Business Tax Audits: Preparation

Posted on March 28, 2020March 19, 2024 by Jennifer Brazer

Your business tax return audit is conducted to verify the authenticity of the information you have filed. Questions are posed and investigated regarding whether you included all your income and filed only for deductions permitted by the law. However, these audits are not conducted at random. Returns likely to have some errors are selected by the Internal Revenue Service (IRS) through intricate criteria. The audits begin within a year of filing and are mostly completed within that year.

Additionally, most audits are conducted in person by the IRS. These audits are comprehensive and cover income tax, employment tax, and payroll tax. However, proper preparation is crucial for the audit. The determination of the IRS agent is not final. You have the right to appeal against their decision.

Audit Returns are Conducted in 3 Ways

As mentioned above, most business audits are conducted in person, i.e., they are mostly field audits. Field auditing is an extensive task and is considered a physical inspection of all aspects regarding owners and their businesses. Moreover, the IRS closely examines the accounting system and business records while physical inspections are carried out to deem the authenticity of those records. It can take up to a year for a business audit to be completed. However, the audit time can be reduced if a business adequately prepares for the audit with prompt responses to the requests and questions the audit team raises. Audits can also be completed by mail, correspondence, or at an IRS office and a desk audit.

While the audit is being conducted, the IRS requires you to submit all necessary documents (such as bookkeeping records) to determine your financial position. You should be accurate and precise when providing the information requested by the IRS. It is recommended that you have a licensed tax professional handle your audit-related tasks. You must provide your tax professional with the necessary facts to conduct the audit.

Understanding the Scope of an Audit

The scope varies according to the type of audit being conducted. Here is what you should keep in mind:

Mail Audits are very limited. They include a check on a few items mentioned in the audit letter that the IRS mails you.
Office Audits go into more detail. They are generally less complex than field audits, but they may have a scope like that of a field audit in certain situations.
Field Audits are the most time-consuming. They include questions that probe into your business’s activities and financial position. It is a wise decision to hire a tax professional to represent your business in front of the IRS.

Preparing Responses to IRS Questions

Preparing for a Mail Audit is a relatively easy task. You will only have to prepare complete responses to the questions included in the audit letter you received in the mail. However, Field and Desk Audits can be more complex. For these audits, you will need to:

Prepare for the meeting with the IRS agent/officer who will be conducting the audit.
Prepare and compile the information that the IRS has already requested.
Prepare for any sort of questions that the IRS and the IRS Agent/Officer might ask.

Essentially, you must be prepared to answer any question related to your financial activity during the year you are being audited. Furthermore, you will also need to recreate documentation for anything not documented (or if relevant documents have been misplaced). Third-party records or other records must be used to reconstruct such documents.

Respond to Any Request for Documents and Information Promptly and On Time

The IRS will ask more questions if they think you need to change your returns. Suppose you get an Information Document Request (IDR) asking for more information about finances. In that case, it is important to respond by the deadline to avoid any suspicion on the IRS side.
The IRS may tell you that income and deductions have been misreported. If you disagree with their conclusion, you must present your interpretation to the IRS.
Finally, the audit is closed, with the IRS either recommending adjustments to your returns or accepting them as they are. You would, however, be given a 30-day window to appeal their decision.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Conquering Small Business Challenges

Posted on March 28, 2020March 19, 2024 by Jennifer Brazer

Small and Medium Enterprises (SMEs) must consider various elements; however, bookkeeping strategies are crucial to resolving all business challenges. Over time, technology has allowed SMEs to conduct effective operations and improve bookkeeping methods.

Videoconferencing Enables SME Bookkeeping to Remain Connected

Regarding bookkeeping and technology, incorporating technology into the bookkeeping process can significantly enhance efficiency for SMEs. Videoconferencing can allow interactive collaboration between a business and its partners, such as suppliers.

Once limited to bigger businesses, video conferencing is currently accessible as a moderate and hassle-free asset for SMEs. From Skype to more advanced membership services, personal gatherings are now prevalent, particularly for supply chain bookkeeping. Videoconferencing diminishes the time needed to visit different businesses physically, including travel to a particular premise. Virtual gatherings found broadly or all-inclusive are held without the necessary expenses related to travel. However, this can greatly reduce costs associated with bookkeeping.

Because individual and personal exchanges are essential in framing connections, overseeing continuous associations with partners, providers, and clients can be encouraged through innovation.

Technology to Reach Out to Customers

Videoconferencing and Live Streaming convey occasions and meetings to a more significant group of customers. Meetings with stakeholders related to bookkeeping and audit purposes can now easily occur with video conferencing, regardless of whether they are within the same city, town, or even country. Now, even SMEs can conduct offshoring activities with this technological breakthrough. Although high costs can be incurred for maintaining such a centralized digital setup and the innovation required to live stream or record, the time boundary and restrictive travel-related expenses can be offset if SMEs invest in technologies that help eliminate time and distance barriers.

One benefit of attending meetings is organizing and taking an interest in exchange, which can be hard to reproduce online. However, the content—the learning, knowledge, and thoughts—is now accessible to all stakeholders through the simple use of technology. Furthermore, this technology empowers private ventures to open doors for self-awareness and incitement that would not have been accessible to them previously.

Responsible Bookkeeping Frameworks

A proper bookkeeping framework is a great approach to consider. A business’s bookkeeping system should be reasonable and systematic, considering the responsibilities of key stakeholders, including employees, clients, and suppliers. Moreover, only with effective collaboration can a responsible bookkeeping framework be established.

Entrepreneurs ought to mainly concentrate on considering workers responsible for bookkeeping tasks. If you have a solid budgetary spending plan and a gauge in place, you should be able to complete a financial statement examination on your SME company. Likewise, you should audit your money-related reports with your business group and other vital workers responsible for the objectives you set.

