The role of accounting in running a business is fundamental. It’s the blueprint that allows you to measure your progress, manage finances and plan for the future. It also serves as a record for potential lenders and investors and a source of data during times of transition and growth.
For many businesses and solo entrepreneurs, finding an accountant with the right skills can be a tough hill to climb. Managing financial statements, keeping tabs on bank activities, analyzing financial data, and preparing tax reports all require a certain level of expertise. And when your quest is to find one who fits your budget, it could be even harder.
This is why outsourced accounting has been steadily gaining traction. It’s a way to fill a pressing gap without the long-term commitment or financial drain of hiring full-time, in-house staff.
With that said, here are five reasons why outsourced accounting may just be the best option for your business:
1. Access to a Reservoir of Expertise
Outsourcing accounting and finance functions opens the door to a world of specialized talent. These experts, equipped with rich backgrounds from working with multiple industries, bring a suite of knowledge and skills ready to be put to use for your business.
Consider the varying financial know-how needed at different times for a small company:
- Bookkeepers for everyday operations
- Accountants for more complex tasks
- Controllers for oversight
- Analysts for strategic financial planning
Having an in-house team covering all these areas can be asking too much of a small business.
However, the outsourcing model presents the perfect solution. With many outsourcing companies in the Philippines, India and Singapore now offering access to a range of professionals on demand, such as CPAs, CMAs, auditors, and tax consultants, you can be confident that you’ll get the right people to handle various financial tasks.
2. Lower Overhead Costs
Employee-related expenses, like salaries, benefits and health insurance, form a considerable chunk of a company’s expenditure.
According to Payscale, the base annual salary of a mid-level accountant in the US is around $60,000. And when you add other costs like bonuses and profit sharing, it could skyrocket to a total of $ 85,000. This does not factor in things like office space, equipment, as well as proper training for a hire who may not have all the required skills.
Alternatively, outsourcing accounting services to a third-party provider can lower your overhead costs substantially. This means you can pay for their accounting services when you need them, be it an ongoing commitment or a one-off project.
In fact, according to a recent Deloitte survey, cost savings is the main reason 70% of businesses opt to outsource their internal functions, accounting included.
3. Minimal Disruption
In a small organization, every available employee counts. When an in-house accountant is on leave or ill, their absence can be sorely felt. Personnel shortages can cause delays, backlogs, missed deadlines and errors. These are all disruptions that can slow down business operations and affect customer service.
Outsourcing your accounting function means not having to worry about these scenarios. With a pool of offshore talent and flexible staffing options, you’ll always have backup professionals ready to step in at any time.
Additionally, it allows you to manage peak periods of activity or urgent requests more efficiently without overburdening your in-house team.
4. More Time for Core Tasks
If you’re a startup or small business owner, chances are you tend to oversee every single task yourself. After all, your business is the passion project you’ve nurtured from the ground up.
However, minding every aspect of your business is a time-intensive endeavor that requires you to wear many hats. Think about all that goes into making sure your accounts and finances are in order—reconciling accounts, drafting budgets, and preparing tax returns, just to name a few.
All these tasks can take up valuable time and energy that you could spend focusing on core business functions and planning your next expansion phase.
Delegating your accounting duties to an outside provider can liberate you from the burden of financial management and give you the freedom to focus on those large-scale goals.
5. Valuable Data and Insights
It’s one thing to track the numbers and report them; it’s another to truly understand the rationale behind these figures, identify when shifts occur that need your immediate attention, and use them to guide your company’s next strategic steps.
A third-party provider can bring all these to the table. They bring in a fresh perspective and objectively assess your business’s financial standing. They can also offer invaluable advice on how to boost your bottom line.
Better Decisions Start With Accounting Outsourcing
Choosing to outsource your accounting tasks might just be the push your business needs to soar. What’s important is finding a provider that understands your specific needs.
A good first step? Look for a firm with extensive experience, a well-rounded portfolio of customers and rave reviews. With these boxes ticked, you can be confident that your business is in good hands and start making informed decisions today.