Outsourced Accountant for Tech Companies
2022 and 2023 have been tough years for tech companies. Venture capital funding has dried up significantly, with analysts projecting 2023 will be the worst year for VC funding since 2015. Many startups have been forced to raise new capital at lower valuations than previous rounds, and many more have gone out of business entirely.
For founders, this tough fundraising climate has served as a wake-up call, and today, we see many tech companies taking a far greater focus on their accounting and finance functions. It’s an area that’s historically been underdeveloped in many tech companies, which have instead typically focused their resources on engineering, growth, and sales.
But as the landscape has shifted, many startups are pivoting to a more sustainable approach: one guided by responsible cash flow management, a focus on profitability, and operational excellence.
Needless to say, this pivot comes with challenges. There’s a significant shortage of accounting and finance professionals. Retaining the team you have is tough, but growing it might be even more challenging. The answer? Working with an outsourced accounting firm with significant experience serving technology companies.
In this guide, we share what the process of outsourcing your accounting to an outsourced accounting firm looks like. We’ll also explain why it’s important you work with a vendor experienced in working with technology and SaaS companies – like the team here at G-Squared Partners.
What Does an Outsourced Accountant for Tech Companies Do?
Provided you find the right partner, an outsourced accountant for tech companies can do as much or as little as you need. Outsourced accounting services, sometimes referred to as Client Accounting Services (CAS), have become extremely popular in recent years, offering businesses access to proven accounting processes and talent at a fraction of the cost of building out an internal team.
An outsourced accounting firm should work with you to create a bespoke package tailored to the accounting needs of your company. You can expect the services in this package to be organized around three clear tiers:
- Outsourced Bookkeeping: bookkeeping is the foundation of all accounting and finance. An outsourced bookkeeper categorizes transactions, reconciles accounts, manages accounts payable and receivable, and works on closing your books each month.
- Outsourced Accounting: your outsourced accounting team will manage tasks such as preparing financial reports, running payroll, and overseeing your bookkeeping process.
- Outsourced CFO: accounting and finance isn’t all about the monthly financial process: it’s also about long-term planning. An outsourced CFO assists with everything from cash flow projections to helping you prepare to raise a new round of debt or equity funding.
There are many outsourced accounting providers out there – but it’s vital that you find one with deep expertise advising tech companies.
Tech companies are unique: they often have venture or private equity backing, invest aggressively in growth, and may have recurring revenue models. All of that demands a specialized approach to accounting and finance centered on a clear understanding of these nuances.
The Benefits of Outsourcing Accounting in Your Tech Company
Some functions of your tech company are too important to be outsourced: engineering, sales, marketing. Others, including accounting and bookkeeping, are ripe to be outsourced. As a tech company, your core competency isn’t GAAP compliance: it’s creating innovative new products and services that improve your users’ lives.
By partnering with an outsourced accounting firm, you’ll ensure that all of your accounting and bookkeeping needs are met, freeing up more of your bandwidth (and budget) to focus on growth initiatives that move the needle for your company. Recruiting, training, and providing resources for an in-house team is an expensive undertaking, especially when the alternative is hiring an outsourced team with all of the systems and processes to hit the ground running from day one.
The benefits of outsourcing your accounting processes aren’t purely financial though: outsourced accountants also bring a level of expertise that may be missing in your business today. This expertise results in a new level of financial insight that helps founders make important decisions with a higher degree of confidence. Whether it’s helping to build cash flow projections or the creation of a real-time dashboard that monitors important financial KPIs, an outsourced accounting team can arm you with the insights you need to become a more effective leader.
As your business grows, its accounting and finance needs will change. Outsourced accounting teams bring the flexibility and capacity required to hire that scale: whether it’s gradual, linear growth, or an urgent project that requires an agile response. Along the way, an outsourced accounting firm with experience in the tech sector can help facilitate your growth in all kinds of ways: from making introductions to investors and potential partners to providing benchmarking information that helps you understand your company’s performance.
G-Squared Partners: Experienced Accounting Advisors to Growing Tech Companies
Regardless of your tech company’s maturity, it’s likely that working with an outsourced accounting firm well-versed in the nuances of the tech sector will significantly improve your financial performance.
At an early stage, it’s normal for startups to survive using a bare-bones approach to accounting. But as your company grows and raises funds, investors will likely require your company to become GAAP-compliant: a step that may require a complete overhaul of your current accounting practices. The creation of a robust accounting and finance infrastructure not only makes your business more sustainable, it also improves your ability as a founder to plan for what’s next.
If you’re in the market for an outsourced accounting team for your tech company, reach out to our team at G-Squared Partners. We bring a wealth of experience working with tech and SaaS companies. From routine bookkeeping to preparing your company for a sale, our professionals have significant expertise at the intersection of accounting and technology, providing a full range of outsourced accounting solutions tailored to the needs of every client.
To learn more about G-Squared Partners’ outsourced accounting services for tech companies, contact us today.