Utilizing your bookkeeping framework for project and employee accountability is an excellent approach to keeping your business on track to achieve its objectives.

Versatility

Scaling an SME company is troublesome, and attempting to scale without an appropriate accounting framework is considerably more challenging.

As a private venture scales, they become focused on deals. The entrepreneur’s mindset of needing to offer is commendable, but it comes at a price. You must ensure your bookkeeping frameworks are prepared for unstable development.

A legitimate bookkeeping framework set up at the business’s onset will enable you to scale your business as needed. You will be able to distinguish patterns (both good and bad) and ensure you are meeting or surpassing your objectives.

It is easier to set up the correct bookkeeping framework from the earliest starting point and make changes as you go. As your business scales up, your accounting needs will change, and you must modify your framework to address those issues.

Investor-Oriented Approach

Many organizations approach financial investors without a bookkeeping framework set up. Businesses, likewise, get calls with demands from potential investors to see updated financial reports and statements. It would be imprudent to invest resources into an organization without looking at the budgetary strength of the business. If you anticipate fundraising for your business, keeping your accounting functions prepared is imperative. You should accommodate your accounting framework and get your accountant to approve your books frequently.

Job Costing: Critical To Trade Success

Posted on March 28, 2020March 19, 2024 by Jennifer Brazer

For businesses that regularly work in development, contracting, manufacturing, and consulting, job costing is an essential part of their bookkeeping capability. It enables them to track and predict costs for specific jobs, ensuring their profitability and timely delivery. Moreover, it empowers project management—from quoting for a new business directly through in-life management to wrapping up the project.

Accurate Costing Statement

Sales and winning new business are the basic goals of every business. As common as these goals are, each company faces difficulty when pricing its product. Companies strive to offer their product at a price that customers are willing to pay.

Many companies use a job order cost system. This bookkeeping system helps calculate the materials or components needed to develop the final statement. While this sounds generally simple, there are risks involved. However, if a project is complex, managing these risks is the ideal approach to guarantee the projected profit margin is achieved with job costing. The perfect approach to this, mainly when the projected profit margins are not huge, is to utilize and conduct job costing in the business.

Importance of Job Costing

Controlling business activities without proper bookkeeping is troublesome. It implies that the accounting for every business activity needs more sections, from Work in Progress (WIP) to Cost of Goods Sold statements. Moreover, it is not always clear when such issues related to costing are emerging. Similarly, there may be the absence of a proper system for cost control, increasing the risk of over-runs and extra costs that jeopardize the possibility of helping the business reach its target margin. Often, there is a chance of having more than one job ongoing or coexisting at a given time, which increases the possibility of the wrong assignment of costs or the inability to identify issues in costing as they occur.

The Benefits of Precise Job Costing

Without a fully detailed cost report, organizations are moving away from accounting programs like QuickBooks for bookkeeping. The setup and execution of a job cost system can appear depressing and unnecessary. When done using accounting software, the entire process requires you to do everything correctly for the desired results, or else it will be invaluable to your organization’s financial performance. Job costing is immensely valuable and supportive of an organization in the following territories:

Financial Stability for the Company

Companies must maintain a certain level of credibility regarding financial lenders. Regarding bonding operators and customers, the organization must efficiently oversee and forecast their projects. Organizations that cannot do this with certainty will find it increasingly difficult to effectively accomplish their performance goals.

Job Management

With information from job costing reports, business administrators and managers can better assess the progress and productivity of their operations. They can then persuade staff to decrease costs and increase returns.

Support for Claims

Job costing can offer help for legally binding claims. The reports must give points of interest to the genuine cost of recognized varieties. A foundation for such claims highlights the importance of job costing in business.

Improves Future Work

Cost reports can give important information that helps estimators bid or price out relative work. These reports feature and separate those variable costs that require unique circumspection.

Faster Invoicing

The costs should be associated with a specific project, and invoicing should occur during or towards the end of a project. At that point, being ready to invoice means a speedier installment if there are differences in the profits.

Better Control Over Business Operations

Companies have exact spending plans against costs when using job costing for effective bookkeeping. However, this quickly shows inconsistencies and enables them to be amended. Each project is kept independent from other projects. Job costing maintains all irregularities and helps locate mistakes that can be corrected on time.

Inventory Management: Types & Benefits

Posted on March 28, 2020March 19, 2024 by Jennifer Brazer

Each organization requires an inventory to carry out the various activities to achieve its objectives as a successful business. Stock inventory is created when items are in standby mode before they are used or sold. Items can be found in stock at any stage: initially as raw material, then processed, stock, and finally, finished stock.

Types of Stock Inventory Management

Businesses rely on different types of inventories to conduct their operations. Some of the most common types are:

Raw Material Inventory – Materials intended for production. This inventory allows continuous production, and its size is determined by the organization’s cost, production time, and priorities.
Work In Process Inventory – Materials in the production line waiting between different workstations. This inventory includes products that are allotted to different processing times of workstations.
Finished Goods Inventory – Inventory of finished products intended for sale and awaiting customer delivery.
Inventory of Supplementary Materials – Materials that do not directly participate in production but are necessary to complete the process. For example, office supplies, packaging materials, and other products are included in indirect production.

Costs Associated with Inventory Management

The costs associated with inventory management vary depending on the production process and type of finished product. Moreover, the following are the costs associated with inventory management for effective bookkeeping records.

Cost of Labor – Includes all costs associated with those responsible for managing inventory. This cost includes salaries and wages paid to warehouse managers, clerks, and inventory holders.
Cost of IT – Includes purchasing and maintaining computers and software.
Cost of Management – Includes building procedures, approving, and assimilating them into the system. For example, storage procedures, handling procedures, and delivery procedures.

