You may have been running your own business for years, but you still have a lot of responsibilities. Managing finances and keeping track of all transactions in books called “books” should be at the top of the list. We’ve compiled a list of key benefits and drawbacks before hiring accounting outsourcing services.
Why should You Choose Outsourcing Accounting Services?
Accounting outsourcing services is the ideal solution for any small or medium-sized business that wants to focus on growing its core competencies while outsourcing mundane tasks.
The knowledgeable outsourcing professionals will easily handle everything from bookkeeping to complex consulting engagements. It provides valuable insight into how the best decisions can be made based on information and peace of mind knowing that the tasks have been handled by someone else.
Outsourcing Accounting Services can be obtained:
- Back office support
- Customer billing and invoicing
- Filing and submitting taxes
- Running financial reports
- Paying your bills
- Payroll processing
- Bookkeeping and reconciliation
- Financial planning
- Industry-specific accounting tasks
Whether you are a startup or the CEO of a large corporation, outsourcing accounting services will assure you that everything is in order and accurate.
Pros and Cons of Outsourcing Accounting Services
Pros #1: Cost saving
Hiring an accounting outsourcing service can be less expensive and cost-effective than hiring an in-house staff. For example, you don’t have any attributed overhead costs for your new employee, such as PTO or health insurance, which could add up when considering how much money is spent on them alone versus outsourcing.
And suppose the company has a large number of qualified employees. In that case, there will never be a time when one person isn’t enough because each person brings something unique to the table, so it’s always beneficial no matter what situation arises.
Pros #2: Being proactive in business management
As CEO, you must concentrate on your company’s long-term vision and growth. Outsourcing accounting teams that spot red flags before they become major issues is critical for making confident financial decisions. This also provides peace of mind in knowing how things are going financially, whether or not there is a problem.
Pros #3: Increased transparency
Fraud can occur when one person has access to and control over your company’s finances. This is because it is simple to manipulate the books and have fictitious expenses go unnoticed for months or even years- so don’t put your employee’s word in it! Multiple warning signs indicate fraud; often, these cases result from employees feeling financial pressure because they don’t know what else they can do to avoid losing their jobs entirely, leaving businesses vulnerable if cheating occurs at any point during ownership.
When you outsource your accounting needs, not only are the numbers checked more thoroughly than if a single person checked them, but with multiple pairs of eyes on these transactions and reports (both internal and external), fraud is less likely. We must always have robust controls because they cannot be ruled out completely. Someone specifically dedicated to this role will help detect any anomalies before they cause too much damage.
Cons #1: Hidden Costs
Scope creep is when a task snowballs into multiple unanticipated costs (or is forgotten about). To avoid this, ensure your month-to-month relationship is clear and expectations are established from the start, reducing the possibility of scope confusion.
Cons #2: Having Less Control over your activities
There are some risks to consider when looking for accounting services. You can’t walk down the hall and inquire about every financial event; communication in this relationship is essential, which will occur through weekly updates or monthly reports (depending on the situation).
Because they don’t know what each role entails, business owners may hesitate to hand over control of their books. However, beginning with an onboarding process in which everyone defines roles and policies ensures that both parties have clear expectations in the future while also helping to alleviate any anxiety about change.
Cons #3: Not local personnel, even different time zones to manage
Both in-house teams and outsourced accounting firms have advantages and disadvantages. However, suppose you need your team members to be immediately available for questions. In that case, an external company will most likely be able to respond faster than someone on staff could due to time differences around the world or a lack of contact information, which may result in incorrect solutions. Therefore, knowing what’s better ahead should factor heavily into the decision-making process before selecting one option over another.
An outsourcing relationship can become muddy without clearly defined communication schedules and responsibilities. Take the time to discuss this with your outsourced provider from the start so that you can have peace of mind while they work on projects for which you are paying them well.
Bestarion Can Assist You In Managing Your Accounting Tasks
Outsourcing your accounting tasks may be the ideal solution if you want to free up your time and energy so you can focus on growing your business.
Our expert team at Bestarion provides excellent Finance and Accounting Services. We can handle everything from bookkeeping and invoicing to tax preparation and financial reporting. We’ll collaborate to create a tailored outsourcing solution that meets your specific requirements and budget.
Contact us today to learn how we can assist you with your accounting tasks.