Outsourcing has its benefits for small businesses - The Outsource Blog

As a small business hawking big machines, Brokk Inc.?s prime mission is to get state-of-the-art, Swedish-made demolition equipment into the hands of specialized contractors across North America.

To abide by city, county and state tax laws in 35 states, Brokk dedicated one of its 15 employees full time to managing sales-tax collection and payments. But then the Monroe, Wash.-based heavy equipment distributor discovered Avalara, an online accounting service that specializes in managing sales tax obligations end-to-end.

Some work was involved in integrating Brokk?s bookkeeping records into Avalara?s Internet-run systems. But it was well worth it, says controller Jeff Weimer.

?Now we have one (person) who spends a day uploading information and communicating with Avalara and she?s got the rest of the month free,? Weimer says. ?I?m able to use her to collect accounts receivable and do other chores.?

Smaller companies, such as Brokk, with robust sales and a cadre of dedicated employees, hustle for every edge to generate millions in gross annual sales. Many get to a point where it makes sense to consider outsourcing the most basic of daily operational chores.

Identifying necessary but mundane tasks ? and turning them over to a specialist firm ? can free up capital and manpower. Then precious resources can be redirected to tasks directly related to growth, such as customer relations, production and sales.

What?s more, the efficiencies gained at this ground level of commerce can have a ripple effect through the wider economy. According to the U.S. Small Business Administration, companies with fewer than 500 employees account for 99.7% of U.S. firms and 64% of new private sector jobs.

That?s where specialists, such as Avalara, that relieve small businesses of ancillary tasks can serve as an accelerant.

Tracking sales tax
One such area is the collection and payment of sales tax. Sounds simple, but it?s not. With budgets tight, local governments across the nation are stepping up sales tax compliance campaigns. Amazon.com and the Direct Marketing Association have gone to court to fight huge sales tax bills imposed by taxing authorities in Texas, Colorado and California.

Meanwhile, new rules have emerged clarifying when companies must collect and pay sales taxes in jurisdictions where a company may not have any offices yet is proactively pursuing sales.

Texas authorities, for instance, recently singled out Logos Bible Software, based in Bellingham, Wash., for a sales-tax audit. Logos sells multilingual Bible-study tools and resources that preachers and scholars use on their PCs and mobile devices.

Logos Chief Financial Officer Andrew Skipton says he wasn?t too worried about the audit because the company has been using Avalara?s AvaTax product since 2007.

?Knowing the sales tax we collect is accurate down to the house number provides us with a great deal of comfort,? says Skipton. ?We provided the examiner with our monthly Avalara reports, and our audit resulted in no additional tax due.?

Avalara CEO Scott McFarlane points out that sales taxes are the source of a large percentage of local government revenue in most states. As the economy rebounds and more small businesses thrive, rising sales-tax receipts means consumers are back to spending.

It also signals that local government treasuries are filling up again, which should help restore government jobs and programs at the local level, he says.

?Let?s face it, collecting sales tax is not that interesting, but what sales taxes do for local governments and the local economy is really impressive,? says McFarlane. ?It?s part of the fuel that makes our economy run, and we?re excited to help in that process.?

Streamlining expense reports
Another company helping small businesses eliminate operational headaches is Redmond, Wash.-based Concur. Its technology enables employees to file expense reports on the road, in near real time, using their laptops, notebooks, tablets and smartphones. That includes scanning taxi and restaurant receipts with a cell phone.

Concur then provides company bookkeepers with rich detail about where every penny is spent on travel and entertainment. Concur?s Internet-based technology automatically gleans and correlates this data from credit card transactions.

The information can be ? and quite often is ? integrated with Intuit QuickBooks, an accounting program used by many of Concur?s small-business clients, says Sarah Kuberry, Concur?s director of research and development.

?You can see who?s spending what, when, where and how much,? Kuberry says. ?You can make sure every item you?re spending on has the greatest impact.?

The Washington Technology Industry Association, a trade group serving 750 tech companies in Washington state, began using Concur last September to streamline expense reports filed by its 11 full-time employees, who travel frequently to conferences and trade events, says Susan Sigl, WTIA?s chief executive.

?Before we got on the Concur product, we did everything on Excel spreadsheets, trying to keep track of receipts, and using way too many manual steps that made it difficult to adhere to any sort of good practice,? says Sigl.

When assistant controller Morgan Audino recently had to wrap up the accounting for a large event, she had Concur?s hosted services dialed up on her computer and was able to largely complete the task by the end of the week.

?It was hectic. I had a million receipts coming in and, with the old system, keeping track of copies of receipts was a struggle,? Audino says. ?Concur is easy to use. You can see instantaneously which receipts you?re missing.?

Tackling telecom
Another mundane chore is the task of providing and keeping current basic telephone and Internet connections. MegaPath, a Pleasanton, Calif.-based company, leases state-of-the art Voice Over Internet Protocol phone systems to small businesses and supplies them with the same highly reliable Internet hook-ups that big corporations get.

MegaPath relieves its small-business clients of the tedious chores associated with managing basic telecom services, especially as the companies grow, says MegaPath?s business markets president Dan Foster.

Take Hunsucker Goodstein, a Lafayette, Calif.-based environmental law firm with 32 employees, including 15 lawyers. Hunsucker began using MegaPath services last year and says it is saving a few hundred dollars a month in overall phone expenses. But more tangible benefits manifest every day, says Tina Riehl, the firm?s administrator.

The VoIP system is more flexible and offers time-saving features that have quickly won fans among the attorneys and back-office staff, she says.

The lawyers, for instance, make heavy use of a call-forwarding feature that can convert voice-mail messages left at a desk phone into an audio file that gets automatically e-mailed as an attachment.

?One attorney was having his assistant listen to his voice mail when he was traveling and relay it to him,? Riehl says. ?This way he doesn?t have to stop what he?s doing to call into the system to retrieve any messages. He can see what?s coming in and go directly to his e-mail to listen to the message at his convenience.?

With a bit of training, Riehl has mastered how to use the MegaPath dashboard to move or add phone sets, and do things like set up tiers of phones to ring when calls come in for specific attorneys? phone numbers.

?We?re, in effect, a virtual staffer for small business,? Foster says. ?We worry about the phone system and the network being always up. This allows them to focus on their business.?

Source:http://www.ksdk.com/news/article/348084/28/Small-firms-benefit-by-outsourcing-mundane-tasks-

Source: http://www.theoutsourceblog.com/2012/11/outsourcing-has-its-benefits-for-small-businesses/

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