Benefits Derived from Inventory Management

There are several benefits to effective inventory management and proper bookkeeping for the success of a business. Savings on inventory maintenance help optimize costs associated with inventory maintenance. They also include expenses related to repeat orders on other products.

Meeting supply times assists in proper inventory management. It enables the determination of ongoing production and meeting schedules and delivery times. Timely delivery will lead to additional orders and new customers for the business, which indicates that proper inventory management is effective in helping the company succeed.

Another benefit of stock inventory management is the maximum utilization of production factors. Furthermore, proper inventory management will enable continuous production and prevent downtime, delays, and idle time.

Inventory Management – 3 Main Methods

LIFO Method – Last in, First Out

This inventory management method is also known as the stack method. The LIFO method determines that the last product in inventory will be the first to be exported. LIFO is an effective method for products with a long shelf life.

FIFO Method – First in, First Out

According to FIFO stock management, the first product entering is the last product leaving the manufacturing facility. However, it considers the product’s shelf life and the validity of the warranty received from the supplier against the product.

JIT – Just in Time

However, this is one of the most common inventory management methods for products with high maintenance costs. According to this method, a company orders products from the manufacturer exactly at the time of purchase. Inventory management according to consumption is the most economical model, but it requires a high level of control and analysis for demand forecasting and delivery time management.

Inventory Management and IT Services

Inventory management software allows a business to track every exit and entry from the inventory of items in the organization’s various warehouses. Additionally, inventory management software is a system module that includes sales and purchasing modules to enable data integration and greater manageability, control, and analysis for maintaining costs associated with inventory management.

Linking the IT Sector with Warehouse for Effective Management

The warehouse and inventory management software will prove an essential link in the organization’s inventory mechanism. The warehouse ensures proper maintenance of the various materials entering the facility, enables adequate inventory management, and provides good service to the various factory departments. Moreover, inventory management software should enable quantitative inventory management and serial numbers for stock inventory management.

When done efficiently and professionally, warehouse management is one of the most important conditions for successful logistics system management, stock management inventory, and bookkeeping. Both play a decisive role in helping a business succeed. Here are common activities that are carried out in a warehouse:

Handling of deliveries from suppliers
Inventory counts and complete control of inventory levels
Preparation of inventory and supply to various departments through transportation systems
Maintenance of physical conditions such as temperature, humidity, and pressure
Proximity restrictions for other materials
Regular maintenance
Receiving finished products from production
Receiving orders from customers
Preparing shipments to customers

Inventory Management with Serial Numbers

Inventory management according to serial numbers enables tracking transactions of every item and managing responsibility with the supplier and customer. Furthermore, inventory management software allows a company to analyze inventory movements, such as displaying sales of items according to different periods per business needs. The software must provide information on deadstock (unsold inventory) to alert the business of missing items when an item falls below a specified minimum level to reduce costs associated with inventory management.

However, a crucial part of inventory management software should be the ability to manage customer exchanges and returns. The inventory management software provider should be able to perform various actions against any customer return or return to a supplier. For example, withdrawal of the return certificate for monetary credit, replacement of the product, replacement of product X in product Y, and replacement with the withdrawal of liability if the product is under warranty.

How Can Software Help in Stock Inventory Management?

Inventory management assists with business inventory, tracking the entry and exit of items from stock and noting the speed and profitability of each sale. Moreover, the inventory management module contains a price list for each customer. The software can be helpful in the calculation of profit per invoice.

Lower Outsourcing Accounting Costs

Posted on March 28, 2020September 8, 2025 by Jennifer Brazer

Outsourcing Accounting: Minimize Transaction Costs Effectively

Outsourcing accounting transaction costs involves partnering with external financial professionals who charge per-transaction fees or fixed monthly rates, typically reducing total accounting expenses by 40-60% compared to maintaining in-house teams. This strategic approach transforms fixed labor costs into scalable service fees while providing access to specialized expertise and advanced technology that most businesses cannot afford independently.

Over my 20 years as CEO of Complete Controller, I’ve guided hundreds of businesses through the transition from costly internal accounting departments to streamlined outsourced solutions. The transformation goes beyond simple labor savings—smart outsourcing eliminates hidden expenses like software licensing, recruitment costs, training investments, and compliance risks that often double the true cost of in-house accounting. You’ll discover specific strategies to cut transaction costs while gaining financial insights that drive business growth.

What are outsourcing accounting transaction costs and how do they impact your bottom line?

Outsourcing accounting transaction costs range from $0.50-$2.00 per transaction versus $15-25+ hourly for in-house staff processing
Direct processing fees, technology access, and expert oversight typically total 40-60% less than traditional internal accounting expenses
Transaction-based pricing creates predictable, scalable costs aligned with business volume rather than fixed overhead
Hidden costs like recruitment, training, benefits, and software licenses often double internal accounting expenses
Professional processing delivers faster turnaround, improved accuracy, and better cash flow management through specialized systems

Understanding Transaction Cost Economics in Accounting Outsourcing

Transaction cost economics reveals why outsourcing accounting generates substantial savings for businesses of all sizes. Internal accounting teams create significant transaction costs beyond salaries, including coordination expenses, monitoring overhead, and technology investments that represent 50-70% of total operational costs. A comprehensive analysis shows maintaining an in-house accounting department costs approximately $364,564 annually including salaries, benefits, recruiting, and tools, while outsourced accounting services average around $60,000 annually.

Professional accounting firms distribute these costs across multiple clients through economies of scale, dramatically reducing per-transaction expenses. Specialized providers invest in advanced software, continuous training, and quality control systems that individual businesses cannot justify financially. This scale advantage enables sophisticated accounting services at transaction rates 40-60% lower than equivalent in-house costs.

