Are your financial records constantly getting backed up? Do you feel stuck when it comes to finding ways to increase profitability and scale your company? You might be great at handling the day-to-day scheduling, but how do you feel about tackling all the financial aspects and daily accounting tasks of your company? In this article, we’ll explore how outsourcing your finance and accounting helps streamline your logistics operations and adds financial efficiency to your company.
The logistics industry deals with enough proverbial traffic jams; don’t let your financial processes be one too.
Eliminating Budgeting Bottlenecks with Outsourced Logistics Accounting
The first way that finance and accounting outsourcing streamlines logistics operations is by eliminating budgeting bottlenecks. Keeping track of your expenses to align spending with your goals is a crucial component of running a successful business. In fact, the Harvard Business School encourages business budgeting, citing that it ensures resource availability and provides your business with a financial roadmap.
With an outsourced logistics finance management specialist, you infuse clarity into spending and resource allocation. You know what needs to be done to control your money and save for your goals. For example, if you want to purchase a new truck by the end of the year, an outsourced professional can determine how much you need to save each month and work it into your budget. This alleviates financial constraints and allows you to work toward your goals.
Improves Financial Reporting
Reviewing accurate and up-to-date financial reports gives you insights into how your business is performing and where changes might be needed. Although accounting software has come a long way in recent years, the internal reports generated aren’t always reliable without adjustments. For example, an invoice might not be cleared out of accounts receivable or an expense might be designated to the wrong account. Without oversight in these areas, you could be missing crucial insights.
An outsourced logistics accountant can streamline this function in your business and provide you with the necessary reports on a regular basis. For one, an outsourced accountant can review your transactions and ensure they default to the proper accounts on your balance sheet and income statement. Then, they can make any adjusting entries that might be needed. The final output reports that you can use to make informed decisions, such as knowing when it’s time to bring on another truck or what revenue streams are performing the best.
Reinforces Strong Cash Flow Management
Cash flow management is important for every business. In fact, 82% of small businesses attribute failure to poor cash flow procedures. Cash flow management controls the money flowing in and out of your company. Without the proper controls and attention to your cash flow management, you risk overdrafting your bank accounts, creating poor relationships with vendors, and increasing your stress levels.
Outsourced logistics finance management professionals can streamline your cash flow management by timely updating your records for receivables and payables, evaluating the ideal date to pay invoices, and informing you when it’s time to seek external funding. These insights are only attainable with current and accurate records, which is why an outsourced finance and accounting professional is so beneficial for logistics companies.
Achieving Cost Savings through Logistics Accounting Solutions
Despite what you might believe, outsourced accounting and finance professionals can actually save your business money. For one, outsourced professionals work on your schedule, using your technology. This means they can jump in when your business needs help. Your logistics company is only paying about half the cost of what a stateside resource would be. For example, if your business is growing you can more easily scale your finance team without all the overhead and recruiting cost making growth more affordable.
Cost savings also come in the form of transparency and clarity in your finances and accounting. Logistics accounting outsourcing professionals have years of training and expertise, which are directly applied to your business. They can help you uncover inefficiencies, where costs can be cut, and how to grow your revenue by evaluating the transactions in your financial statements. This type of oversight and expertise is crucial to maximize your profit margins while continuing to grow your company.
Adds Efficiency to Operations
Finance and accounting outsourcing also infuses efficiency into your operations. Instead of waiting to catch up on your records or send investors financials when you get a free hour, your outsourced professional makes these items a priority. For example, right after the month closes, your outsourced accountant can complete the bank reconciliations and draft internal financial reports. Current and accurate data gives you the most insights to make informed decisions.
Additionally, accounting and finance professionals can serve as the tone at the top of your organization, directing tasks and streamlining operations. For example, your team members who handle accounts payable or process payroll can direct time-consuming repetitive tasks to an outsourced accountant. Instead of the burden falling on your team to move operations along, your outsourced accountant or finance professional can take on this role. Efficiency often translates to cost savings and growth, which is why it’s important for your logistics company.
Learn more: Outsourced Accounting Efficiency in the Logistics Industry
Manages Financial and Operational Risks
Every company faces risks, especially logistics companies. For one, there are financial risks, such as price volatility, increased competition, inflation, and rising interest rates. These risks can cause serious financial implications for your business. For example, if your business relies on financing to purchase new trucks, what happens if interest rates double? Will you still be able to purchase trucks? Outsourced finance professionals identify applicable risks in your business and find ways to lower the impact.
Furthermore, logistics companies are also subject to operational risks. What happens if a truck breaks mid-shift? How about if a truck is in an accident? Outsourced finance professionals evaluate these items and ensure your business is protected. Maybe you have a backup truck ready to go in case of a breakdown or take out an insurance policy that provides a quick turnaround time. Finding the right avenues to lower your risks is essential to protect your company.
Unlocking Business Growth with Strategic Accounting Outsourcing in Logistics
Growing your business isn’t always easy, especially with new competitors popping on the market and prices continuing to increase. With the expertise of an outsourced accountant, your dreams of business growth can become a reality. First, your accountants can help you put together accurate financial statements to apply for new loans and lines of credit to purchase new trucks.
On the other hand, accountants and finance professionals can track down ways to cut costs, including building a business budget and forecasting future growth. By prioritizing your growth goals, you can scale your company more easily. Trying to tackle business growth can be difficult if you don’t have the time to dedicate to analyzing your finances and transactions. By passing this burden off to outsourced professionals, you can focus on other value-added areas of your business, like securing new contracts.
Finding the Perfect Outsourced Accounting or Finance Professional
Logistics finance management is important to maximize financial efficiency and improve your overall business health. This makes it essential that you take the time to find which outsourced individual or company is able to best meet your business’s needs. Here are some factors to keep in mind as you start your search for an outsourced logistics accountant or finance professional.
Skillset
The skillset your outsourced financial professional or accountant brings to the table is important. For example, some accountants will file tax returns, while others might only provide bookkeeping services. Take the time to evaluate the skillset your outsourced professional offers. In many cases, you might find that you need help in more areas than one, like budget creation and cash flow management.
Credentials and Background
An outsourced professional’s background is important to inquire about. What types of degrees do your accountant or financial professional have? Most professionals hold a bachelor’s or master’s degree in finance or accounting. Similarly, your outsourced professional might hold a credential, like a Certified Public Accountant (CPA) or Chartered Financial Analyst (CFA) designation.
Industry Experience
One of the most important factors to evaluate is the industry experience of your outsourced finance professional or accountant. Do they have experience working for other logistics companies? It can be helpful to read past reviews and ask for references to understand the type of industry experience the accountant or finance professional has.
Pricing
Although the value received from an outsourced professional far exceeds the upfront cost, it is important to be aware of the pricing structure. Does the professional charge a flat fee, or is the pricing on an hourly basis? Figuring out the upfront costs can be a great way to avoid any unexpected fees.
Getting Started
Does it sound like your logistics company can benefit from an outsourced accountant? How about an outsourced finance professional? These professionals have the ability to streamline your operations by eliminating budgeting bottlenecks, improving financial reporting, reinforcing strong cash flow management, creating cost savings, adding operational efficiency, managing risks, and unlocking business growth. Reach out to a team member today to schedule your free consultation and learn more about the power of an outsourced accountant or finance professional.
