Outsourced Accounting is More Than Just Accounting
Emily Olsen, Client Advisory Services Manager
January 6, 2023
Are you facing accounting challenges as a small or medium-sized business owner? Did you know you can hire a qualified accountant to prepare your financial statements, pay bills, analyze financial data and manage your business bank account operations? Outsourced accounting is an effective and efficient strategy that small and medium-sized businesses use to lower operating expenses and streamline processes.
WHAT IS OUTSOURCED ACCOUNTING?
Outsourced accounting refers to the practice of hiring an accounting firm to handle some or all of your bookkeeping or accounting roles. A business will partner with a qualified service provider that assists with the business’s accounting functions and other growth solutions. This partnership allows the company to allocate more resources to focus on growth or other operations.
WHEN TO OUTSOURCE YOUR ACCOUNTING FUNCTION
Here are a few reasons why a business might consider outsourcing its accounting functions:
When you don't require a full-time accountant but need personnel with more accounting knowledge than the receptionist or office manager
When you cannot afford a full-time accountant
When looking for an opportunity to improve bookkeeping and accounting functions
When seeking temporary services like filling end-of-year reports or when a full-time employee is on leave
When a business wants to grow its capacity
TYPES OF FINANCIAL AND BUSINESS TASKS YOU CAN OUTSOURCE
A business can outsource different accounting services from third-party service providers to enhance business operations, such as:
Bank and credit card reconciliations
Drafting financial statements
Payroll tax return processing
Accounts receivables and payable management
Vendor bill payments
THE 7 BENEFITS OF OUTSOURCED ACCOUNTING
Outsourcing accounting enables you to harness the experience and knowledge of finance professionals without the cost and hassle of hiring. The service providers offer valuable insights that help you in decision-making while gathering meaningful data.
Here are seven benefits of outsourcing:
Outsourcing saves small and medium businesses money. It minimizes the cost of hiring an in-house team while saving you the time to focus on business operations. Hiring an in-house team means paying for employees' salaries, insurance, benefits, and other monthly expenses. These can drive up the operating costs of a small business.
2. Access to Expert Accountants and Bookkeepers
Outsourcing accounting gives you access to a team of expert accountants at an affordable price. With their qualifications and skills, experts will quickly fill multiple accounting and financial roles simultaneously. Working as a team, they share new accounting solutions, trends, and tools to streamline and optimize your business operations.
3. Enhancing Operational Processes and Efficiency
Accounting service providers do more than just process transactions. As a business enterprise grows, business owners spend less time scaling the business to focus on business development and revenue generation. Outsourced accounting service providers enable business owners to focus their time, resources, and energy on developing effective business strategies.
The service providers go beyond the transactions by assisting business owners in the following areas, giving them time to focus on business development:
Technology Stack Management
Preparing Financial Statements
A business owner can have peace of mind and focus on business development strategies knowing that the core roles are in the hands of knowledgeable and reliable experts.
4. Scaling Accounting Easily
Third-party accounting service providers can scale your services without any significant lag. When bookkeeping and accounting functions exceed what the current employees can handle, additional resources are easily added. It removes the need to conduct an expensive and time-consuming recruitment process to onboard the needed workforce.
Accounting service providers charge their rates on an hourly basis. It enables a business owner to scale down or scale up their working hours without disrupting business operations.
5. Enhanced Data Protection
With finance and accounting procedures going digital, businesses must protect internal and client data from cyber-attacks and data theft. Small businesses lack secure accounting systems and are prone to data breaches, which can interrupt the business’s continuity, harm their reputation, and possibly lead to a lawsuit. Professional accounting firms have secure cloud servers to protect your data by offering the following:
Cloud-based data storage, secure servers
Disaster management and data recovery
6. Accessing Financial Expert Resources
Outsourced accounting offers your business financial expert advice via business consulting. They hold regular meetings with the business owner to review the organization's financial health and chart a path forward. The service providers have access to your business financial dashboard, putting them in a position to mitigate arising issues on time.
7. Business Continuity
Accounting is time-sensitive, and any disruption can halt or harm the organization's operations and reputation. Poor infrastructure, human capital shortage, and system downtime can lead to loss of records, delayed payments, and penalties. These interruptions affect business continuity and put a business at risk of losing clients to its competitors if not mitigated on time.
HOW WE CAN HELP
If your business could benefit from outsourcing its accounting, we can help. We have a team of experts who can help you reduce your accounting workload and streamline operations. Contact us to learn more about outsourcing your accounting.
We work to simplify complexities, help make critical business decisions, and confidently focus on the things that are truly important to you. We embrace your business as our own to spark the right solutions and help you thrive.