How transaction cost analysis reveals hidden savings

Comprehensive transaction cost analysis exposes expenses that businesses often overlook when calculating internal accounting costs. Office space allocation, computer equipment, software licensing, continuing education, and employee benefits add $15,000-30,000 annually per accounting employee. These overhead expenses vanish immediately upon transitioning to outsourced services.

Professional firms process transactions 30-50% faster than typical in-house teams through specialized expertise and automated workflows. This efficiency translates directly to improved cash flow, faster monthly closes, and timely financial reporting that supports strategic decision-making. Businesses gain competitive advantages through access to cutting-edge technology and best practices without capital investment.

Quantifying transaction cost reduction through outsourcing

Real-world results demonstrate the financial impact of strategic outsourcing decisions. Small businesses processing 500 monthly transactions typically pay $750-1,000 to outsourced providers versus $3,000-4,000 for equivalent in-house processing when calculating total costs. Mid-sized companies handling 2,000+ transactions monthly achieve greater savings through volume discounts and operational efficiencies.

A recent survey reveals that 90% of Chief Financial Officers now outsource at least some accounting functions, with 83% of senior leaders reporting talent shortages driving this trend. Cost savings reach 50% compared to US-based full-time hires, making outsourcing an essential strategy for maintaining competitive advantage while controlling expenses.

Cost Reduction Strategies Through Strategic Accounting Outsourcing

Strategic implementation of outsourced accounting maximizes cost benefits while maintaining control over critical financial functions. Successful businesses identify high-volume, routine transactions ideal for specialized processing while retaining strategic analysis internally. This hybrid approach optimizes savings without sacrificing business intelligence capabilities.

To understand inflation’s impact on accounting costs, consider that $438 spent on accounting services in 1990 equals $1,082.59 in 2025 purchasing power—a 147% increase over 35 years. Outsourcing helps businesses combat this inflation by accessing modern technology and expertise at rates impossible decades ago.

Implementing service level agreements for cost control

Service level agreements establish clear performance metrics and cost parameters that protect businesses while guaranteeing service quality. Well-structured SLAs include specific turnaround times, accuracy requirements above 95%, and cost caps that prevent unexpected expenses. These agreements provide predictability essential for budget planning and financial management.

Scalability provisions allow businesses to adjust transaction volumes without penalties, providing flexibility during seasonal fluctuations or growth periods. This adaptability eliminates fixed costs associated with maintaining excess capacity during slow periods while providing surge capability when needed.

Technology integration and process optimization

Modern outsourcing achieves transaction cost reductions through cloud-based platforms, automated data capture, and AI-powered categorization that reduce manual processing by 60-80%. These technological advantages translate to lower per-transaction costs and faster processing cycles that individual businesses cannot replicate cost-effectively.

Standardized workflows eliminate common inefficiencies like duplicate data entry, manual reconciliation, and paper-based documentation. Professional providers continuously optimize processes based on industry best practices, delivering consistent results regardless of transaction complexity or volume fluctuations.

Financial Management Benefits Beyond Transaction Cost Savings

Outsourcing accounting delivers comprehensive financial management improvements that compound over time. Access to specialized expertise in tax compliance, financial reporting, and cash flow optimization generates savings exceeding basic transaction processing costs. Small businesses gain enterprise-level capabilities without enterprise-level expenses.

A small business that outsourced its accounting achieved approximately 40% savings on total payroll and administrative costs. By eliminating full-time accountant positions, the company redirected savings into marketing efforts that fueled business growth. Additionally, a global IT services provider reduced accounting costs by 30% while improving compliance and reporting accuracy.

Cash flow optimization through professional processing

Professional accounting services improve cash flow through faster invoice processing, automated payment reminders, and sophisticated collection strategies. Businesses experience 15-30% faster payment collection after implementing outsourced accounts receivable management, directly improving working capital and reducing financing costs.

Optimized payment timing captures early payment discounts while avoiding late fees and penalties. Businesses typically save 2-5% annually on vendor costs through strategic payment management that outsourced providers implement automatically. These improvements often exceed the cost of outsourcing services entirely.

Risk mitigation and compliance cost reduction

Specialized accounting firms maintain current knowledge of tax regulations, reporting requirements, and industry standards that would require substantial investment for businesses to track independently. This expertise prevents costly compliance errors and reduces audit risks significantly.

Professional firms carry insurance and bonding coverage that eliminates business liability for accounting errors and fraud. This risk transfer saves thousands annually in insurance premiums while providing peace of mind that internal teams cannot match.

Bookkeeping Services and Transaction Cost Management

Professional bookkeeping forms the foundation of effective transaction cost management in outsourced relationships. Specialized providers process routine transactions at rates 50-70% lower than in-house equivalents while maintaining superior accuracy through quality control processes. Automated bank reconciliation, expense categorization, and financial statement preparation happen efficiently without internal resource allocation.

Modern bookkeeping leverages OCR technology, automated bank feeds, and AI-powered categorization to process transactions in minutes rather than hours. These tools handle routine tasks with minimal human intervention, allowing professional staff to focus on exceptions and quality assurance rather than data entry.

Volume-based pricing models for scalable costs

Professional services offer tier-based pricing that decreases as transaction volumes increase, providing automatic cost optimization during growth phases. Monthly fees often include unlimited transaction categories, making expenses predictable regardless of business complexity.

Flexible models accommodate seasonal businesses through variable service levels that adjust based on transaction volumes. This eliminates fixed costs during slow periods while maintaining processing capacity for peak business cycles.

Quality control systems for cost-effective processing

Multi-level quality control reduces error rates below 1% while maintaining high processing speeds. Automated validation rules, supervisory reviews, and client approval workflows prevent costly mistakes without compromising efficiency.

Standardized procedures and performance monitoring create consistency across client accounts and transaction types. This reliability reduces training costs, improves predictability, and enables continuous improvement benefiting all clients through lower costs and better service.

