How to Know it is Time to Outsource your Accounting

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It seems like an annual ritual for business owners to panic about clearing the accounting and bookkeeping tasks that have stacked up on their desks each time the tax season approaches. If this sounds like you, then why not opt for accounting outsourcing to deal with these issues with ease?

Accounting is an important matter that must be managed by people who have technical proficiency in handling the accounting and financial issues for a company. Recognizing this reality, more and more business establishments hand their accounting process to third-party organizations.

However, simply undertaking accounting outsourcing will not serve your purpose until you have proper awareness about all the facets of outsourcing. After all, this will entail the disclosure of critical financial data to a third party. It is important to choose the right accounting outsourcing company to handle your accounting tasks.

If you are looking at the possibility of outsourcing the bookkeeping or accounting services of your business, take a deep dive into what you should know before making your decision.

What is accounting outsourcing?

Outsourcing is when one company hires another firm to work on its specialized internal services. When you consider external accounting or bookkeeping services, you want to enlist an outside service to carry out all of your business accounting and finance jobs.

Businesses of all shapes and sizes employ accounting outsourcing as one of the more practical management tools. Many companies regularly incorporate outsourcing as one of their methods in strategic planning.

What services do accounting outsourcing companies provide?

Accounting outsourcing firms can take care of your accounting and bookkeeping tasks on a daily, weekly, monthly, quarterly, or annual basis. They can also provide support to your present administrative staff to ease their burden.

Offerings vary, but here is a general list of the services you can acquire from an accounting outsourcing company.

  1. Handling cash disbursement checks
  2. Drawing up input credits and bank deposits
  3. Preparing company payroll
  4. Preparing tax returns
  5. Handling tax deposits and bank reconciliation
  6. Preparing financial statements
  7. Assessment and review of financial results
  8. Bill payments
  9. Budget preparation
  10. Employee health insurance
  11. And much more

Advantages of outsourcing your accounting

  1. Saves you money

Outsourcing is perhaps the most cost-efficient way of taking care of your accounting responsibilities. With outsourcing, you do not need to hire and train an in-house accounting team. Accounting outsourcing firms have professional accountants whom you can “plug-and-play”, as they already know the ins and outs of the accounting system. This means they are more efficient and also aware of potential tax breaks, so you eventually save more money.

  1. Saves you valuable time and resources

As a business owner, your time is valuable. Outsourcing your accounting tasks frees you to focus on other aspects of your firm.

  1. Things are less likely to escape the prying eyes of professional accountants

You pay them to snoop around your financial documents, so that is what they will do. Having a set of eyes that is focused on your financials will ensure that nothing will fall through the cracks.  We are all human, and that means there is a positive side to having objective eyes on your books. 

  1. You will have certified experts right beside you

You will have access to professionals with extensive knowledge and expertise. Creating your financial report may take you weeks of stressful planning, but an expert can do it within days.

 When to consider outsourcing accounting services

Here are the signs that indicate it might be time for you to outsource your accounting services.

  1. Accounting is taking too much of your time, so much so that you cannot run your business effectively

If you are putting in too much time handling accounting yourself, keeping you from other tasks, then it may be time to outsource your accounting. Similarly, if your staff is doing double duties and working overtime, you need the professionals to help you out.

  1. You are worried about your data security

Data security should be among your top priorities. Failure to maintain high levels of security will hurt your business. Worried that your data security may be compromised? Then consider an accounting firm that guarantees secure data storage. That means they should implement state-of-the-art encryption technology that will secure your financial information.

  1. You are scaling your business

One common mistake among small to medium-sized business owners is that they are trying to do everything themselves. This is always a mistake, but especially when you are trying to grow. When you think you are ready to scale your business, then it is time to outsource your accounting.

  1. You are experiencing delays in payroll or billing

You need outside help if you are starting to experience delays in payroll and billing. Doing so will ensure that your paychecks and invoices are paid on time.

  1. You can reduce fraud

Employee-related fraud can ruin your company, especially small businesses like yours. Studies have shown that companies with less than 100 employees are most susceptible to fraud and face a yearly loss of up to $155,000. Having an objective extra pair of eyes looking after your business can help detect and prevent fraud within your company.

  1. Peace of mind

You can sleep soundly at night knowing that you are working with professional accountants to handle your financial documents. You can be sure that your financial information will be up-to-date and accurate.

Conclusion

Hiring an outsourced accounting service can be one of the best decisions for your business. It gives you cost savings and protection for your business.

Choose the appropriate outsourcing firm to do your accounting outsourcing work. Numerous outsourcing firms have attractive offers to do the work for businesses like yours. Research as many things as you can about the company before you let them manage your accounting tasks.

The web is a depot of information and using it in the best possible way is in your hands. Take a look at the services provided by the different companies. Try to get testimonials from companies who have previously done accounting outsourcing from the specific outsourcing company you are eyeing. There also may be BPOs that specialize specifically in your industry. 

Accounting outsourcing can be valuable to you in many ways. All of these benefits depend on you working with the right accounting outsourcing firm. Outsourcing your accounting can provide you with a faster and more efficient way of doing business.

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