Top 10 Reasons to Outsource Your Bookkeeping, Taxes, and Compliances to a Professional Firm
Outsourcing bookkeeping services is not a new concept. For many years, this was a practise followed by the bigger brands to save both their time and resources. Accounting services for small business has gained a lot of popularity in the recent times among the smaller and mid-size companies with more and more companies outsourcing a part of their services like bookkeeping, accounts, taxes, and compliances to a professional firm.
With the availability of advanced level of financial automation and cloud computing systems, many Small and Mid-sized Enterprises (SMEs) are opening up towards outsourced financial services and understanding the many advantages it can provide to their organisations.
If you are one of the SME’s which has not outsourced its accounting and bookkeeping yet, read further for 10 reasons why you must consider it.
ü Cost Saving and Reduction in Overhead Cost:
For a small sized company, cost cutting and saving are terms which play a vital role in their growth. Ideally, a company spends 2-5% of its revenue in training and recruiting human resources in the accounting department. This percentage might look small, but considering the other costs to a company, like the employee benefits, training needs, software licenses, hardware and other related supplies, this leads to a lot of difference in overall profitability. Outsourced accounting service would also eliminate any expenses and losses due to unforeseen financial errors and glitches, which are often more than the outsourcing cost. Apart from these, management will also be saving on the additional computer and software licenses required, and the team and expertise to run and troubleshoot it.
ü Leaving the Job to the Experts:
Employing well qualified Chartered Accountants is very expensive, and the lesser qualified accountants might not have technical expertise on the subject. This might lead to errors in bookkeeping and decision making. In addition, companies might even have to face issues like inaccurate paperwork, penalties or underpayments. Finance and accounts outsourcing services will give the companies access to skilled accountants and professionals leading to error-free accounting and better business compliance. It is always best to leave certain things to the experts for healthy organisational development. An organisation must focus more on their core competencies and development than on administration and accounting. Organisations can also get a better collection of receivables by outsourcing it to bookkeeping consultants who can follow-up and get all the company’s payment account receivables in time- all this while still maintaining the amicability of the company with its clients.
- Flexibility and Scope for Improvement:
With outsourced accounting and bookkeeping, companies have a scope for improvement and up-gradation of the prevalent accounting process. This keeps the organisation updated with the latest market standards of accounting and the best practices. It ensures a decrease in redundant errors and breaks the cycle of financial glitches which happen over time. Companies also get access to the latest financial software and accounting procedures, thus paving the way for better cash flow and organisational growth. With all the books accurate and well kept, companies will be in a better position with regards to taxation.
ü Focus on Organisational Growth:
Every company has its own goals to achieve which is essential for its growth. Through outsourced financial services, management can focus more on achieving these goals rather than spending countless hours in bookkeeping, taxation, and business compliances. Also, the business owners can effectively transfer the recruitment budget in hiring resources to grow their business and ensure that the majority of their employee strength are direct revenue generators to the company.
ü Unbiased and Honest Financial Advice:
Often, during a financial crisis, an internal bookkeeper or accounts personnel tends to be more defensive and partial towards the company’s financial status. This increases the risk of window dressing or manipulation of financial data to make the company’s performance look more lucrative or favourable. Outsourcing bookkeeping services would minimise such incidents. The advice solicited will also be more impartial, practical, reliable, and unbiased. It would not favour the organisation and would provide a clear and transparent picture of the financial status saving a lot of humiliation and defamation later. An outsider’s view on recent sales drop, business profitability, and other related business information can help a lot in an organisation’s development and growth.
ü Data Privacy:
One of the main aspects linked with outsourcing bookkeeping services is protecting financial data from internal stakeholders. Most of the accounting and compliance processes are highly complicated with heavy repercussions of data leakage or privacy breach. It is very important that such data be kept confidential and away from prying eyes. Accounts outsourcing and bookkeeping is the safest way to go about this.
ü Improved Internal Compliance:
Through outsourced accounting, companies can rest assured that there are no internal frauds and financial manipulations happening, without having to enforce strong checkpoints and regulations which might hamper the employee morale. The organisational money trail is monitored on an expert level thus decreasing and eliminating any scope for internal frauds. They have impartial checks to ensure improved and better organisational compliance.
This is an important factor in favour of outsourced accounting. An outsourced bookkeeping and accounting process has scope for scalability. It can grow or decrease as per the organisational demands and needs. There is no need to lay off employees when the needs are less demanding, and hire when the demand increases and the organisation grows.
The service provider will already have a buffer of accountants ready to fill in the gap as and when the need arises. Hence, the company can choose to have additional resources to support in order to meet deadlines and targets or reduce when the demand is less. This enables the organisation to react to change more effectively and handle activity surges due to seasonal or business cycles.
ü Automation and Less Paperwork:
A virtual accounting team enables a faster and greener way of bookkeeping and data maintenance. It reduces a lot of costs and decreases the carbon footprint of a company. There is less paperwork to manage and record. There are fewer chances of losing data due to maintenance issues. Most of the accounting would happen electronically and makes it easier to retrieve and track for future reference. Also, the process ensures fewer errors and is more organized.
ü Easy Access Anywhere:
With outsourced accounting, organisations also get to reap benefits of cloud computing. One can access the financial data and records online from anywhere, without the need of any additional software. Management can choose to view their cash flows, balances, and other accounting data from anywhere at the touch of a button. This enables a better and evolved way of decision making. Organisations can rest assured that the data is updated and recent.
Outsourced accounting and bookkeeping has paved the way for better business management and more efficiency. The process is also very cost effective and profitable for the SMEs in the long run as it saves a lot of time and resources which can be effectively utilised elsewhere.
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