Why are more companies outsourcing their accounting processes?
Outsourcing the work is not new. Outsourcing certain tasks of the company is a smart way to minimize overhead costs and increase profitability of the company. While outsourcing was a thing of large companies in the past, today with rapid development of cloud based accounting and remote working, the gates have opened to smaller and medium companies sized companies as well. Here are some reasons why more and more companies prefer outsourcing their accounting processes:
- Save Time and Money: Outsourcing the accounting work reduces various employee related expenses such as employee benefits, training and other office expenses. A company also saves itself from potential mishaps by internally hired accountants when the work is outsourced. Further, by focusing more on business activity using focus-based approach, you spend valuable time in management and growth of the business. A company can get out of the distractions of hired accountant by outsourcing their bookkeeping to professionals.
- Access to Expert Accounting Resources: If a small business is doing the bookkeeping by itself, it is not necessary that accountant hired internally is top notch. Small businesses consider themselves lucky if they get their hands-on experienced accountant. By outsourcing the accounting to group of skilled professional accountants, bookkeeping can be done in professional and smart way. Outsourcing ensures that the work is updated in real time and the business is not subject to risk of penalties due to unnecessary delay due to incompetency of hired accountants.
- Regular Monitoring of Accounts: Keeping track of the regular changes in the field of accountancy is an uphill task for the companies. Outsourcing companies have a business prowess to handle as it is their day to day work to keep in line with current accounting policies. Outsourcing companies track all the changes happening in the accounting world. They make sure that their client looks good in the eyes of market regulators and tax bodies. Outsourcing companies keeps the business in line with changing GAAP, IFRS guidelines and other accounting standards.
- Improve business processes: The most underrated advantage about outsourcing the accounting is that it helps improve the existing accounting process. Outsourcing companies employ best practices of accounting in the industry and improves efficiency and effectiveness of work movement in the company. Proper periodical closure and review of books and adapting robust internal checks on balances of accounting by the outsourcing companies helps in smooth functioning of business. Access to latest accounting software and payroll programs ensures improvement in service levels, effective cash flows and helps the company in further growth.
- Reduces Fraud: Various studies in the accounting field concludes that internal accountants are subject to manipulation of accounts in general than outsourced accountants. Outsourcing provides the best solution to adapt strong checks and balances in internal control. Outsourcing accounting firms provide proper fraud protection controls to the company.
- Option of Scalability: Outsourcing the accounting work means the company is expecting to minimize its investment in human resources and technology. This gives the company the perfect opportunity to react quickly to the dynamic business environment. Outsourcing helps the companies to be in pace with surged demands/orders. Outsourcing the accounting work provides the company a lot of dynamism and options.
- Cloud Based Access to Financial Data: Most of the outsourcing companies use cloud-based accounting services to the company providing real time update to the company. Companies can access financial data and records like inventory on hand at anytime from anywhere. With timely and accurate accounting, companies have proper outlook on financial health of business allowing companies to make more confident and informed decisions.
- A Proper Business Partner: When the company outsources its accounting, it gains a business partner that is expert professional in the field of accounting. With the advice and knowledge of these professional and experienced individual professionals, companies can build better businesses around with good advisory in place. The company can be very much be at peace knowing that its finance, accounting and tax tasks are completed within the deadlines. Further outsourcing puts an end to difficulties of hiring a qualified and competent accountant while doing the same tasks at lesser cost. Outsourcing allows the company access to best of services of accountants at a far lesser cost. The clients are focused knowing that highly qualified accountants look after their books.