Top 6 Benefits of Outsourcing Accounting & Bookkeeping Services!
Are you an entrepreneur?
Owning a small business or are you just a start up?
Are you finding it difficult to hire an expert accountant?
Yes, then this guide is for you. The leading enrolled agent training institute in Hyderabad-iLead Tax Academy brings you some intriguing facts regarding outsourced accounting & bookkeeping and why businesses need to consider it? What are the potential benefits? and much more. Read on to learn more:
Most entrepreneurs, start-ups, and small businesses find it very challenging to hire a professional accountant. Especially with the right skills and expertise to prepare the company’s financial statements, manage payroll, transactional operational, analyze financial data, and prepare the outgoing invoices too.
These days, it’s even more challenging to find an eligible and qualified accountant at an affordable rate.
Today, most organizations & 1/3rd of small businesses are outsourcing their accounting, bookkeeping along with their IT or HR processes. Still, there are numerous ways that outsourced accounting & bookkeeping can benefit a company (small or large). Keeping your company’s finances accurate and well-tracked is where an experienced accounting firm could lend a hand.
Even if the common belief is that bookkeeping and accounting should be done internally. But, it is important to ask if you have the requisite skills and experience for this work. Also, do you have enough experienced employees on hand to handle an increased amount of accounting & bookkeeping tasks. To put this in perspective, 62% of all small businesses believe that they are paying too much for taxes.
Because of that, you may want to think about outsourcing your accounting services to a firm with the proper expertise and qualifications. Also, what kind of companies are capable of doing the same work in a more qualitative way, as well as in an economical way.
For this same reason, a lot of CEOs noticed different positive aspects to outsourcing their accounting and bookkeeping services. Importantly, outsourcing of these services must not result in adverse effects to their businesses, employees, and customers.
Therefore, we would like to share 6 of the main benefits to those who have already experienced the outsourcing services. Before that let’s know what is outsourced accounting & bookkeeping.
What is Outsourced Accounting & Bookkeeping?
Outsourced accounting, bookkeeping is a service that provides the complete experience of an accountancy department to small businesses. The accounting department handles the daily transaction recording, accounts payable, accounts receivable, payroll, managerial financial reports, and a variety of other services.
Outsourced accounting providers have an all-in-one staff of accounting professionals, which allows them to offer a smaller team of accountants for less money than hiring.
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Why Should You Consider Outsourced Accounting and Bookkeeping?
Every business is different, and they will know the best time to transition their accounting to an outsourcing firm. However, there are a few reasons that are most common to make the switch.
- Budgetary Issues
Decreased cash flow enforces firms to make strategic choices regarding where to save up. Since accounting is not a central process for many, finding a service provider to handle this is easy. This also frees up limited resources, which can focus on core competencies, customer acquisition, and retention.
- Investor Capital
Once investors start checking your company’s portfolio, it is very important to be able to show them complete & accurate financials on paper. Providing a solid accounting may convince them to invest. It is important to build credibility through good documentation.
- Financing from a Bank
When your firm is more mature as well as ready to grow it might require additional financing from a bank. The same goes here, correct, thorough financial statements are required.
- Advances in Technology
Because of improved infrastructure and cheaper communications operations are more independent from location. This would give any business much more choices in trading partners and levels of competence than before.
It is resource-intensive trying to keep up with all of the technical advancements in accounting, both in terms of time and money. To ensure that all aspects of a company are taken care of, outsourcing is an easy solution.
- Function of accounting changes
Outsourcing helps a business to do this, as well as simplifying processes that are needlessly complex and time-consuming. The legal regulations for accounting and finance are stricter than ever.
It has more rules and laws because authorities and the public depend on this type of information in making financial decisions.
Top 6 Benefits of Outsourced Accounting & Bookkeeping Services
- Cost-Saving
In general, most businesses view outsourcing as an extra, therefore an unneeded expense to their businesses. This is simply not a valid view. In fact, it is just the opposite.
The savings outsourced typically provides can be quite significant, since most companies are able to provide their services for lower costs (typically because of lower labor costs in their locations).
Also, with outsourcing, you save on paying salaries, taxes, office supplies, and benefits to full-time or part-time employees. You pay for just the things that you need. There is no productivity loss costs associated with hiring permanent employees.
- Optimize Time & Costs of Hiring Processes
If you look at the chart, hiring is hard work. It takes resources to run, starting with creating the recruiting strategy, selecting candidates, and interviewing them. The hiring process takes your company time, costs money, and you need to devote that time either for yourself or for your employees.
Many businesses fail to take into account the time spent searching for an experienced bookkeeper. And time is just as much related to costs. It should be taken into consideration when cost savings are made in outsourcing a business process.
- Saves your Time
As the business grows, you will find that you are spending more time managing your cash, less time scaling your company. Therefore, outsourcing administration tasks such as accounting and bookkeeping helps you focus your time, energy, and resources on building the strategy of your business.
This will generate greater revenues, and also allow you to build networks and relationships with customers.
- Expert Accountant & Bookkeepers
Outsourcing can give you a chance to hire an expert with high-level of experience for a cost-effective rate. Outsourced accounting and bookkeeping services firms must constantly upgrade their skills and qualifications in order to remain competitive on the marketplace. Imagine having 50 people working at one office.
They could easily share new trends, solutions, and tools for accounting. To add more, the top accounting firms have greater access to training courses (accounting & QuickBooks online training), which they are constantly participating in.
By choosing an outsourcing company wisely, you can rest assured your accounting is in a trustworthy, competent hands.
- Scaling Accounting is Easy
The accounting services provider has a sufficient number of resources available to significantly increase the services without any delay.
Also, the cost of the accountants and bookkeepers is charged per hour. This means that you can increase or decrease your hours with no disruption.
- Automation Technologies
Most businesses are using automation software for accounting to help them save time. It saves time, but more importantly, it also mitigates risks.
Automating your bookkeeping is the ultimate in minimizing human error. Secondly, with automated software, the accountants receive reports in real-time. These help to identify potential problems and fix them early. Third, they reduce the likelihood of insider fraud.
Most of the accounting services providers are well-versed with the automation tools like Quickbooks, Sage, Visma, Xero, Microsoft Dynamics, SAP, etc. If your accountant is still using just Excel sheets — you are wasting your time and money.
A good accountant will always offer suggestions for making your bookkeeping more efficient. Sometimes, she may have worked with a couple of companies and offer a great experience to a different client. Whether that is on taxes, accounting software, or even providing financial guidance. For comprehensive EA certification courses in Hyderabad along with job assistance you can count on iLead.
The Takeaway
There are substantial benefits to clients who choose to outsource their accounting tasks. For one, the cost-effectiveness, and finally, flexibility with respect to contracts or scaling of functions.
Accounting and bookkeeping are an integral, yet complex, part of a company. It requires both time and specialized knowledge. Without accounting expertise, many errors may happen that could cause the company to shrink, and possibly go out of business.
However, even if you are hiring someone experienced and knowledgeable, somebody (usually an Executive Director) still needs to take part in the process, when approving invoices, making deposits, reviewing timesheets, etc.
Once you have decided on outsourcing, your next step is to select the outsourcing company which would fit well into your goals and objectives, but more importantly, be able to meet your needs and requirements.