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How Important Are Outsourced Accounting Services?

Bookkeeping and accounting services are paramount for SME’s especially when operating in a competitive environment. The services ensure that business financial matters are kept in check and financial decisions and steps are taken when it is absolutely beneficial to the business. It can be a tedious task to handle financial matters making outsourcing very helpful. The services offered by professional accounting companies or individuals are cost effective and reliable. Any SMEs will find outsourcing accounting services beneficial in different other aspects.

· The services free the management of tedious administrative tasks. This makes it easier for it to focus on financial decision making at a much higher level to the advantage of the business.

· The accounting services also offer businesses professional accounting expertise. The external access to these services is not only cost effective, but also seals any loopholes there could have been when the work is handled internally.

· The services bring staff turnover to an end and this for the benefit of the business. You can have a smooth ride through your finances with the services without worrying about handling accounting staff.

· When hiring accounting services, you can be sure that payroll data and any other financial information will remain confidential. The possibilities of such information being shared amongst staff members are eliminated and this can promote harmony in the workplace since nobody ends up feeling devalued.

The Accounting Services

Accounting can be broad. When hiring services in this context, you stand to enjoy a variety of services depending on what you feel is most appropriate for the business. The common accounting services, you can outsource include the following.

· Preparation of shareholders and directors management accounts

· Listing of accounts payables and accounts receivables

· Cash book and bank reconciliation maintenance

· Preparation of detailed listing of fixed assets

· Management accounts preparation and group consolidation

· Preparation of audit statements and schedules

· Preparation of balance sheet, profit and loss statement and trial balance

· Clearing of audit queries and liaise with auditors

Choosing Accounting Professionals

Accounting services are offered by many companies today. It means you will need to ensure you play your cards right to end up with the best professionals for the business accounting needs you have. Begin by evaluating if your business really stands to gain from the outsourced services and the kind of services you are after. It will act as a good starting point with your search for the best.

Experience – It can determine how good your service provider is. Accounting experts with experience in finance, auditing, taxation, costing and accounts are the best to handle your business needs.

Services and tools – There is a need to ensure that your provider can actually handle the specific accounting needs you have as a business and has the right technological tools to make the process swift and as pleasant as possible.

Charges – They will of course depend on the services you want to enjoy, but should be in line with what you can afford. Stick to your budget for the safety of your business.

Business Accounting Services – Consideration of the Two Sides of the Coin

When was the last time you came across broadcast advertisements such as “Contact us for your business accounting services needs” or “We provide world class professional accounting services” on printed media or internet portals? Well, with the growing popularity of outsourcing primary accounting functions to expert third parties and service providers, it is common to find services providing firms, offering a wide range of services to global clients. The synonyms for professional accounting services may vary from user’s bookkeeping services to accounting reporting delivery services, but the areas of service delivery are the same.

There is an increasing demand for firms offering world class business accounting services and tax and finance related solutions for entrepreneurs and SMEs. The cost effective and error free services provided by the professional service providers helps business owners save time and energy spent in languishing over the books of accounts and other standardized accounting processes. It is a fact that these non core functions do not add to the bottom line and the resources saved through outsourcing the same can be utilized for more strategic and core processes, that help in generating revenues.

The limited time, energy and monetary resources are encouraging the small and medium enterprises to look towards outsourcing the taxation and accounts related work processes to professional accounting services firms. These third party experts are highly experienced and equipped with the best technologies and software to take care of all the processes related to the handling of accounts, generation of final accounts statements, filing of tax returns, management of accounts receivable and payables, planning of tax benefits and providing valuable consultancy in all matters related to all financial aspects of the client’s enterprises.

The outsourcing of business accounting services helps in cost reductions and efficiency in areas related to accounting software, vacation and sick leaves, employee turnover and training costs, locking of office infrastructure and equipment, employee incentives and medical benefits, etc. The advantages of availing professional accounting services are many and awareness about the same is leading businesses into outsourcing their primary functions to external agencies.

Along with the pros, there are certain disadvantages that have to be kept in mind by the business owners to avoid complications at a later stage. It is important to hire the services from qualified and experienced firms, as mistakes or omissions in the accounting procedures will lead to a lot of mental stress, penalties, punishments due to non compliance and legal hassles. Non timely submissions of the statutory documents and accounts to the authorities and failure to meet deadlines can lead to the loss of reputation of the firm and termination of business operations in certain cases.