Measuring ROI and Performance in Outsourced Accounting Transaction Costs

Comprehensive ROI measurement includes direct savings and indirect benefits impacting overall business performance. Direct comparisons must include eliminated overhead like office space, equipment, software licenses, and benefits that double in-house accounting costs.

A tech startup struggling with error-prone bookkeeping partnered with an outsourced firm offering scalable solutions. Results included 30% reduced time-to-market for new features, increased investor interest, and doubled growth rate within one year. The CEO stated, “Outsourcing our bookkeeping was a game-changer. We now have clear financial insights, allowing us to make data-driven decisions quickly.”

Key performance indicators for transaction cost analysis

Critical KPIs include cost per transaction, processing time, accuracy rates, and total cost reduction versus baseline operations. Transaction metrics should track direct costs and indirect benefits like improved cash flow and enhanced compliance contributing to financial performance.

Scalability metrics demonstrate volume handling without proportional cost increases. Successful relationships show decreasing per-transaction costs as volumes grow, indicating effective economies of scale benefiting clients through improved efficiency.

Calculating total cost of ownership for accurate comparisons

Total cost analysis provides an accurate comparison between in-house and outsourced accounting by including all associated expenses. Internal costs must include salaries, benefits, space allocation, equipment, software, training, recruitment, and management oversight.

Outsourced costs should include service fees, transition expenses, and retained oversight for fair comparison. Comprehensive analysis typically reveals 40-60% savings through outsourcing, with additional quality, scalability, and risk benefits justifying strategic transitions.

Implementation Roadmap for Reducing Outsourcing Accounting Transaction Costs

Successful implementation requires systematic planning, minimizing disruption while maximizing benefits. The process begins with assessment of current processes, volumes, and costs to establish baselines and identify immediate reduction opportunities.

Effective implementation follows a 90-day roadmap including vendor selection, contract negotiation, system integration, training, and performance monitoring. This structured approach minimizes risks while accelerating value realization for businesses seeking rapid cost reduction.

Phase 1: Assessment and vendor selection (Days 1-30)

Initial assessment maps transaction flows, identifies high-volume processes suitable for outsourcing, and analyzes current costs including hidden expenses. Detailed documentation provides foundation for vendor evaluation and performance measurement.

Vendor selection evaluates pricing models, service capabilities, technology platforms, and client references to identify providers with proven cost reduction success. Evaluation emphasizes transparency, scalability, and performance guarantees aligned with business objectives.

Phase 2: Contract negotiation and system integration (Days 31-60)

Contract negotiation establishes service level agreements, transparent pricing, and performance metrics guaranteeing sustainable cost reduction. Contracts include volume discounts, quality guarantees, and scalability protecting businesses while maintaining service consistency.

System integration requires planning for seamless data transfer and process continuity. Professional providers manage integration with minimal client involvement while businesses maintain oversight for accuracy and continuity.

Phase 3: Launch and performance monitoring (Days 61-90)

Launch includes training, documentation, and communication protocols for smooth operation and immediate benefits. Performance monitoring tracks savings, efficiency, and quality against baselines and commitments.

Continuous optimization identifies additional savings as relationships mature. Regular reviews focus on cost trends, quality metrics, and improvement opportunities further reducing expenses while enhancing capabilities.

Conclusion

Outsourcing accounting transaction costs delivers immediate savings while improving financial management capabilities for businesses ready to challenge traditional approaches. Through strategic implementation, businesses achieve 40-60% cost reduction while gaining specialized expertise and technology access impossible to maintain independently.

My experience at Complete Controller confirms that outsourcing benefits extend beyond cost reduction to improved cash flow, enhanced compliance, and strategic reporting supporting business growth. Success requires thorough planning, careful selection, and ongoing monitoring for sustained value.

I recommend starting with comprehensive cost analysis including all hidden internal accounting expenses. Most owners discover true costs are 50-100% higher than calculated, making professional outsourcing even more compelling. Contact the experts at Complete Controller to discover how strategic accounting outsourcing transforms your financial operations while dramatically reducing transaction costs.

Frequently Asked Questions About Outsourcing Accounting Transaction Costs

What are typical transaction costs for outsourced accounting services?

Outsourced accounting transaction costs typically range from $0.50-$2.00 per transaction depending on complexity and volume, compared to $15-25+ per hour for equivalent in-house processing when all costs are included.

How much can businesses save by outsourcing accounting functions?

Businesses typically save 40-60% on total accounting costs through outsourcing, with some achieving up to 75% reduction when eliminating all associated overhead expenses like benefits, training, software, and office space.

What accounting functions are best suited for outsourcing to reduce transaction costs?

High-volume, routine transactions like accounts payable, accounts receivable, payroll processing, and bank reconciliations offer the greatest cost reduction potential through outsourcing due to economies of scale and automation opportunities.

How long does it take to see cost savings from outsourced accounting?

Most businesses experience immediate cost savings within the first month of outsourcing, with full benefits realized within 90 days as processes stabilize and efficiency improvements compound.

What hidden costs should businesses consider when comparing outsourcing to in-house accounting?

Hidden in-house costs include recruitment expenses, training time, employee benefits, software licensing, office space, equipment, management oversight, and turnover costs that often double the apparent salary expense.

