Should I Outsource Accounting?

As companies keep operating on slight budgets, some have found that it is a good way to maintain high quality and low costs by outsourcing certain functions. It is not a new concept to outsource. Companies have been transferred to third parties for many years, for instance bookkeeping, accounting and CFO services. While the floodgates of outsourcing have opened up and more and more companies reap the benefits once seen as a possibility for larger firms in the past.

A recent KPMG survey shows that about 40 percent of companies planned to use outsourced accounting to an even greater extent. With the provision of advanced financial automation solutions and a flood of cloud-based systems, all types of companies, both large and small, benefit from what they can do for their companies.

You can save up to 40 percent of the cost compared with the cost of a staff when you outsource your accounting operations because you have not to pay any benefits packs, training or equipment. You could actually save money by outsourcing.

These are some of the main reasons why your accounting function is outsourced:

1. Save Money and Reduce Overhead – Businesses typically spend between 2-5% of their income on training proper and employee internal accounts. Saving money and reducing overheads — Although it may appear to be a small amount, outsourcing your accounting can actually reduce your overall costs by eliminating employee benefits, training, accounting software, hardware and office provision expenditures. You are also saving money from a financial mistake’s potentially negative consequences. Inconveniences like this can cost you much more than bringing an outsourced provider to do the job correctly.

2. Save time and increase efficiency in operations – With less spending on bills and payrolls, you can spend valuable time, which can be shifted back into running your business and growing it. As an expert in your field, using this expertise is essential to focus on business objectives, growth and the management of your daily activities.

3. Expert Accounting Resources Access – If a small company does its own accounting, it is likely that the person responsible for the job is not a principal accountant. If you are lucky, somebody in your staff may have an accounting background but this is not your core skills. You will have access to a team of qualified accountants with a wide variety of experience in the area through outsourcing. You are thus always up-to-date on your books, your payroll is paid on time and you are not in danger of being punished by inaccurate documentation and insufficient payments.

4. Save the costs of technology – No additional hardware and software for your accounting needs need be purchased by outsourcing. The provider will have access and the experience and know-how required to use leading accounting software to assist your business properly.

5. Enhancing Processes – One of the hidden advantages many companies don’t realize is the ability to outsource your accounting to improve and improve your current financial accounting processes. Outsourcing providers introduce best practices and controls to improve data efficiency and timeliness. Furthermore, companies have found that they can reduce the book closure cycle and develop better financial bench marking and basic processes that can help them meet regulatory requirements.

6. Risk reduction – Over one in five small companies has trustworthy employees’ money stolen from them (the average loss is $200,000). Strong controls and balance systems can be difficult to enforce without distrusting honest employees, reducing corporate morality. Fortunately, external accounting provides the perfect solution. You do not only save money, time and stress by having experts process your financial reporting, but by recruiting an externalized accounting service provider, you also have a third party to monitor your money trail. By using impartial checks and balances that will also help to improve conformity, you will reduce your risk of domestic fraud.

7. Scale and be proactive – When you outsource your accounting services, you can expect to minimize large investments and maximize production in human resources, technology and infrastructure so that you can scale up and react faster to change. Outsourcing, for example, enables an organisation to manage the surges in activities more efficiently which can be seasonal or based on business cycles. The corporations can instead pass these concerns to the outsourcing provider, instead of having internal resources that are sometimes too busy and slow to other ones.

8. Automate and reduce paper – Did you know that outsourcing your carbon footprint decreases and waste paper, space and time is reduced? Think of it: how much paper and toner you cost and what you are paying for maintaining your fax machine, printers and/or copiers is easy to be taken for granted. Imagine how much less paper and storage you need if your entire financial information is electronically accessible instead. With less paper, you will be more organised and have less time to file and store hard copies.

9. Everywhere, every time. Financial data access – Cloud-based accounting applications now offer you online access to financial data and records, providing you with up-to-date access from anywhere from information like cash balances. You can have full visibility into the financial health of your company by timely, accurate accounting records and reporting on hand so you can make decisions with confidence and know-how.

10. Confidence and peace of mind – You will get full visibility in the financial health of your business with timely, accurate accounting records and reporting that will give more peace of mind to make precise, informed decisions. You can be assured that your financial data is correct by outsourcing your accounting, avoiding potential risks from fraudulent business and gaining access to a team of experienced accounting professionals. Regardless of your size, outsourcing is only business-worthy. It gives you confidence and safety that your financial activities are right so that you can focus on your business growth.

So, when should an enterprise outsource its accounting?

There’s no bad time to think about outsourcing. It is the perfect solution in all phases of the game for small and medium-sized enterprises. Just think about it, no matter if you have a staff of three or 300, you will still have the same payroll and reporting requirements. The bottom line: the sooner you start outsourcing the sooner you can take advantage of your competitors and get ahead of them. Learn more about simplifying your environment and giving you the freedom to develop your business! Simply Finance team!

For a free appraisal and quote, contact us now.

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