The relationship between the business providers and the client establishes the grounds for the safety and confidentiality of the strategic financial information related to the client’s business. The absence of ethical measures in the processes followed by the professional services provider firms may lead to the exposure of highly sensitive data to rival companies and competitors. This leads to litigation and disputes and unnecessary legal hassles for both parties.

Benefits of Outsourcing Accounting Services to a Professional Accounting Firm

The extent of your business financial transparency and the level of expertise of the people responsible for such transparency will influence the growth and expansion of your business as well as its survival. This is why accounting and bookkeeping are some of the most crucial aspects of any business and should only be taken care of by licensed professionals with wealth of experience.

Regardless of the size of your business and niche, as it grows, the need for keeping accurate and transparent financial records also grows with it. This is a good reason why such aspect of your business must never be treated with levity. Considering the relationship between in-house accountants and other employees under the same roof, outsourcing your accounting functions is often the most appropriate option in ensuring financial transparency in every facet of your business.

But what exactly is outsourcing? It is the practice of giving out some job functions or responsibilities to a company or an individual that specializes in providing services for such functions or responsibilities, rather than have an in-house employee or department handle such jobs.

Here are the key benefits of outsourcing your accounting functions to a professional accounting firm:

Gives you enough time to focus on business growth

Outsourcing your accounting functions will give you all the time you need to direct your attention on other crucial aspects of your business. Once your accounting responsibilities are outsourced, you can focus on delivering high-quality services or products to your customers and prospects.

Also, you can develop strategies to break into new markets and expand on existing market etc. focusing on these core business competencies and less on the burdens of accounting accuracy and transparency will translate into business growth and profitability that will outweigh the costs of outsourcing.

Your payments will always be on time

Once you outsource your accounting functions you no longer have to worry about missing payments such as unpaid bills or invoices not going out on time. If your invoices are delayed, payments get delayed too and your business cash flow ultimately suffers.

Also, if your bills are not paid when they are due, you will receive collection calls, vendors will limit or stop their discounts, and you may even spend more time trying to resolve shut-off notices, unhappy vendors and grumbling collectors. But with a professional accounting firm handling your accounting, you can seat back, relax and watch your entire business accounting functions run smoothly.

You don’t have to bother about turnover or absence

With your accounting functions outsourced, your business accounting will be done every day, every week and every month and you wouldn’t have to bother about things like vacation, illness or turnover. The company you outsourced your functions to will be working for you round the clock ensuring professionalism in every facet of your job without excuses such as vacations, illness, absences, etc.

Maintaining your cash flow during growth

The survival of almost any business is tied to its cash flow. Once a business begins to grow, it gradually sucks cash. During periods of major growth, accounting functions are often relegated to the bottom of administrative responsibilities list. During such moment, you may not have the time to review your business report, manage collections and invoices, and your bookkeeping may end up in a very bad shape.

At such periods you will easily notice that while your business is thriving, you have no cash in the bank to show for it. Digging yourself out of such hole may require twice of the effort it took to get into it and you can easily lose sight of your business core competence while trying to dig yourself out.

Save money

Outsourcing saves money! When you outsource your accounting functions you don’t have to bother about things like health insurance, vacation, sick time, payroll taxes, retirement benefits etc. The company you outsource your accounting functions to will bill you for its professional services and workers time depending on the agreement you signed.

The money you should have spent on an in-house accountant can be re-invested into other crucial areas of your business. Also, in the long run, you get to save a whole lot of money by outsourcing your accounting services.

Your business accounting will be done by top-notch professionals

Accounting companies that perform outsourcing services are often made up of top class accounting professionals with several years of experience and education to survive without being hired by just one client. They have skills, experience and expertise to deliver with speed and accuracy.

You don’t have to bother about the level of competence of their workers or if they have the required experience to do your job as expected. Once you outsource your accounting services, be assured that your business accounting functions are in good hands. Also, you don’t have to go through the rigor of screening accountants, conducting tests, interviews etc. before hiring. You can skip all that once you outsource your accounting functions.

You’re still in charge

It is easy to assume that once you outsource your business accounting functions you will lose control of your money. That is a pure fallacy. Outsourcing gives you greater power to control your money and puts you in the driver’s seat of your business financial matters. Every payment will require your approval before it is done. You will be involved in every relevant communication chain with your clients and prospects and your accounting reports will be consistent and up to date.

Without a strong bookkeeping and accounting services, it will be difficult for any business to thrive and compete in its niche. Outsourcing your accounting services will give your business the edge it requires to be at the forefront of financial transparency, recording and absolute accuracy in all its transactions and accounting related matters.