NOTE: Please enjoy this article from LionShark’s special guest contributor Nicole Pharand of NumbersWise Business Services Inc.
A competent administrative team can make a world of difference to your business! You know you have one when your financial department is silent and runs like a dream.
You know you don’t when you’re hearing constant noise about outstanding invoices, collections issues, late bill payments, mismatched expenses, etc.
I know all about this. I managed the administrative department for an MSP business for 10 years, and now I operate a firm that delivers outsourced bookkeeping and financial services to MSPs in North America. Having a team that understands the MSP industry can ensure that your business operates smoothly.
If you’re able to hire a dedicated in-house team, they can become subject matter experts. But hiring staff is expensive, especially if you’re hiring seasoned, experienced professionals. Training your new staff takes time and that is time you could be using elsewhere in your business.
You can save money by hiring junior staff, but that potentially brings on other challenges and more training time!
You can also outsource your financial administration to a local bookkeeper, but chances are they’re also managing the books for the local butcher shop, pet shop, and barber shop. They will not be experts in the IT space.
So why do I believe that industry expertise matters? Read my Top 3 Reasons to Hire a Bookkeeper with MSP Experience below!
Subject Matter Expertise Matters
Hiring a bookkeeping firm with industry expertise is important because they are:
- Experienced with the day-to-day challenges of running a Managed Services business.
- Familiar with the tools that power your industry.
- Knowledgeable about the monthly recurring business model.
The Top 3 Reasons to Hire a Bookkeeper with MSP Experience
1. Experienced With the Day-to-Day Challenges of Running an MSP Business
Running an IT Managed Services company comes with its own unique set of challenges. For someone outside of this industry, it can be very difficult to get them up to speed.
Having experience with all the bill formats and portals for popular IT distributors and SaaS providers in your industry will save a lot of time. Knowing what the bills are for and how to categorize them means your books will be that much more accurate – and useful!
And the IT industry comes with its own language. Have you ever tried to explain to your bookkeeper “…this invoice is for my PSA, this other one is for my CRM. AWS is chasing me for payment on our IaaS, but they missed their SLA, so I’m considering migrating to GCP anyways. And for our SaaS…”
You might expect a blank stare at this time. But your bookkeeper with MSP experience knows exactly what to do.
2. Familiar with the Tools That Power Your Industry
IT Managed Services Providers use a common tool set. Most have some type of Professional Services Automation tool such as ConnectWise or AutoTask. These tools are complex and difficult to teach and learn.
An MSP Bookkeeping specialist is already up to speed on the tools and the training. In addition to understanding these tools, your MSP Bookkeeper can likely teach your staff best practices that they acquired through working with others in your industry.
You already know automation is key in your business; you are likely promoting this idea to your clients on a regular basis. This is also true of your own Accounting Department.
An industry expert will bring to the table a tried-and-true tech stack that will support and automate your financial needs. There is no need to spend time re-inventing the wheel and committing your valuable resources to finding, installing, and learning a new tech stack; your industry expert already has you covered.
3. Knowledgeable About the Monthly Recurring Business Model
Most IT Managed Services Providers have a large portion of their business operating in a monthly recurring revenue model or a subscription-based environment. An MSP-experienced bookkeeper will understand the best practices of monthly recurring invoicing and have a clear understanding of the best tools available to automate the process of invoicing and receiving payments.
A bookkeeper that specializes in MSPs will be able to pivot between time and materials billing, retainer sales, and monthly recurring services without confusion. They will build your books to properly capture your monthly recurring revenue and associated monthly recurring costs so that you can truly understand your profits. Without accurate invoicing to clients and accurate records your business will not thrive.
Conclusion
If you are looking for a reactive bookkeeper that enters data for tax filing purposes, then an industry expert is not what you need. However, if you are looking for a bookkeeper that understands your business model from quote to cash, then having an industry expert on your side is a valuable investment.
Acquiring industry expertise takes years and you may not have time for that so why not find someone who has already made the investment? When an industry expert works with others like your firm, their knowledge base continues to grow allowing all of those serviced by the industry expert to benefit.
If you would like to learn more about how NumbersWise can help your company, CLICK HERE.
