable year.
With your taxes straightened out, you can start planning for the following year. Rate increases from vendors can be capitalized and passed to your clients. You will know exactly how much money you’re paying in taxes per transaction.
In conjunction with your team, business support services can develop cost-containment strategies that avoid unnecessary waste and taxes.
Tax preparation will be especially helpful as you prepare to purchase or sell large assets or holdings. Capital gains taxes and assets might concern someone who is not familiar.
Luckily, capital gains taxes are at rates much lower than income tax; however, it can be extremely complicated.
Business support services understand the rules and separate forms needed to define capital asset transactions.
This is a perfect solution if your business is too small to hire a full-time accountant or you’re too busy.
You may want your company audited to discover information flow breakdowns or weak financial controls.
A business support service should have a customized approach to your business. No two businesses are exactly the same. An audit service should treat yours uniquely.
Conducting an audit to ensure compliance is a great way to avoid the government conducting its own audit.
Mergers & Acquisitions
Audits don’t have to be just to improve processes or find mistakes. They can be used in the evaluation of a possible merger or acquisition.
A potential buyer wants to know if the numbers they see have another story behind them. It’s possible a business owner may be hiding losses, hemorrhaging money, or have weak financial controls.
The profits and margins may be great for a company you’re looking to merge with, but it’s possible they owe back-taxes. Many times business owners do not know they are going to be hit with a penalty.
You are entitled to know if the company you’re joining or acquiring is financially and legally set for the future.
If you are preparing for a sale, it’s important to know the valuation of your company. What is a fair price for your robust business?
Maybe you’re on the other side of the coin and want to know how much a company is worth versus what they are asking.
Audits examine more than revenue and expenses. They will examine items such as an aging trial balance and hunt down bad debt to factor it into the total valuation.
It’s hard to put a price tag on a name, but if Nike were to sell its company the name alone would have a significant price. Professional audits do their due diligence by figuring out what the name brand means to the market.
There are inevitably going to be subjective numbers during valuation. Someone wanting to sell a business will value brand name and reputation a little more than someone buying that same business for its distribution channels.
Optimize Your Capital
Your capital should work for you. Hiring business support services eliminates hiring in-house departments and paying salaries and benefits.
The money and hassle you save can be used to expand operations, increase sales, or develop brand loyalty.
If you need a professional business support service, contact us to serve all your needs.