If your business were a concert, the client-facing functions would be the rock stars.
Things like product design, sales and client relations belong on stage, commanding everyone’s attention as they perform under the lights.
The back-end office work — things like accounting, finance and human resources — are more like the crew. Not as exciting, but definitely essential.
Although we’re technically in charge of making the whole show a success, the stars get pretty demanding. The crew, on the other hand, can be easy to ignore — until there’s a major mishap.
Thankfully, there are lots of ways you can make sure these back-office functions get the attention they deserve (and they deserve lots) without giving every ounce of it to them yourself.
Outsourcing and automating your back office can free up your time to focus on your core competencies (a.k.a. the things people pay you for), serve your clients, and grow your business. It can even save you money.
Back-office tasks are often great candidates for outsourcing because they require specific skills or knowledge that owners don’t have, and they often include tasks that must be performed routinely.
Highly repetitive, detailed tasks are usually the perfect candidates for a software solution. However, outsourcing doesn’t have to involve software — you can also work with another specialized company or agency, a solo professional contractor, or some combination of the three.
Check out some of the key backend areas other small business owners are choosing to outsource. Then, decide whether you’re ready to take a similar path.
The term “Human Resources” can apply to lots of business functions related to your staff.
Many HR tasks are perfectly suited for outsourcing because they’re rife with paperwork and forms — just the kind of thing that software can cut back on dramatically.
However, perhaps more importantly, getting a specialist involved is important when you’re trying to comply with federal and state regulations.
Unless you avidly follow the legislature for changes to tax code and employment law, you need to work with a dedicated program or professional whose job is to stay up on them.
Examples of Outsourceable Areas in HR
Here are a few examples of HR tasks you may choose take off your own plate:
- Hiring – job offers, trial periods, probationary periods, background checks, employee records
- Onboarding – making sure new staffers sign off on the company handbook and policies, fill out their tax paperwork, enroll in their benefits, sign noncompete agreements, etc.
- Benefits – tracking employees’ vacation time and sick time, making sure employees get their health insurance, 401K, etc.
- Compliance – making sure you’re in line with the law when it comes to things like overtime pay, equitable pay, minimum wage and workers compensation.
- Employee Performance and Compensation – keeping track of reviews, raises and disciplinary records
- Engagement Assessment – taking the temperature of morale and feelings about the company
When You Should Outsource HR
When you only have a handful of employees, it’s tempting to try to take on HR yourself.
However, hiring for the first time means getting hit with a bunch of new legal regulations. Your learning curve will be the steepest when you’ve just started hiring, so it’s actually the best time to get professional help.
An HR software program or part-time contractor may be able to get the job done without the additional costs associated with hiring a full-timer.
That said, a full-time HR professional can be helpful for big companies, even those professionals are using a good HR software to crunch numbers and automate paperwork. As Human Workplace founder Liz Ryan explains:
Good HR people […] may process vacation-time requests as part of their jobs, but their real value is in knowing where the good-and-bad-energy currents are flowing in your organization, and using that knowledge (and other skills, like sensitivity and emotional intelligence) to steer around the landmines that come with the territory whenever you work with people.
When you’re on a small team, you can generally play this role yourself and leave the paperwork to your software.
Generally, if you find yourself getting frustrated, confused or distracted by HR tasks instead of focusing on the things make money, it’s time to find a better solution. Liability is too high to do otherwise.
Accounting & Finance
Just like with HR, you might think you can handle your own business finances just fine, especially if your business is small.
And actually, maybe you can! But is that how you should be spending your time, considering the many accounting programs designed just for small businesses?
Accounting and bookkeeping may be the perfect example of the type of repeatable, data-driven tasks suited for software and analytical specialists.
Examples of Outsourceable Areas in Accounting / Finance
- Taxes – most people already outsource their tax filing, but certain accounting programs go farther by making sure you’ll have the right data ready to go when you need it and filing all additional forms
- Payroll – one of the most commonly outsourced areas, particularly useful for businesses whose paychecks vary from week to week (payroll may also be included in certain HR programs)
- Accounts receivable – send invoices, follow up on invoices, and report on income
- Accounts payable – track receipts, track employee expenses, pay invoices
- Budgeting and forecasting – use your data to project into the future
- Reports and KPI dashboard – software programs can give some great visuals of your key performance indicators so you have them at a glance.
When You Should Outsource Accounting
Just as with HR, it may seem counterintuitive that small companies are the ones to benefit the most from outsourcing accounting.
However, many accounting and bookkeeping programs are designed to be super useful and affordable for small businesses — even sole proprietors. Bigger companies tend to be the ones with more complicated needs that require the touch of a hands-on professional.
Small business owners can even take advantage of such professionals by outsourcing higher level financial finance work. Some hire high-level CFOs part-time for as little as a few hours a week to stay on track with their bigger financial pictures.
The bottom line, though, is that if you can’t quickly get a sense of your company’s finances or find yourself spending hours compiling and reconciling data, something needs to change.
Entrepreneurs tend to be great at big-picture thinking, which is needed to create a great product and to lead a company. The opposite of big-picture thinking is being focused in on small details — and that type of analytical mind is just what’s needed for accounting.
If you don’t have that type of mind, find someone who does so you can focus on your own strengths.
Although accounting and HR tend to be the biggest sources of back-office neglect, another area that might be better off in the hands of a specialist is office administration.
Administrative assistants often take care of back-office tasks like scheduling, organization, project management and document management. Although these tasks aren’t as specialized as the others and don’t require intimacy with tax law, they can be repetitive, distracting and done haphazardly when no one is dedicated to them.
If you’d like an administrative assistant but can’t afford one full-time, try hiring part-time or remotely — or both. You could also hire a remote personal assistant to help take care of your personal scheduling issues and tasks, which frees up more of your time for business.
There are also programs that can help. Calendly and similar scheduling apps can save lots of time on the back-and-forth that typically accompanies scheduling meetings, for example. Project management programs that streamline document organization and communications abound.
For more examples of project management programs and automation, check out our related post: Systems, Process and Automation: Stop Working For Your Own Business.
The bottom line is that you need these and other back office functions to be handled with care and expertise, especially if you want your business to grow.
If you’ve been telling yourself that you don’t have the time, money or the physical office space to get help with back-office tasks, it’s time to explore some of the newer web based software and hiring tools that can get you the resources you need.
What back-office tasks have you struggled with in your business? Tweet us at @TKOfficeSpace.