When we need to outsource accounting & bookkeeping?by Ledger Bench LedgerBench is your trusted accounting & bookkeepi
Business needs both financial and management reports for the growth of its company. Your business needs basic financial reporting for compliance and making sure your books are accurate. As the business grows, you find it difficult to tackle every aspect of your business. Most bookkeepers only know how to handle billing, collections, deposits, payroll etc. When you reach a point where a bookkeeper is not sufficient this is when outsourcing comes into the picture. Accurate and timely accounting is vital to keep your business afloat.
What is outsourced accounting and bookkeeping?
Outsourcing accounting and bookkeeping is a service which provides full accounting experience for small businesses. An outsourced accounting department handles day to day transactions of the business, accounts payable, accounts receivables, payroll, management financial reporting and many other services. Outsourcing offers a team of professionals at a lower cost as compared to hiring in-house.
The following reasons will compel you to outsource your accounting and bookkeeping services:
- Accepting outside investor capital
- Employing more than ten people to carry out your accounting activities
- Reaching $1 million in revenues.
- The business owner cannot be involved in every aspect of the business
- Requiring more sophisticated financial reports for decision making
- You see outsourcing as a competitive advantage without any upfront investment of time and money
Benefits of outsourcing Accounting Bookkeeping services to a third party:
Focus on core business:
Core competencies are the USP of the business, senior management skills and competitive advantage that are responsible for business growth. Outsourcing accounting activities frees up management’s time and focus on core activities of the business to grow and sustain the business and increase profitability.
Removal of In-house burden:
By outsourcing to a third party, a business eliminates time and money on training, staffing and recruiting their accounting staff. As a manager, you already have human resources issues and a CEO will not want to increase that burden by appointing an accountant department. The outsourcing company has a dedicated accounting team. This team has greater productivity at a fraction of the cost for a full time accounting department.
Outsourcing is beneficial for startup companies as well. These startups need a scalable accounting platform right from the beginning and are often required to submit business operations plans to their stakeholders in advance.
Access to experts:
One of the biggest advantages of outsourcing accounting and bookkeeping activities is to get access to accounting and business technology experts. These experts devote their time and energy to keep up to date with technology keeping your business in mind. These experts are well equipped with advanced technologies that can benefit your business.
Peace of mind:
Outsourcing accounting services offers complete peace of mind and offers scalable service. This peace of mind keeps management focused on sales, customer relationships and building value in the business. It also ensures confidence in the accuracy and a quality of the business financial information. Outsourcing accounting offers scalable service options that provide efficiency and complete peace of mind.
Security of data:
Your accounting data is stored on a secured server in the cloud protecting against any physical loss of data and to enhance business continuity and disaster recovery.
Compliance Vs. Reliance:
The difference between an inhouse CPA and outsourcing firm is that the CPA typically focuses on tax and audit compliance whereas an outsourcing form enables reliance such as providing financial intelligence which can help you in making reliable financial decisions.
Compliance ensures things to get done while reliance provides actionable financial intelligence at your fingertips to make data-driven decisions.
Increased operational efficiencies:
Outsourced accounting firms can increase efficiency for your business by designing and optimizing financial systems with a combination of automation and integration to deliver greater financial reporting capabilities.
Decision-Ready Financial Intelligence:
Better insight allows for better financial decisions. A traditional CPA would not be able to derive in-depth knowledge. Hence, a business owner needs strategic decisions that impact profitability of your business.
Outsourcing business accounting and bookkeeping to third parties saves at least 30 percent of your cost which is less than building and maintaining an in-house accounting department. However, the true value of outsourcing bookkeeping and accounting service is not just restricted to cost saving. Businesses choose to outsource to improve their core business activities, to avoid the risk of hiring more employees and also to gain access to expertise that small businesses could not afford otherwise.
Created on Jul 2nd 2020 03:28. Viewed 206 times.