Accounting is essential for any business enterprise because it helps keep track of all daily transactions. It also provides the basis for preparing the final accounts of an organization. Those include income statements, balance sheets, cash flow statements, and statements of changes in equity.
That said, there are several benefits of preparing final accounts of a company. For instance, they allow business owners and managers to understand how their business is performing. Apart from that, it can help them know the liquidity position of their firm. But more importantly, it helps other individuals and groups—from shareholders and potential investors to lenders and employees—make wise decisions when dealing with a particular firm.
Though you can utilize an in-house team for accounting services, it might be more advantageous to work with an accounting company depending on your needs and circumstances. That’s where outsourcing business accounting functions come in.
What Is Business Accounting Outsourcing?
In general, outsourcing is the practice of entrusting a third-party firm with some of your key business functions. So if you’re going to outsource accounting, you’ll have to get in touch with an accounting firm. Rather than employing full-time accountants, you can hire a registered company on a seasonal basis to take on accounting tasks on your behalf.
Of course, not all service providers deliver quality solutions. You have to find a reputable firm for outsourced accounting services if you’re after excellent outcomes.
What Are The Advantages Of Outsourcing Accounting Services?
Outsourcing your accounting comes with numerous benefits. Here are just some of them:
1. Reduce Your Expenditure
Expenses are a major concern for businesses, and if you’re not careful, they can affect your profitability margins. If you want to either maintain or improve your business profitability, you have to take the necessary measures to minimize costs without compromising the quality of your products or services.
Although there are several strategies you can carry out to accomplish that, outsourcing your accounting functions is among the most effective ones. It enables you to lower your labor costs. Take note that staffing expenses entail everything from monthly salaries to allowances to health care and social security benefits. But when you partner with an outsourced accounting firm, you don’t have to pay for such yet you’ll get the same, if not better, results.
Since you can hire an accounting firm on an as-needed basis, you won’t need to employ full-time accountants. Apart from that, such companies utilize their own equipment and applications when providing services. You won’t need to acquire additional computers or tools just as you would for new in-house employees, which would also help keep your business costs down.
2. Attend To Other Core Business Activities
Business owners face several constraints. One of those is the lack of time to address all issues at hand. If that’s the case for you, consider turning to a company that provides accounting solutions.
Working with an accounting firm gives you more time to concentrate on other critical business operations. For instance, it allows you to focus on your managerial roles, thus ensuring that your company runs optimally. Aside from that, outsourcing something as time-consuming as accounting tasks enables you to monitor your employees closely and provide them with guidance, thus increasing their productivity.
3. Get Professional Advice
If you want your enterprise to thrive in the competitive world of modern business, it’d be a good idea to work with experts such as certified public accountants (CPAs). A CPA is a professional who has undergone rigorous training and has passed the required exams in order to obtain their license. In addition, many of them have been in the industry for years, so they can handle all kinds of accounting-related issues and situations with relative ease. You can be sure that they’ll get things done right on time, every time.
Accounting firms may be able to provide you with expert advice as well. For instance, they can guide you in creating budgets, maintaining your cash flow, and filing your business taxes. They can help you understand some of the complex accounting and financial terms you’ll encounter in various documents.
4. Scale Your Company More Easily
One of the biggest challenges that business enterprises face is gathering enough resources when they’re looking to expand their operations. For instance, they may not have the right equipment and sufficient human resources to create more products or provide other types of services. This can be avoided by working with an accounting firm.
Doing so means you’ll be hiring a company that can grow with you. With them, there’s no need to worry about purchasing the necessary equipment or expanding your workforce just for the sake of getting access to the accounting services your scaling business requires. Whether you’re operating a small or a large firm, such professionals would be able to meet your current and future needs.
5. Benefit From Automation Technology
Today, numerous businesses are looking for ways to streamline their operations. Streamlining has to do with simplifying certain processes. It allows an enterprise to use fewer resources and as little time as possible to produce maximum output. Automation is an innovation that makes that possible.
Business automation involves the use of tools and technologies to perform specific operations with minimum human intervention. Many accounting firms utilize automated solutions when providing their services. This helps save time, reduce errors, and helps lower the chances of their employees committing financial fraud. Their accounting software allows business reports to be generated in real time as well.
6. Meet Compliance Requirements
Today, there are countless regulations implemented for companies. These are rules and procedures laid down by the government and regulatory authorities to guide the operations of various kinds of businesses. For instance, the tax rate applicable to a sole proprietor differs from that of a partnership or corporation.
That’s why there’s a need to work with an accounting firm to ensure that you meet all business requirements. Such establishments would understand what’s happening in your industry, so they can inform you regarding new laws and regulations and help you stay compliant.
Outsourcing accounting functions is one of the best ways to take your business to the next level. In doing so, you won’t only save on staffing costs but also gain access to hi-tech solutions that an in-house accounting team may not be able to provide. And if you choose the right firm to partner with, you’ll have peace of mind knowing that many of your financial tasks are being handled by trustworthy professionals.
Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.
Shammy Peterson says
It sure was helpful when you said that outsourcing your business accountant could allow you to ensure that you will get help in filing your business taxes. This is something that business owners must consider in order to make sure that they won’t deal with IRS call-outs. Also, I could imagine how an accounting company could allow business owners to have more time for other aspects of their business since they handle the tax documents.
Parth Shah says
Thanks Jason for sharing this informative article. Some companies may have monthly bookkeeping responsibilities, quarterly board presentations, and an annual detailed budgeting exercise. Working with a single firm you can trust, one that can provide the proper resources based on the ebb and flow of your accounting and financial needs, makes a lot more sense than engaging (and disengaging, then re-engaging) with different firms throughout the year.
Additionally, company owners and non-profit organisations must adhere to a slew of federal and state rules. You may be subject to substantial fines if your accountant is not on top of things.