Outsourcing Accounting: What You Need to Know
With today’s technology, businesses have the opportunity to outsource their back office services to benefit from greater expertise and efficiency, and one of these services is accounting. By outsourcing accounting, businesses can access more reliable financial records, better use of resources, with savings on payroll and operational costs. However, outsourcing can bring its own set of risks and requires careful consideration to ensure businesses make informed decisions to derive the above benefits.
That’s why it's essential to understand what needs to be considered when selecting an outsourcing solution, whether you intend to grow your accounting team or are just beginning to do so. In this article, we will look at what you need to know about outsourcing accounting and its benefits for your business.
What is Accounting Outsourcing?
Accounting is essential to running a business, whether small or established. It will help to track and evaluate the business' financial performance, measure and budget resources, make accurate forecasts, and develop effective strategies for growth. Accounting tasks take up valuable resources and time and often require a specialised set of skills.
Especially within the Australian market, accounting skilled resources are becoming harder to find, attract or retain and salaries are rapidly increasing. Due to these reasons and more, many companies are now outsourcing accounting roles. The concept of accounting outsourcing is to hire a professional from outside your company to provide accounting services on a long-term contract. By outsourcing, businesses are able to lower their overhead costs, free up their revenue generating or client facing staff, take advantage of expert knowledge, and access new technology.
How is Outsourcing Accounting beneficial for small businesses?
If you are running a start-up or small business, you know how important it is to keep accurate financial records of your operations. You might also have time constraints, increased workload with limited resources and a lack of funds to continue to hire onshore.?
By outsourcing accounting tasks, small businesses can experience cost savings, greater efficiency, and time savings allowing them to stay on top of their finances.?
Here’s are some major benefits of outsourcing accounting:
Accounting outsourcing may offer small businesses substantial financial advantages. Due to limited skilled resources at your budget, small firms often find that outsourcing their accounting needs can be more affordable than hiring an in-house accountant. Payroll taxes, insurance rates, and general overhead expenses related to in-house accounting will be less expensive for you.
An outsourced accountant may provide you with insightful information about the financial health of your company. They can provide you with advice on rebates, tax benefits, interest rates, and other financial factors you might not be aware of. This is especially helpful for start-ups that haven't had a chance to gain a lot of accounting experience.
When you outsource accounting tasks to an outside specialist, your data is kept safe and secure. This is especially important if confidential financial information needs to be shared. By outsourcing, you will have peace of mind knowing that your data is securely stored and managed by an experienced provider.
Outsourced accounting services typically include modern, advanced software and technology such as XERO, FreshBooks, QuickBooks Online, and various other business-specific platforms that can enhance your business’ reporting capabilities.?
Small business owners have more time to focus on other crucial revenue generating aspects of their business when outsourcing is fully embraced. You can focus on creating new goods, growing your business, or just providing better client service by delegating the financial responsibilities to the experts. You can cut costs and increase cash flow in your company by handling finances more effectively and efficiently.
Must read also: 10 Reasons to Outsource Your Accounting Operations
Tips on how it will work for your business
Even though outsourcing is constantly expanding and advantageous to all businesses, you still need to know the best strategies for outsourcing accounting in order to maximise its benefits.
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Tip no. 1: Know your needs - you need to know exactly what type of accounting you’re looking to outsource. Knowing your exact needs, you’ll be able to find the right partner who can help you.
Tip no. 2: Establish a budget - before taking on any accounting services, determine the costs that you'll incur and compare them to the value of the services you'll be receiving.
Tip no. 3: Choose the right source - your outsourcing partner should be able to meet your needs and requirements. Many businesses are opting for BPO companies in the Philippines, as it is established as one of the leading partners in the BPO industries.
Related blog: Clark: Why it’s the Best Outsourcing Destination
Tip no. 4: Communication is the key - you will have an easier time working with an outsourced accountant if you invest your time in your partnership. Give feedback and have meaningful check-in calls or meetings.
Tip no. 5: Set expectations - make sure that you know and set what is expected from both parties to ensure that you are not compromising on quality and that everyone’s needs are being taken care of.
Roles to Outsource in Accounting
There are a number of roles within the accounting industry that are particularly well-suited to outsourcing, meaning businesses can take on an experienced, professional team without taking on additional staff.?
Here are some of the roles to outsource in accounting:
When should you outsource accounting?
Accounting can be a complicated and time-consuming task, even for the most experienced business leaders. Knowing when it's time to outsource your accounting needs can be a difficult decision to make, but in most cases, it makes financial sense to outsource this important task sooner rather than later.
For startups and small businesses, it's important to evaluate the resources available before making any decisions on outsourcing accounting. Having in-house accounting staff can save money in some cases, but it may not be a viable option if the company can't afford the costs associated with such an endeavour.
On the other hand, larger organisations are often well-positioned to outsource their accounting needs and can benefit from the additional manpower and expertise that an outsourcing partner can provide. In such cases, the cost savings associated with outsourcing can be significant, and the additional oversight can offer greater assurance that the financials are accurate and up-to-date.?
Below are five signs to watch out for to see when you should start considering outsourcing your accounting roles.
Choose the right partner to outsource your accounting
Now that you know more about outsourcing accounting and have identified the factors that need to be considered before making a decision, it’s important to act fast to ensure the success of your business.
Outsourcing companies in the Philippines are a top-tier choice when it comes to offshoring, and with so many choices, it could be difficult to know which partnership suits you best.
At optiBPO, we partner with you to plan, build, and manage dedicated teams in the Philippines. We provide world-class accounting expertise and services that meet international standards and provide efficient solutions.
Speak with the experts today!