Introduction to Outsourcing Accounting
Many small businesses, start-ups, and entrepreneurs find it challenging to hire an accountant. Especially with the right skills to prepare their company’s financial statements, manage bank account operations, analyze financial data, and prepare the outgoing invoices.
Nowadays, it is even more challenging to find a qualified and eligible person at an affordable rate.
More than 1/3 of small businesses are outsourcing their accounting. Interestingly, most small companies that outsource are not feeling comfortable doing the accounting on their own.
Even though it is commonly believed that accounting and bookkeeping must be done inside of the business. But it is essential to ask yourself whether you have the necessary skills and experience to do this job. Also, do your staff has enough experience to coup with increasing accounting tasks. To add it up, 62% of all small businesses think that they overpay their taxes.
Due to this fact, you might consider outsourcing accounting services to a company that is with the right knowledge and qualifications. Also, which company can do the same job more qualitatively and cost-effectively.
For the same reason, many executive directors have noticed various positive aspects of outsourcing bookkeeping and accounting services. Importantly, outsourcing such services should be without any adverse effects on their business, employees, and customers.
Therefore, we want to share the top 7 benefits, which our clients have already experienced after they decided to outsource bookkeeping and accounting.
1. Cost-Saving Accounting Services
In general, most businesses consider outsourcing to be additional, and therefore the unnecessary cost for their business. It is not the right perception at all. In fact, it is the opposite.
Our clients who are outsourcing accounting is willing to reduce their expenses but most importantly, without reducing the quality.
The savings that outsourcing usually provides can be quite considerable as most companies can offer their services at lower cost rates (typically due to lower labour costs at their location).
Besides, by outsourcing, you save money on paying the salaries, taxes, office supplies and benefits for the full-time or part-time employee. You only pay for what you need. There is no loss in productivity costs that come along with hiring full-time employees.
2. Eliminate Time and Costs of Hiring Processes
If you will look at the picture, the recruitment process is a rigorous job. It takes resources to manage it, from creating a recruitment strategy to selecting applicants to interview them. The recruitment process takes your business time, it costs, and you will need to dedicate the time either for yourself or the employee.
Many companies do not consider the time they spend looking for a professional Accountant. And time is equally correlating with costs. It must be accounted for savings of outsourcing business processes.
3. Saving your Time
As your business grows, you will find yourself spending more time managing your money and less time scaling the business. Therefore, outsourcing administrative tasks like bookkeeping and accounting help you to focus your time, energy and resources on creating business strategies. It will be bringing more revenue, as well as networking and building relationships with your customers
4. Expert Accountants and Bookkeepers
Outsourcing may offer you the possibility to hire a professional with a higher level of expertise at an affordable price.
Outsourced bookkeeping and accounting service firms continuously have to improve their skills and qualifications to stay competitive in the market. Imagine, 50 people working in the same office. They can easily share the new accounting trends, solutions and tools. To add more, great accounting companies have more extensive access to training, courses, and they are participating continually.
Moreover, outsourcing to an accounting firm is giving you access to the team of Accountants. For example, at Rockwater Associates, for a low monthly cost your company gets a team of accountants. Not merely one person to deal with different kinds of tasks.
By choosing the outsourcing company wisely, you can be sure that your accounting is in the reliable and knowledgeable company’s hands.
5. Scaling Accounting Easily
The accounting service providers has the amount of availability to scale your services significantly without any lag. For example, if your bookkeeping and accounting tasks exceed the number of functions for 1 employee, you can easily be enforced with the extra workforce. Without the need to go through a rigorous recruitment process.
Moreover, accounting and bookkeeping service providers are charging on an hourly basis. It means you can scale up or scale down the hours without any interruption.
6. Automation technologies
Most businesses use accounting automation software to save time. It will save time, but importantly, it reduces risks. Automating accounting is minimizing human errors. Secondly, in automation software, accountants get real-time reports. They assist in catching potential problems and resolving them at an early stage. Thirdly, it will reduce the probability of internal fraud.
Most of the accounting service providers are highly qualified in the automation tools such as Quickbooks, Sage, Xero, Microsoft Dynamics, SAP and more.
If your accountants are still using only Excel sheets – you are wasting your time and money.
7. An accountant is your advisor
A good accountant will always provide advice on how to make accounting more efficient. Sometimes he might work with a couple of companies and propose an excellent experience from another client. Whether it is about taxation, accounting software or even providing financial advice.
When You Should Consider Outsourcing Your Accounting And Bookkeeping
From our experience working with different companies, outsourcing bookkeeping and accounting tend to work the best when:
- A small business does not require a full-time bookkeeper but needs a person with more skills than the office manager, or receptionist can provide.
- A company of any size cannot find a full-time employee with suitable abilities at affordable costs.
- A growing company is looking for opportunities to scale its accounting and bookkeeping services anytime.
- The temporary services are needed, e.g., extra help with end of the year reports or if a full-time employee is going on holiday, maternity leave, etc.
However, even you will hire a skilled and qualified person, someone (usually the executive director) will still need to be involved in the process while approving invoices, making deposits, reviewing timesheets, etc.