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Small businesses are the backbone of the American economy, accounting for nearly two-thirds of all recent private sector jobs. However, these businesses are often the first to feel the effects of a slowing economy. These uncertain times bring many challenges but, as a business owner, there are several things you can do to protect your business in a down economy.

Here are some things to keep in mind:

Cash Is King

One of the most important things to do in a down economy is to match its pace. You may need to slow down your own operations and expenditures. By avoiding the mistake of continuing to spend at the same rate you were in an up economy, you can maintain a positive cash flow and avoid taking on excessive debt. Consider focusing on the most important investments for now. Be sure to also watch your outstanding receivables. If your customers slow down on their payments, you may need to follow up more often to make sure you’re paid and not left with an uncollectible receivable.

Evaluate Your Supply Chain

Another strategy for weathering a down economy is to re-evaluate your supply chain, something many businesses are already doing in the wake of the Covid-19 pandemic. You could look at both domestic and international suppliers. It’s important to ensure your costs are appropriate and that you’re getting the best possible value. Don’t put all your eggs in one basket, either. You may also want to look for additional sources of supplies to ensure you’re getting the best rate for your supplies, and this could save money in ways you can see more immediately.

Evaluate Staffing Flexibility

You must also prioritize your people in a down economy, even more critical in the current climate, as businesses struggle to bring on new staff. One strategy to consider is cross-training your employees. Cross-training is the practice of training employees in the roles and responsibilities of more than just one position.

If you are a restaurant owner, an example of this might be to make sure all your servers are trained to know how to host the front of the restaurant and that your hosts should know how to wait tables. This way, you’ll have employees who can do more than one job should there be a need due to staffing shortages, layoffs, sick employees, etc.

You might also consider “grading” your employees, protecting your “A” players while making tough decisions about your “B” and “C” players. It may be wise to look at your revenue-producing employees versus your support staff. Should you need to reduce staffing, you’ll want to maintain your ability to generate revenue.

Invest in New Technologies with Immediate Returns

Finally, a down economy can be a good opportunity to invest in new technologies—particularly those that offer immediate returns. Although you may want to avoid making long-term investments right away, you must not let your competition become more efficient while you stand still. Try to look out for technologies that can help streamline your operations and improve your efficiency and integrate them at a slower pace than you might when the purse strings are less tight.

Remember, even if it seems like things aren’t great, every little bit helps. Even if the smallest changes might seem insignificant, a handful of tiny changes is still a handful. Success in an uncontrollable economy essentially lies in how you invest not only your money, but your time and resources, as well.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.  

Technology has led to the development of new accounting tools and approaches that have revolutionized how businesses operate. As a result, the outsourced accounting landscape in 2023 looks promising.

Many businesses have transitioned to cloud-based accounting systems and integrated finance software to manage their books. With many new companies opening and remote work rising, there’s been a tremendous increase in demand for outsourced accounting services.

But with the influx of new accounting service providers in the market, it has become difficult for businesses to choose the right one to fit their needs. Here are five essential tips on choosing the right provider for your business.

#1: Decide What You Need from an Outsourced Accounting Provider

Before you start your search for the right provider, you must first identify what you're looking for in a provider. What type of accounting services do you need? What level of expertise do you require? Do you need a full-service provider or just specific services?

Answering these questions will help you narrow down your search and make it easier to find a provider that meets your specific requirements.

#2: Assess Your Current Accounting Process and Needs

You also need to look closely at your current accounting processes and needs. This will help you understand what areas need improvement and what services you need from a provider.

You should also assess your company's growth plans and decide if you need a provider that can scale with your business. This is important because your accounting needs will change as your business grows.

#3: Research Different Outsourced Accounting Providers 

Once you know what you want and need from a provider, it's time to start your research. There are several ways to do this. You can start by reading online reviews and comparing different providers.

Even more important, ask for recommendations from close business relationships. There’s nothing more valuable than a reference from someone you trust. You can also consult with your current accountant, who may or may not be able to provide these specialized services. Once you have a list of potential providers, you can contact them to get more information.

#4: Interview Potential Outsourced Accounting Providers 

After your research, it's time to start interviewing potential providers. This is crucial because it will help you understand the provider's services, experience, expertise, and approach.

During the interview, you should keep these goals in mind:

• Find out what tools and processes they use
• Check online reviews and testimonials
• Get a sense of their customer service
• Learn about other services they offer

#5: Make a Decision and Implement the New Provider

After you've interviewed different providers and gathered all the information you can, you're ready to decide. Choose the provider that you feel is the best fit for your business and budget.

Once you've decided, it's time to implement the new provider. Make sure to create a plan for how you'll transition and communicate with your team to minimize disruptions to your business and ensure a smooth transition.

The Bottom Line

Choosing the right outsourced accounting provider is a vital decision for any business. By assessing your needs, researching different providers, and interviewing potential providers, you can find the right partner to fit your specific needs and requirements.

GJM outsourced accounting services offer a wide range of specialty services for businesses interested in handing over the accounting function to a provider and advisor they can trust.

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Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management & advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.