by: Sarah Joson
Tuesday, January 24, 2017 | Comments (0)
Category: Outsourcing Research / Trends
We all know that accounting and bookkeeping are some of the processes that require a lot of attention and time and each company has its own way of handling accounting tasks. Some do it the traditional way, which is hiring a full-time accountant, while others outsource it to accounting and bookkeeping services providers. Thanks to technology, it is now even possible and easy to work with someone offshore.
Now you are probably thinking, Why would someone want to outsource their accounting tasks?
Here are the common answers from various business owners and decision makers:
It’s a reasonable means for small and startup businesses.
Having full-time accountants on board is always an option. However, small and startup businesses have to make every penny count. Also, the level of workload and output is probably still manageable, so it isn't necessary to have someone on board full-time.
They are expanding.
During the process of expansion, the amount of work increases for the internal team. The impact of the growth is more noticeable in the finance team because while developments are being executed, the finance team needs to manage the company’s current/existing finances while making sure that every dollar spent in helping the company grow is accounted for. An outsourced accounting expert could help cushion the additional workload.
Have better control and reduce fraud.
Small and startup businesses rarely have access to controller and CFOs who can look at all the finance activities of the company. These experts are also the ones who are trained to look for fraud signs and carry out fraud protection processes without compromising internal relationships because they are a third party contractor and are expected to be neutral.
So when is the best time for a business to start outsourcing?
Some business owners prefer to do it after filing taxes so that they can start fresh with their outsourced accounting expert. By the time the outsourced accountant steps in, the majority of the work are already ironed out, so the accounting expert will have more time in familiarizing himself with the company's books and finances. Moreover, a clean slate will enable the client and outsourced accountant go through the critical events the company will face throughout the year – making it easier to close and evaluate the books when needed.
Outsourcing can be overwhelming at first, but as your organization grows, it is a great way to dedicate more time, talent and money to the core processes of the company instead of catching up with the routine grunt work and back office tasks.
Accounting outsourcing can help businesses in so many ways. When choosing the right accounting outsourcing firm, don't just go for the bigwigs in the industry, try to look for ones that will bring in additional value to your business and are willing to go the extra mile in helping the company grow.
When is the best time to outsource basic accounting processes? There’s no definite answer because businesses are different in terms of concept, scale, and term. Moreover, it’s difficult to get a benchmark because organizations and markets are constantly evolving. More often than not, business owners and decision-makers do not want to commit to a fixed outsourcing solution. They only do so when they encounter a challenge and outsourcing has become an option. Usually, it happens when the business owner is preparing the company for expansion and realizes that they can no longer manage all the work internally, a proprietor is in the early stages of establishing a company, or when they have stumbled into a financial mess.
But why do some business owners make it one of their goals to outsource accounting to an offshore provider?
It enables decision-makers to focus on their business goals. Having a smooth accounting process enables businesses to operate seamlessly. However, it is painstaking work that leaves minimal room for mistakes and often forces business leaders to allot most of their time out of the revenue-generating work. If done by an external accounting provider, they would have more time to focus on their business goals and core processes.
Business owners gain access to cost-efficient solutions. By outsourcing accounting to an offshore accounting service provider, business owners can take advantage of getting accounting tasks done at a fraction of the costs without sacrificing the quality of work.
A team of professionals will solve your accounting problems. If you think about it, small to medium business owners, even start-up proprietors, usually have a small team to work on their books. There’s no problem with that, but imagine having access to accounting experts who can work together, have the right tools needed for the job, and are updated with the trends in the finance and accounting industry to solve your problems?
Whether you have been operating for quite some time or you’re a new kid on the block, it won’t hurt if you consider different options, especially if accounting is not your line of work. You can benefit from having an external finance and accounting provider to carry out routine accounting tasks, while you focus on higher value work.