There are hellish pressures facing small and big business financial departments to improve their business performance. In their search for effective approaches to ensure quality and accurate performance of financial and bookkeeping tasks, accounting outsourcing is gaining popularity.
Decades ago, there was reluctance to delegate to a service provider this critical business function. But after big businesses started hiring accounting services from onshore and offshore locations did small businesses follow suit.
There’s a lot that outsourcing can do when you are embarking to optimize your business performance through the timely and accurate delivery of tax and salary computations and other related financial documentations with government bureaus and agencies.
From hiring a virtual administrative staff, outsourcing bookkeeping and payroll services, and now to accounting outsourcing, the immense impact of the strategy on the growth and productivity of small businesses are now success story examples.
Later in this article, we’ll introduce you to this specialized business function called accounting services, the advantages and disadvantages of outsourcing accounting functions and how you can take advantage of the benefits.
What is Accounting Services?
Accounting functions that keep businesses operational are classified as accounting services. This services include managing the accounts receivable and payable, payroll processing, calculating and filing regulatory and federal taxes, financial statement preparations, and more of the likes.
Financial accounting processes, however, are constantly changing. This constant changes in the system or process are major concerns for companies, especially coping and responding to any abrupt change in reporting finances and income.
Responding to such change can be done proactively or its reactively. The change can easily be implemented based on these proactive companies’ situation, timeline and schedules. And with accounting outsourcing now possible, these companies are in to seize the biggest benefits.
What Are the Advantages of Outsourcing Core Accounting Services?
When it comes to accounting services outsourcing, businesses have the option to outsource all or portion of the accounting processes important to keep the business operational. With a reliable accounting services provider, small to big corporations can reap the advantages associated with making the best use of resources available to their businesses.
Below, we’ll list down the obvious advantages for small and medium-sized enterprises using accounting outsourcing:
Smaller businesses will most often be found outsourcing simply because it’s the most cost-effective way to address limitation in resources. The practice of hiring full time accountant or bookkeeper may be too expensive to shoulder for them compared to hiring a reliable accounting services agency.
By outsourcing an accounting services firm, small businesses will only have to pay fewer salaries and employee benefits. Even the problem with absenteeism will be a big headache buster and ease the worries of delayed posting of payments or getting payroll released in a timely manner.
With this benefit, small businesses earn extra time and resources to focus on improving the production process or mapping through to the implementation of product improvement strategies, and a whole lot more.
Middle-sized companies might also gain from the same benefits that small businesses can derive out of outsourcing accounting works. Other cost-cutting benefits include substantial decrease in office supplies or equipments expenses. Most outsourcing firms also hire trained accounting professionals, which can boost efficiencies and improved business bottom line.
In other words, accounting outsourcing can free up your valuable time while getting accurate, timely and reliable financial information about your business. But, no matter how good the benefits may be, outsourcing to a third party provider can also be counterproductive.
What Are the Disadvantages and Risks of Outsourcing Accounting Services?
Most of the disadvantages of outsourcing your financial and accounting services may have something to do with carelessness, laziness and sloppy decision.
If you fail to conduct a careful research of your prospective outsourcing partners and still decided to outsource to sub-par accounting firms, you will be in for some big troubles.
When you hire an incompetent agency, expect late delivery of financial information and calculation of employee payroll, taxes and benefits. Worst, you are simply waiting for federal tax agencies to hound, haunt and penalize you.
In turn, you are not only wasting valuable money to receive unsatisfactory accounting services, you will soon lose the trust of your very employees and your clients might transfer to your rival agencies.
How to Hire the Best Accounting Outsourcing Services
By this time, you might already be convinced that outsourcing accounting services to a third party provider can elevate your business performance. Here then are some qualities to look for the best and top quality accounting outsourcing companies:
- Industry Experience and Certified Staff. Make sure you are hiring an accounting and payroll agency with expertise and specialized knowledge of your industry. Keep in mind that some of your functions may be unique only to your sector and when an inexperienced accounting services will be asked to perform would take longer to accomplish at low quality standard. Your accounting services provider can only provide what you want if they have trained and certified bookkeepers or accountants.
- Cloud or Web-Based Service Architecture. Find an accounting agency that can provide you with immediate access to your own financial data anytime, anywhere using any devices. Remove from your shortlist the offshoring firm that does not offer this capability because you never can be sure what else they’re incapable of doing to perform for modern businesses like yours.
- Metrics for Quality Assurance. The main reason you are hiring a third party accounting outsourcing agency is that they offer core functions that you lack. Take for example staying current on best practices in finance, accounting and payroll or the most recent tax law and regulatory changes. Look for an agency that can fill the gap for your financial and payroll accounting needs.
Beside the three mentioned above, there are other conditions that you should look when qualifying an accounting services outsourcing company. Among others, the agency should be flexible to match their clients specific requirements.
The point of contact is another important consideration when you hire accounting outsourcing because this will be helpful in addressing concerns that need urgent response or answer between you and your outsourced agency.
Final Thoughts
Accounting outsourcing is one of the best ways to obtain accurate and timely financial information but it can also fall short when you hire the wrong offshore agency. By knowing what qualities to look for when engaging a third party service provider from the Philippines, you can be sure that you’re spending your money wisely.
