A lot of small and midsize business owners are in the market looking for outsourced accounting services. If you are one of those people, then outsourcing accounting is definitely worth considering. With the right services, you can receive invaluable returns.
There is a reason why outsourced accountancy services are so popular among business owners. For small and midsize businesses, managing a functioning accounting department can be challenging. You have to consider many things when setting up an accounting department. If you don’t know what you are doing, it is easy to get lost.
On top of that, you will need to manage your accounting department continuously. It is an additional administrative task that you have to handle. You could easily be using this time to come up with new ideas or finding new clients. When you take up so many responsibilities, you should ask yourself whether it is really worth it for you.
Most business owners believe that accounting and bookkeeping are something you should do inside. Before assuming the same, you have to contemplate whether you have the skills and experience to manage it. Not only that, you have to consider whether you can find the right staff that can do it for you.
According to a Clutch 2019 Small Business BPO Survey, Accounting, and IT Services were among the topmost outsourced businesses in the US. Here’s how it fared against other services.
The same survey showed why most small businesses prefer to outsource their various processes. Here’s a chart of what the reason for outsourcing for these businesses were.
Once you do your analysis, compare any benefits you will get from an in-house accounting department with outsourced accounting. If you need help coming up with the advantages you will get from outsourcing accounting, then look at the list of benefits below.
What are the benefits of accounting outsourcing services?
When you outsource accounting services, your business can receive many benefits. Among the most prevalent benefits, the top ones are as below.
1. It can help you save costs
For most businesses, the decision to outsource accounting services comes down to one thing, saving costs. Other business owners see outsourcing as bearing additional costs. However, you need to understand that outsourcing accounting can actually save you money, both in the short- and long-term.
Some business owners may also associate the lower costs with lower quality services. However, with outsourced accounting services, you can get the same quality of work that you would expect from professionals.
For small and midsize businesses, the savings in costs can be crucial. You can use any money you save on accounting services to finance other parts of your business. Similarly, the prices for outsourced accountancy services are usually at a fixed rate. Therefore, you can always budget for it.
Overall, by outsourcing your accountancy services, you can save different costs. These include salaries, taxes, benefits, or office supplies. You don’t have to worry about employee and labour compliances either, saving you additional money. The firm you outsource to will look after all these things.
2. You get expert and professional accounting services
With outsourced accountancy services, you will receive expert and professional services. Usually, you need to pay much higher rates for expert help. With accounting outsourcing, you can get services from experts for a significantly lower cost.
Outsourced accounting and bookkeeping firms depend on providing the best services to generate income. They also need to provide the highest quality services to retain their clients. Since it is about their survival, you can guarantee you will receive the best help you can get.
Most accounting bodies that these outsourced accountants come from require them to develop their skills continuously. These outsourcing firms also ensure their accountants are aware of the latest changes in accounting and tax standards. Therefore, there is no doubt you will receive impeccable services.
Overall, choosing the right outsourced accounting services can provide you with the best quality and expert services.
3. It eliminates the need for you to manage employees
When you use outsourced accounting services, you don’t have to hire any employees. Therefore, you can save your time and money on the recruitment process. You know how time-consuming and tedious the process can be, not to mention the costs. However, you can eliminate all of these.
Similarly, you will have lesser employees to manage, which is always a good thing. As a small or midsize business owner, you will understand how challenging it is to handle your employees. You can easily spend the time you save on managing a team of accountants on other more important tasks.
Most businesses fail to consider the time and effort it takes to find the right individuals for accounting and bookkeeping. Once you factor in these, you will realize how crucial it is to outsource accounting services.
4. It can minimize your risks
You may not realize this, but your accounting function can expose you to many risks. Financial reporting is a critical process. Any mistakes or errors within it can expose your business to penalties and even litigation. However, that isn’t all there is that is risky about accounting and bookkeeping.
Your accounting department also takes care of other services, such as your payroll and, more importantly, your taxes. Any errors or problems with these areas can take your business down. For small and midsize businesses, handling these situations may be highly costly and tedious.
Accounting and bookkeeping outsourcing can minimize business risks. By transferring the risk to the accounting firm, you can relax and forget about them. Your outsource accounting firm will reduce the chances of any errors with the expertise they bring.
Even if they make any errors, they will be responsible for handling the problems. You don’t need to worry about these risks after outsourcing.
5. It is easily scalable
The great thing about accounting outsourcing services is that you can scale your services. Depending on your needs, you can get customized prices and services. For example, if you don’t need tax services, you don’t have to pay for it. If you don’t need payroll services, you can take that out as well.
Similarly, during the busy season, you will need more help. In those times, you can request more services from your outsourced accountants. Once things settle down and you don’t need as much assistance, you can scale down the accounting services.
Overall, outsourced accounting services are scalable. Through outsourcing, you get more control over your accounting operations. In contrast, you cannot fire your employees when you don’t have any work for them and hire them back when you do. It is why outsourcing is much better.
6. You can get access to better technologies
Having your own accounting department requires you to invest in technologies as well. For example, you will need to have accounting and bookkeeping software, tax software, computers, networks, etc. These also come at a cost.
When you hire outsource accountants, though, you don’t have to invest or care about that. Most outsourcing accounting services firms have the technologies necessary to do most of your work. They are also responsible for keeping their technologies up-to-date for your needs.
Some firms also bring in automation services with them. With these, you can get much better services at lower costs. It is because automation helps the accounting firms significantly reduce the time it takes to process your accounting tasks. Automation processes also come with higher accuracy, resulting in lesser errors.
Overall, you can save both your money and time while getting the latest technologies for your business.
What services can outsource accounting firms provide you?
You can get a variety of services from your outsourcing accounting firms. When outsourcing for accountants, make sure they can satisfy your needs. A typical outsourcing accounting firm should provide the following services.
- Entry of invoices (AR) and bills (AP).
- Bank and line of credit
- Credit card and merchant account
- Monthly financial statements preparations, especially the Income Statement and Balance Sheet.
- Payroll services.
- Year-end and month-end
- Assistance with accounting
- Fixed asset register
- Tax returns.
- Any other basic accounting and bookkeeping
Most firms do not provide these services together. Therefore, you will have to pay to receive some or all of these services according to your needs. However, ensure that the turnaround time they provide meets your needs.
Accounting and bookkeeping services outsourcing has become a popular choice among small and midsize businesses. You should also consider outsourced accounting services for your business as it can be highly beneficial. It also lets you focus on more important tasks while reducing your burden.