More and more businesses are operating on tighter budgets, but a lot of leaders have found that outsourcing some functions is an effective way at keeping high levels of quality and saving costs at the same time.
Accounting and bookkeeping services are one of the most cost-effective functions any small business can outsource to a third-party firm.
With the availability of advanced financial automated solutions and a whole range of cloud-based systems, businesses from various industries, small and large, are taking advantage of what it could do for them.
With that said, let’s take a look at our top 5 reasons to outsource your accounting.
Save Costs
When outsourcing accounting, you avoid any additional operational costs your business could do without.
Basically, when you outsource you only pay for the actual accounting and nothing else which immediately eliminates any costly benefit packages you would offer a full or part time employee.
In fact, the cost benefit analysis of outsourcing accounting compared to in-house bookkeeping can save your business up to 40% in monthly costs.
Plus, until your business reaches a certain size and level of activity, it’s unlikely that you’ll need a full-time, 40-hours a week accounting professional, especially at only one level. When done properly, you can avoid wasting resources on full-time employees that you might not fully utilise.
Instead, outsourcing is a long term strategy that can help fill the gaps before employing full-time accounting staff. It saves you money as you cut the cost of wages as well as lost productivity costs, and you only pay for what you need whilst still retaining the level of professional resources required for your business.
Better Use of Time
Not only does outsourcing your accounting save you money, but it’s a better use of your time too. And time is the most valuable resource any business has.
By putting your accounting into the hands of professionals you trust, you can focus on what you do best – running your business.
Think about it, if you’re managing your own accounting and stressing over numbers that mean nothing to you, you’ll quickly be distracted by backend office functions that take you away from other operational tasks that generate top line revenue.
But outsourcing means you can enhance an environment where employees can focus on those areas that drive revenue – leaders should focus their time working on the business rather than in the business.
Expertise
Outsourced accountants rely on years of experience to give you the best practices and processes.
And as your business grows so will these processes, therefore outsourcing means you’ll never lose sight of your bottom line as they take care of this function for you.
By outsourcing, you’re effectively hiring a team of accounting experts, professionals who know tax codes and laws inside out, and are up to date with the latest tax information.
Not only that, but outsourced accountants tend to work around the clock for your business but for part the pay; typically staffing options are executed per task so you’ll have the most qualified individuals right when you need them.
As such, outsourcing accounting gives you access to a wealth of financial knowledge so you can stop wasting time trying to figure it out when an experienced accountant can give you a clearer view of your numbers and your exact margins to maximise profits – the more you understand what’s driving your bottom line results the more effective decisions you can make.
Reduce Risks
By outsourcing your accounting function to a professional service provider, the security of your books and records is enhanced as you have a third party to audit your money trail.
One reason being, is that the professional will employ rigorous safeguards to ensure controlled access, confidentiality and backed up data.
In comparison, in-house processes sometimes have difficulty addressing confidential information and puts data at risk from things like fire, theft or even hackers.
Furthermore, hiring an external accountant will reduce fraud. It’s unfortunately an ugly reality but employee fraud happens and statistics show that businesses with less than a 100 employees are most vulnerable. As such, outsourcing can eliminate this as they’ll easily recognise any red flags.
Improved Processes
An almost hidden benefit, but many businesses don’t realise that outsourcing your accounting function gives you the opportunity to enhance and upgrade your existing accounting processes.
To put simply, outsourcing to accounting professionals means they’ll have the best practices and controls needed to improve efficiency and be able to retrieve data in a timely manner. Small businesses can make the cycle it takes to close books smaller, create a benchmark and develop a baseline for financial processes that help meet regulatory requirements.
Essentially, outsourcing means access to up-to-date accounting software, implementing better payroll processes as well as improving service levels, reducing costs and creating a better cash flow to position your business for growth.
Gone are the days of jumbled records and complicated spreadsheets, a good outsourced accountant will help you find the appropriate software programmes your business needs and have the best knowledge of what will work best for you.
Today, there are many accounting softwares that include apps to help you communicate with your accountant any time of the day: you can upload receipts, bills, expenses, mileage etc.
Wrapping Up
Overall, outsourced accountants improve processes and ensure bills and vendors are paid on time, as well as following client invoices and creating reports needed for your bank or business development meetings.
Plus, they can help make tax season feel like a breeze whilst making certain you’ve not overpaid or missed payments, and offer invaluable guidance to protect your assets.
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