Top 7 Benefits of Outsourcing Accounting & Finance Operations
For every business, ‘Finance and Accounting’ is the most essential and sensitive internal function of all. The operations of every other division ride on it. Investors, consumers, and government regulators depend on the accuracy, quality and timeliness of the work done by accounting and finance teams. So why would today’s CFOs be so willing to explore the option of outsourced accounting and entrust these critical business functions to an external consultant?
As outsourced accounting has evolved over the years, it has become clear that when the right outsourcing partner is chosen, the benefits of the arrangement can be significant.
‘Access to top-tier accounting and finance expertise’ is among the most frequently cited reasons for signing onto an outsourced accounting solution. With outsourced accounting, a company can save money and improve results at the same time. By teaming up with an accounting specialist, generally a CA/CPA, one gets access to someone (or a team of people) who is an accounting professional with a wide range of expertise. This ensures that the books are always accurate, payroll is compliant and completed on time, and the risk of penalties or regulatory mistakes also significantly diminish.
By working with an outsourced accounting team, a company also gets access to all their accounting software and systems, meaning smooth streamlining of processes and automation. Automation not only saves company time but also reduces human error. It further gives companies access to real-time reports allowing one to foresee problems and threats before they occur.
Automating processes also becomes easier when there is a centralised accounting firm that oversees all the accounts of a company. For instance, in case of multiple branches across various locations, the automation needs to be done only at one site, i.e., at the centralized accounting firm. This reduces the tiresome effort of enabling automation & process optimization across every individual location of the company.
Outsourcing accounting services can be quite beneficial when it comes to collecting data from geographically scattered branches/locations of the business. With an accounting firm on board, one can eliminate any discrepancies that may arise from interested employees tampering with information, and that helps in generating accurate results. Moreover, knowledgeable, and experienced accountants can guarantee maximum efficiency and error-free, unbiased reporting. Moving the accounting to a third-party reduces this risk and allows for greater internal control, especially when there are multiple branches involved. And the accounting partner will be able to identify problems, if any – flag errors and notify the management of any inconsistencies.
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With the help of a dependable finance team, the management can be certain that the accounting responsibilities are all taken care of. A good accounting partner also offers useful financial reporting insights indicating the business performance, cash flow, budgeting and more, all of which can be effectively used to improve business operations and increase productivity.
Having a third-party handle accounting work is more cost-effective than hiring someone internally. Hiring in-house accountants can be expensive when factoring in office space, insurance, training, etc. Moreover, onboarding an accounting firm allows access to a team of people with a variety of skills, expertise, industry knowledge versus an employee who can only do one task at a time.
For a growing organisation, having an outsourced accounting firm can hugely facilitate scaling up. Accounting operations can be difficult, and when a company is scaling up it is easy to get overwhelmed and caught up in all the moving pieces. With the right accounting partner, scaling up does not come as a challenge as there is a team in place, ready to support the business growth.
Outsourcing a company's bookkeeping operations frees up valuable time and bandwidth that can be put into expanding the business. It is easier to focus on the business while the accounting partner handles the accounting through use of secured cloud-based accounting software, which enables one to have access to the accounting records of a business from anywhere in the world at any time. That also means one will spend less time overseeing the organisation's financial functions and preparing financial statements, enabling the management to dedicate more time towards the vision and purpose of the business
Outsourced Accounting is for Everyone
Until now, only large corporate companies outsourced their accounting. However, with advancements in technology and the world accepting a remote working ecosystem, outsourcing accounting is a viable option even for smaller businesses and organisations. Today, an outsourced accounting service is suited to anyone whether it is a burgeoning business, a company struggling to hire, Not-For-Profits & Charities, or people who just need temporary help. In fact, outsourcing is a great option for everyone because whether a company has 5 employees or 500, all organisations have compliance, payroll, and reporting requirements.
When picking a firm to outsource your accounting, all you need to do is make a list of the support and services you need (e.g., bookkeeping services, reporting, payroll taxes, tax returns, monitoring transaction fees, etc.) as well as your goals (e.g. increase cash flow, have better visibility into your finances and balance sheet etc.). Then choose a firm with aligned values, someone who understands the business. The perfect partner will ideally have an in-depth discovery process to fully understand your business needs and tailor a unique client offering at no additional cost.