Bookkeeping, Tax Filing, Voucher Maintenance- Do All Need to be Done In-House?
A startup or business of any size has piles of work and targets that need to be accomplished every day. It is inconsiderate of us to ask them to function as a whole without the need of a third party to handle some of their processes. Businesses, especially SME’s outsource some processes to such third party firms to reduce the redundant work so that they can concentrate more on their primal product.
Once the task is outsourced, the provider will ensure quality of the process and time-to-time completion of targets without interference from the company. But is outsourcing mandatory for most of the processes? Let us take a look at what a company can outsource and what should not be outsourced.
Most Common Outsourced Processes:
- Content Development
- Legal Outsourcing
- Web Design and Maintenance
- Technical/ Customer Support
- Professional Expertise: The tasks outsourced to vendors are done so because they have a certain degree of professionalism to carry out the process. Their experience in the process will determine their competency in handling your operations.
- Concentration on Core Specifics: Like discussed above, a company would rather concentrate on development of their product rather than scrutinising the problems associated with redundant or minute tasks.
- Risk Mitigation: If the company is not confident in creating a fool-proof process, professional outsourcing companies will help them build such a process with more focus on the risk-mitigating
- Costs: Outsourcing business can help you save a lot more money since there are no promotions involved, no bonuses for employees, save on health benefits, This is a primary reason why in-house is not as favoured when they can transfer a set of duties to a third party firm for a cheaper price.
Advantages of In-house Processes:
- No Risk of Exposing Data: Customer confidentiality is crucial since information of your company in your rival’s hands can be maliciously used against you. This is one of the many outcomes of handling the processes of a company in-house.
- Meeting Demands: Prompt deliverance and high-quality work should be the objective of the outsourcer if you hire one. If you have an in-house expert handling the process, you can guarantee imminent delivery as well as ensure quality since you can keep random checks on the work. As a company, you lose this authority when you outsource.
- Hidden Costs: In the previous section, we stressed that outsourcing can be cost efficient, but there are many costs hidden within the contract that you may have to pay up while signing. These hidden costs may be camouflaged, but they are there to eat up your resources.
- Customer/Company Oriented: Handling processes in-house gives you the advantage to look over the tiniest aspects of the process thus creating processes tailor-made while keeping the objectives of the organisation and customers on priority.
Let us take a look at what can be done for services like Bookkeeping, tax filing and voucher maintenance. Understand that these processes are unique and there is no decisive answer to the above question. It is only after looking at the company’s scenario a valid judgment can be made.
Keeping track of the financial records and the financial affairs of the company is the primary job of a bookkeeping business. There are various bookkeeping software like QuickBooks available for handling this process efficiently.
The right answer to this question would be when you are still in the developing phase. At this point in time, the company is more into developing a product rather than looking over the intricacies happening in the background. As a small startup, you will probably be nonchalant about your client’s credentials even if you fear you have hired the wrong firm to handle the bookkeeping solutions. Cost is another aspect to keep in mind while planning to outsource this process. It is considered best for the accounting services for small businesses to be outsourced at this time. There are various small accounting firms that can handle your business.
When should you take control of the process?
After the startup phase is over and you are becoming a recognised company in your field, many rival businesses would be happy to possess your customer details, transactions details, copies of product information, which are reasons to shift in-house. Other than the fact of the outsourcing firm betraying you, the company would have grown to find professional expertise within the employees itself. In-house would help you get prompt delivery and efficient process handling. At this stage of time, you should probably not worry about the perks of an outsource team but concentrate on becoming independent.
The task of a tax preparer is to maintain and prepare tax returns for corporations or individuals. The primary objective inclusive in business tax services is to find ways to reduce the tax returns of the businesses to increase their profitability. This tax preparation service also deals with the taxes overpaid, complete the mandatory forms required for filing tax returns, etc. Here is a case study of Treelife Consulting and the hurdles they went through the process of tax filing.
Over the years it has been noticed that many businesses find the process of tax filing as one of the most monotonous tasks which can be overlooked by the company since it has no direct influence on product development. It is of course not a menial task but one that needs professional accountant services. So it is better to stick to outsourcing this process to professionals if you are sceptical of being on top of this specific process since it needs you to be acute in bookkeeping, the dynamic changing tax legislatures in every state and, of course, accounting. Most of the SME’s face problems in accounting and therefore small business accounting is outsourced to professionals. Simple software or novice tax filers are not what the company wants at any stage of development. Dependency on accountants to handle tax filing is no way pointing to your incompetency but is helping you to concentrate on the tasks at hand. If you plan to outsource the tax and accounting work, here is a list of tax filing firms in India.
Voucher is the first part of the payables life cycle and there should be a department that looks over this process. Voucher maintenance includes:
- Voucher Approval
- Voucher closure
- Voucher correction
- OpenItem Accounting
Voucher maintenance is an easy task as compared to the other tasks mentioned above. There is no necessity for outsourcing the voucher maintenance to third-party companies. There are various software in the market that will allow you to perform the mandatory voucher related activities with precision and ease. The employees handling this department need not have any pre-requisite knowledge as the software are intuitive and easy to learn. Oracle and MARG are some of the top developers for maintenance of software.
The decision for choosing outsourcing companies or inbound departments is not black and white. There are many factors you need to take into account while deciding which path to choose. Both of these paths are effective if taken in the right spirit. It is always better to understand the needs of the company first before taking a huge step to create inbound processes or hire third party agents. The above-mentioned decisions may be biased and it is thus necessary to analyse the advantages and disadvantages before taking such a huge step. Once this decision is taken, you may have to stick with the outsourcing company for a long time for fruitful results which is why a wrong decision can lead to bad results.
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