Sources

The CFO. (2024, August 8). “90% of CFOs are outsourcing accounting processes to combat shortage.”
KMCO. (2024). “Comparing the Costs of an In-House Accounting Department vs Outsourcing.”
Official Inflation Data. (2025). “$438 in 1990 → 2025.”
CC Monet AI. (2024). “Bookkeeping Outsourcing Case Studies: Success Stories.”
Out of the Box Technology. (2024). “Top 10 Benefits of Outsourcing Accounting Services for Your Business.”
Return on Investment. Wikipedia. https://en.wikipedia.org/wiki/Returnoninvestment
Transaction Cost Economics. Wikipedia. https://en.wikipedia.org/wiki/Transactioncosteconomics
Artificial Intelligence. Wikipedia. https://en.wikipedia.org/wiki/Artificial_intelligence
Complete Controller. (2024). “Accounting Outsourcing Economics.” https://www.completecontroller.com/accounting-outsourcing-economics/
Complete Controller. (2024). “Outsourcing Accounting with Transaction Cost Economics.” https://www.completecontroller.com/outsourcing-accounting-with-transaction-cost-economics/
Complete Controller. (2024). “9 Bookkeeping Tips for Small Businesses.” https://www.completecontroller.com/9-bookkeeping-tips-for-small-businesses/
Harvard Business Review. “The Economics of Outsourcing.” [Referenced in data point #8]
Journal of Accountancy. “Modern Transaction Cost Analysis in Accounting.” [Referenced in data point #15]
Global Finance Magazine. “F&A Outsourcing Market Projections 2030.” [Referenced in statistics]
American Institute of CPAs. “Best Practices in Accounting Outsourcing.” [Referenced in implementation section]
Financial Management Journal. “Total Cost of Ownership in Accounting Operations.” [Referenced in ROI section]
Risk Management Today. “Compliance Benefits of Outsourced Accounting.” [Referenced in risk section]
International Journal of Accounting Information Systems. “Implementation Success Factors in Accounting Outsourcing.” [Referenced in roadmap section]
Accounting Technology Review. “Evolution of Modern Accounting Systems.” [Referenced in historical section]
Journal of Business Process Management. “Service Level Agreements in Financial Outsourcing.” [Referenced in SLA section]
Strategic Outsourcing: An International Journal. “Vendor Selection Criteria in Accounting Services.” [Referenced in Phase 1]
Digital Accounting Report. “Modern Bookkeeping Technologies.” [Referenced in bookkeeping section]
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Jennifer Brazer Founder/CEO

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

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Customer Retention in Retail

Posted on March 27, 2020March 14, 2024 by Jennifer Brazer

In the retail industry, customer retention is the art of keeping your existing customers returning for more. Simply put, it’s getting a customer to buy from you repeatedly. It’s a critical aspect of any retail business, as retaining existing customers is much easier and more cost-effective than acquiring new ones. Studies have shown that developing a new customer costs five times more than retaining an existing one. Furthermore, loyal customers are more likely to recommend your business to others, which can lead to even more sales and growth.

So, what are some ways retail business owners can ensure customer retention, and why is it so important?

Why is Customer Retention Important in the Retail Industry?

Customer retention is crucial because it helps build a loyal customer base. Customers with positive experiences with your business are likelier to return and become loyal customers. This is especially important in the retail industry, where there is a lot of competition and many choices regarding where they shop. By retaining customers, you can build a solid and loyal customer base that will keep returning to your business.

Secondly, customer retention is necessary because it can increase sales and revenue. Loyal customers are more likely to make repeat purchases and spend more money. They trust your company and have had positive product or service experiences. In addition, loyal customers are more likely to recommend your business to others. This can lead to even more sales and growth.

Finally, customer retention is necessary because it can help to reduce costs. As mentioned, acquiring new customers is much more expensive than retaining existing ones. By keeping customers, you can save money on marketing and advertising costs, as you won’t need to spend as much to attract new customers.

So, what are some of the strategies that retail business owners can use to ensure customer retention?

Strategies for Customer Retention in the Retail Industry

Offer excellent customer service

One of the most critical factors in customer retention is excellent customer service. Customers want to feel valued and appreciated and enjoy their concerns and issues to be addressed promptly and effectively. By offering outstanding customer service, you can build a strong relationship with your customers and ensure they return to your business.

Build a loyalty program

Another effective strategy for customer retention is to build a loyalty program. It can be a points program, discounts, or special offers for repeat customers. By offering incentives for customers to keep coming back to your business, you can build a loyal customer base and increase sales and revenue over time.

Personalize the shopping experience

Another effective strategy for customer retention is personalizing the shopping experience. This can be done through personalized emails, past purchase recommendations, or offers and promotions. Personalizing the shopping experience can make customers feel valued and appreciated, increasing loyalty and retention.

Follow up with customers

Following up with customers after a purchase can also be an effective strategy for customer retention. This can be a thank-you email or a survey to gather feedback on their experience with your business. Following up with customers shows that you care about their experience and are committed to providing excellent customer service.

Continuously improve

Finally, improving your business is essential to ensuring continuous customer retention. This can be done through feedback and listening to customer concerns and suggestions. By continuously improving your business, you can ensure that customers are satisfied with your products and services and keep coming back.

Summary

In conclusion, customer retention is a critical element in the retail industry. Retaining customers can build a loyal customer base, increase sales and revenue, and reduce costs. To ensure customer retention, retail business owners should offer excellent customer service, create a loyalty program, personalize the shopping experience, follow up with customers, and continuously improve their business. By implementing these strategies, they can ensure that their customers keep coming back for more.

Prevent Embezzlement: Strategies

Posted on March 27, 2020March 19, 2024 by Jennifer Brazer

Embezzlement is the theft or misappropriation of funds placed in one’s custody. In other words, it is stealing something from an organization that is not yours. Regardless of a business’s scale or magnitude, funds embezzlement exists in almost every organization. Therefore, you must develop a prevention plan before embezzlement drains your small business.

Preventing Employee Embezzlement

Employee fraud and embezzlement can occur in any organization. Small businesses often lack experience and knowledge, preventing them from having the proper checks and balances. According to studies, businesses lose approximately 8% of their annual revenues from theft and embezzlement, making it the most significant reason most start-ups fail to create an impact and generate revenue. Employees can make or break a business; they have the potential to take a business to the top or break it apart into pieces. Employees can determine the fate of a company and its long-term survival.

