06/01/2019
What Are the Benefits of Outsourcing Your Accounting Work?
Cost
A new business is on a budget leash in its early stages. An outsourced accounting service provider offers the opportunity for a cost-efficient and a time-efficient way of managing a company’s books when compared to hiring someone on staff.
When hiring an in-house accountant, you are adding another employee to the payroll, which also means paying for payroll taxes, vacation pay, sick pay, training, and other benefits. Furthermore, a professional accountant (Chartered or Chartered Certified) does not come cheap.
Outsourced accountants (who also work onsite) are not employees, which means you save on employment costs. You will also save yourself the time and cost that goes into reading through resumes, conducting interviews, hiring and training that person, and dealing with employee turnover. To top that off, you do not need a dedicated office space allocated to them (incurring further costs).
Value for Money
As we mentioned before, when we use the term “accountant”, the expectation is that they will be equipped with the right skills and knowledge of accounting software to guide you on your finances and analyse your spending and revenues effectively. They must be trustworthy and capable of handling your payroll, VAT and taxes. They also are expected to deal with the tax authorities. Finding one person to carry out all these tasks alone is not an easy process and that is why almost all businesses must keep multiple on-staff accountants. On the contrary, if you hire a professional accounting firm, they will find you the right fit to manage your business transactions along with your taxes, payroll and anything you throw at them. They have the best professionals and experts at your disposal to offer tailored service your company requires and charge accordingly.
Skills
We have touched on this already in some ways but this is a key point that needs to be mentioned separately. An accountant must have the right skills to guide the owners of the business in making informed decisions. Professional accountants are trained individuals who have gone through rigorous training and have studied and completed professional accounting courses. These are people equipped with the right skills needed to help businesses make sense of their numbers.
On-staff accountants might not have the qualification or training and therefore, may lack the skills required to handle the entire accounting function and as we have touched on before, having one or multiple on-staff professional accountants may not be the best value for money.
Outsourcing to an accounting firm opens the door for the business to have the entire accounting function handled by a number of professional accountants who have the right skills.
No Strings Attached
You can keep outsourcing your accounting services as long as you need and do not need to commit more than your capacity. You don’t have to worry about their staff evaluation and performance incentive. Moreover, you can take up or drop their services as per your need and request additional chores such as physical inventory audits, monthly internal audits etc.
Contributes to Company Growth
A startup requires a lot of time and energy in conducting its core operation. You will need all your energy and focus to be on the core product or service of the business for it to grow. But chasing invoices and such daily accounting chores will surely not be the best use of time which could have been put to better use. So, if you outsource your accounting service, you can converge your energy and time to focus on your main activity to grow your business and while professionals deal with the numbers.
Check & Balance
Outsourcing your accounting services will keep your other operations in check. Since they are a third-party service, they will perform their responsibilities unbiased and without any external pressures. They can be your extra set of eyes to track where your money is getting spent reducing fraudulent activities or theft.
Analysis
Accounting firms specialise in analysing numbers and are industry experts. Therefore, they can flag issues to you if they see anything that is not common within the industry. Be it analysing margins for your products or comparing the expenses to the industry standard, the experts at the accounting firm can provide all such information.
The value this brings to the business is substantial and is something on-staff accountants may not be able to add.
To summarise, many entrepreneurs and small businesses experience difficulties to determine the right magnitude and skills needed for their accounting department. Even if they do, the cost of a self-sufficient accounting department is expensive. So, the best alternative is to outsource your accounting services and let the professionals handle your finance.
