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Thursday 26 May 2022
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3 Tasks Small Business Should Consider Outsourcing

3 Tasks Small Business Should Consider Outsourcing

Running a business amounts to a gargantuan task. Above and beyond providing customers with products or services, business owners also have to attend to the nuts and bolts of running a company. There are all sorts of back-office tasks that have nothing to do with customer service. Those are the tasks that tend to cause small businesses to get bogged down.

Back-office tasks are problematic for the simple fact that small business owners are not experts in everything. Companies are very good at whatever it is they specialize in. Those back-office tasks are just things that have to be done to keep the business running.

One way to keep from getting bogged down to outsource the back office. Over the last several decades, outsourcing has grown from a niche industry to a major one. All sorts of business tasks can now be outsourced to capable partners. With that said, here are three such tasks small businesses should consider outsourcing:

1. Payroll

The first back-office task that is better outsourced is payroll. This may come as no surprise to you. After all, the majority of America’s small businesses outsource full or partial payroll service. Still, there are those who prefer to keep payroll in house. That’s not necessarily a bad thing, but payroll can be more hassle than it’s worth.

Payroll is governed by an extensive list of rules and regulations. There are both federal and state rules. Depending on where your company is located, there might also be county and city rules to contend with. And of course, there are also taxes. Everything has to be handled in a way that is both compliant and mathematically accurate. You do not want to underpay employees or have compliance issues.

2. Accounting

Next up is accounting. Note that accounting and bookkeeping are two different things. A lot of small businesses, especially new ones, confuse the two. Bookkeeping is little more than managing the day-to-day finances. Accounting encapsulates the company’s entire financial picture, including taxes and reporting.

Accounting is like payroll in the sense that compliance can be complicated. The minutiae of federal and state law can make it difficult for even the most experienced accountant to always get it right. Just for compliance reasons alone, it is a good idea to outsource accounting. Either that, or a company should hire a licensed accountant with the education and experience to do things right.

3. Debt Collection

Finally, small businesses should consider outsourcing debt collection. This applies to both general debt collection and judgment collection. What is the difference? Salt Lake City’s Judgment Collectors says that judgments are a specific kind of debt that results from civil litigation. You take a client to court, you win, and the court enters a judgment in your favor.

General debt collection is more or less everything else. Interestingly enough, small businesses may attempt general debt collection on their own. When that fails, they take debtors to court in hopes of securing judgments against them. What they do not understand is that a judgment does not guarantee payment. You still have to pursue collection. Outsourcing debt collection to a third-party increases the chances of collecting in general so that civil litigation and judgments are not necessary.

Every small business has back-office tasks that have to be done. There is no way to avoid them. The question is this: who will handle those tasks? In a world where businesses are increasingly more specialized, it might make sense to outsource those office tasks to a company that focuses exclusively on them. That way, you have specialists handling highly specialized tasks.