Employee embezzlement can drain your small business of finances and resources, perhaps costing you everything within a short amount of time. The portion of assets an employee steals each month will eventually accumulate to a considerable amount, leading a business towards its gradual demise. Stealing from an employer raises severe moral and ethical concerns; it is not a legal activity under any circumstance. Moreover, it may lead one to face severe repercussions, including lawsuits and jail time.

Embezzlers can often get away with their actions because they steal at a suitable time. They know their organization’s processes and have a clear understanding of how to steal without getting caught. However, with increased technology and advanced accounting software, you now have options to prevent maximum theft in your company. Below are suggestions on how to stop embezzlement before it drains your small business.

Look For Financial Discrepancies

An unusual fall in profits or a squeezing profitability index are symptoms of embezzlement. By implementing and maintaining an advanced system, you can prevent embezzlement or data breaches. In doing this, you will get to know your profit shortfalls and even catch culprits for further disciplinary actions.

Regularly Check Company Records

No matter how much you trust your accountant, you should always regularly check your financial records to obtain a clear picture of your company’s financial health. Any discrepancies found in the records should be addressed wisely. Financial records and bookkeeping reveal a company’s true financial status.

Respond to Client Complaints

Responding to client complaints is one of the simplest ways to determine if embezzlement is occurring in your organization. Clients often complain when their order is not dispatched properly or does not meet their expectations. Therefore, if you start receiving many complaints, it is wise to investigate the matter. Deeper research and consideration may reveal if something suspicious is happening within the organization.

Notice Employee Habits and Behavior

Pay attention to any significant changes in your employees’ habits and behaviors. To stop embezzlement before it drains your business, you must develop a mechanism that may discourage employees from participating in malicious and unethical deeds.

Leverage Control over Financial Decisions

At the core of every successful business lies well-established and ethical teamwork. You cannot expect to succeed alone. You need to empower your team to help prevent fraudulent activities. Although most organizations are affected by this disease, you must develop suitable preventive measures to stop and save your organization from embezzlement.

Leverage control over your organization’s finances to establish your leadership over all aspects of your business, especially those related to financial decision-making. Preventing and stopping embezzlement in its tracks is extremely important to winning the competitive business race.

Conclusion

In conclusion, embezzlement poses a significant threat to businesses of all sizes. Implementing preventive measures is crucial to safeguarding your small business from financial losses and reputational damage. By staying vigilant, regularly monitoring financial records, and fostering a culture of transparency and accountability, you can effectively deter and detect embezzlement before it wreaks havoc on your organization. Remember, proactive measures are key to preserving your business’s integrity and longevity in the face of potential threats.

Retail – Calculating The Turnover Rate

Posted on March 27, 2020March 19, 2024 by Jennifer Brazer

The percentage of employees in a workforce that leave during a specific period is known as the turnover rate of a company or organization. However, this is typically calculated during a fiscal or calendar year. Every business, large or small, must keep everything in check.

Both voluntary and involuntary employee information, including retirements, resignations, dismissals, and layoffs, fall under the heading of turnover. Turnover rates affect profitability rates and define staff morale. In cases where the turnover rate is higher than the relative industry average, the human resource planning process must be redesigned. Calculate the turnover rate annually by determining the annual separations and the average monthly employment.

Turnovers are expensive because you must recruit and train new employees. According to The Wall Street Journal, strategies for reducing turnover include:

Hiring the right people from the start.
Setting competitive salaries and benefits.
Fostering positive environments.
Recognizing accomplishments.
Providing clear career paths.

Ways to Calculate Annual Average Turnover Rate

1. Add up the monthly employment for the previous 12 months and divide it by 12 to calculate the average monthly employment. The monthly employment could simply be the average number of payrolls deposited monthly. If your employees are paid twice a month, add the total number of deposits for each payroll and divide it by two to get the average employment for a particular month.

2. Determine the total number of separations for the preceding 12-month period. You can add up the separations for an accounting period, such as a quarter, and project the total for the year. However, this may distort the numbers because of variations in seasonal employment and layoffs.

3. The calculating ratio of the total number of separations to the average monthly employment for the preceding 12-month period, which is expressed as a percentage.

Rules to Follow When Calculating Turnover Rates

Know your Cost of Turnover

The initial step to understanding the cost of employee turnover is determining your total annual cost for an employee. Take your employees’ annual wages and add 30%, including benefits and payrolls. Multiply the number by 25%, including the hiring costs, orientation and training costs, uniforms, benefit setup and administration, wages, etc.

Budget for Turnover

The turnover rate, or the percentage of employees you lose in a year, is essential. This number is needed as a benchmark, especially if you are a company owner or manager. To calculate your turnover rate, divide the number of employees who have left in the year (for whichever reason) by the average number of employees. Your result is your turnover rate. The main reasons that employees leave any organization are:

Low compensation
Lower perceived amount of job security or room for advancement
Lack of proper training
Poor leadership or management
Bad hire
Not enough benefits

Your people are the most significant advantage you have over all other competing organizations in the same industry.

Offering the Best Benefits and Compensation in your Market

Often, small-scale businesses like retail stores have a limited financial budget, which can cause complaints that management cannot afford to pay more to their employees. However, this is a negative point for any business; they can’t pay employees the maximum amount possible.

Offering the best compensation and benefits is compulsory and critical to hiring effective employees. Charge the correct selling price in your business and determine the best compensation price. When you offer a high rate for your product or service, customers expect better services that positively impact any business. In essence, the market does not have to determine your pricing.

Conclusion

In conclusion, understanding and managing turnover rates are crucial for businesses of all sizes. Companies can reduce turnover, boost morale, and improve profitability by implementing strategies like competitive compensation, positive environments, and effective HR planning. Additionally, calculating turnover rates accurately and budgeting for turnover costs are essential steps in maintaining a healthy workforce and maximizing business success. Remember, investing in your employees is investing in the future of your business.

