Whether you have an entire department devoted to your company’s finances or you are singlehandedly totaling up the revenue and expenses, you need a formal process. If you can’t accurately predict future expenses and departmental budgets within a small margin of error, Q3 and Q4 will be full of headaches. But your budgeting process isn’t the only thing that needs to be standardized. The types of operating expenses your company has matter, too. Outsourced services might be the right way for your company to organize finances.
Why should you outsource some of your operating expenses?
Expenses come in two categories: costs of goods sold and operating expenses. If it’s not tied to your inventory or service labor costs, then it belongs in the latter category. There are a lot of reasons to contract with third parties for administrative and support services. It can let you find immediately expertise. You can get services completed without investing in the costs of hiring. Third-party services are also often cheaper than employees altogether.
But outsourcing functions like IT doesn’t just bring in value and leave out expenses. It helps build consistency. Here are four reasons why that matters:
1.. You can track departmental expenses.
When you have a small company and everyone either is their own department or is juggling multiple hats, it can be difficult to tell where expenses belong. Some expenses can even feel like they belong in multiple categories depending on which department benefits the most and who ordered the purchase or subscription services. But outsourced expenditures are clearly categorizable. That means you can compare your monthly and annual costs against recommended amounts for your industry and business size.
2. Minimize unexpected expenses over time.
IT can be one of your most variable categories or one of your most predictable. If you want for emergency network problems to spring up, then spending can ramp up quickly. The same is true if you have to quickly replace in-house servers and corrupted electronics. Unplanned employee turnover and new hirings are too expensive of last-minute addition to meet your business goals.
But outsourcing your IT support gives you a predictable bill each month. Most companies will proactively monitor your network for peak usages, malware threats, and signs of problems. Not only does that prevent downtime costs and revenue loss, it costs you less for repairs and replacements. When you’re forecasting your technology budget, consistency is key. It can even lower your total IT budget in the long-term.
3. Rely on your systems even during busy seasons.
There are many times when sales have to take priority. Towards the end of the year, many companies are tempted to spend more time supporting sales and closing deals instead of monthly maintenance. This can hurt your sales and other operations behind the scenes: a network outage and slow response time can hamper even the most enthusiastic employees.
You can feel the effects of skipped maintenance in every department, especially since January will be full of financial audits causing just as much busyness. Once your IT is automated and handled by an outsourced service provider whose primary focus is always IT, things won’t slip through seasonal cracks.
4. Get a better handle on cash flow.
Sometimes your budget isn’t about annual projections and overall savings. It’s about cash flow. You need to have cash on hand to keep employees paid, keep the lights on, and to buy equipment for your core services. If one month has a lot of IT disasters or expenditures, that cash flow is put at risk. While outsourced IT won’t completely remove the need for new laptops and devices, it makes it more predictable. You can spread out updates throughout the year instead of responding to a preventable but unseen crisis.
Check out our IT services to see what is the right fit for your business’s budget.