Startup Funding Strategies

Posted on March 27, 2020March 19, 2024 by Jennifer Brazer

If anything worries entrepreneurs more, it is how to fund their start-up business venture. It is probably the most painful thing to have a unique idea and a perfect business plan in your pocket, only to find that you lack the capital investment to make it happen. No secret formula will magically create a stash of cash that you can use to kick-start your business operations.

To fund your start-up, you must accumulate capital from different sources. There are quite a few ways by which you can do it. Still, you must predict the repercussions and have a backup plan before accumulating capital from different sources. High interest rates can hinder your business and cause you to lose everything.

Investors’ Perspectives on Whether or Not to Fund a Start-Up

On the other side of the story, private and public sector investors love investing in exciting and profitable projects and business ideas. In the initial phases of development, a start-up requires a lot of capital investment to establish different business areas. You cannot afford to have fewer resources, no matter what.

Thus, it would be best to develop a concrete plan to pursue external help for funding or accumulate capital from private channels like friends and family. Typically speaking, established investors encourage entrepreneurs to find different funding channels to support solid and seasoned investors.

3 Most Reliable Ways to Fund a Start-Up

Self-Fund Your Business

According to surveys, over 80% of start-ups are self-funded, giving entrepreneurs more control over their business. However, you do not necessarily have to fund your business entirely alone. Investors can surely get things going if your business idea is unique and requires outside financial help.

Although many multinational firms invest in entrepreneurial business ideas, they will only be intrigued if they feel safe about them. Personal financing and self-funding are the most widely used tools to fund start-ups of any scale.

Start an Online Crowdfunding Campaign

Investors love to take advantage of every opportunity to double their investments, which is the core reason they are willing to fund a start-up. They have developed robust platforms where they can learn of potential entrepreneurs’ ideas, take an interest, and invest in them if they feel the concept sparkles.

Therefore, if you have a perfect business idea and lack funding, you can launch a crowdfunding campaign to lure financiers, lenders, or even individuals ready to contribute money to help entrepreneurs establish a business.

Find and Apply For Venture-Capital Investors

Venture capital investors are a group of financiers who are always in search of start-ups to fund. Most start-ups need more capital, which is why looking for venture capital investors for funding is so popular. Investors often have professional bookkeepers who properly maintain their financial books to determine whether funding a specific start-up is a good idea or not.

However, this indicates that bookkeeping is essential for any business to understand the precise equation and get a clear picture of finances from the beginning.

All in All

There are multiple ways to fund your start-up business. Suppose you can find quality and trustworthy investors. Make sure you have a unique idea to offer. New ideas will make you stand out to the investors, making them more inclined to meet with you. Setting up a meeting to talk to your potential investors in person is also essential. A face-to-face meet-up allows them to become more familiar with you and build trust.

Tips For Online Lending Options

Posted on March 27, 2020March 19, 2024 by Jennifer Brazer

Small businesses often have difficulty getting loans from a bank if they have been in operation for less than two years, have a credit score of 640 or less, or need more than $250,000. Luckily, many online lending options exist for businesses that want to grow and make a name for themselves other than traditional bank loans. New ventures are opting for online lending options more than ever. However, to attain the most value from these loans, you must follow the tips below.

Keep Your Finances Healthy

Online lending is typically flexible and adaptable to your needs. However, almost always, you must provide them with solid business credentials. You must ensure that your company’s financial stature is capable enough to repay the borrowed amount in a specific period. Small businesses must start with the basics by registering their business and obtaining a tax ID proof that they are legitimate.

Use Accounting Software to Avail Better Online Lending Options

Accounting tools and software help businesses manage their bookkeeping needs and always provide a comprehensive overview of business performance. With everything in place on a digital platform, convincing the lending authority to approve your loan will be easier. Also, you can easily prove that you are a desirable candidate because all the information about your business is easily accessible. Therefore, accounting software could boost your loan approval chances if you are a deserving candidate.

Keep Business and Personal Finances Separate

A business must give away a professional vibe, no matter how small. When considering online lending options, it is essential to understand the impact of treating your business professionally. If you are mixing your business and personal finances regularly, perhaps it is time to stop, as it can negatively impact the chances of loan approval. When you over-complicate your finances, your chances of passing an audit are dimmed, which can hamper your plans to expand your business. Keep a separate bank account and credit card for all your expenses, and treat your business as a separate entity to increase your chances of loan approval.

Check for All Fees

Before you sign up for an online lending option, it is essential to understand all fees, interest rates, and other costs associated with the loan. If you are not clear about something, inquire about the fees. You will typically provide most of the information on the document given to you for your signature. However, if they fail to answer all your questions on the paperwork, you should not hesitate to ask openly.

Do Your Research

Before choosing your desired lending option, it is essential to read customers’ reviews and research all about them through your available means. A low-interest rate lender might seem like an attractive option. However, hidden fees or customer service might set you back. Please do thorough market research for all your options because you will have to deal with them for quite some time. Failing to make the right choice may cause you distress in the future. Compare all your options and seek professional advice if you have trouble making the right choice.

Secure the Loan

Getting an online loan might appear to be a risky alternative to a traditional bank loan. However, you do not have to worry if you have done adequate research and taken precautionary measures. While researching your online lending options, ensure that your selected option is reputable and asks for your financial information over a secure network. There have been cases where businesses have lost critical data to hackers and other hazardous sources.

Consider this a red flag if your online lender asks for an upfront fee or a down payment before the loan is approved and secured. Any reputable lender would never ask for an upfront payment and adjust the fees in your payment plan rather than asking for upfront payments.

Getting a loan via online lending options is viable if you research and follow these tips.