The emerging post-pandemic challenges are driving entrepreneurs to rebuild or reimagine their business’ processes. Outsourced accounting services are becoming a popular choice among businesses that want to reduce their overhead expenses and increase efficiency at the same time. Outsourcing accounting services can help you compensate for any losses you faced in 2020 and to plan or create a budget for a profitable 2021.
Many companies are outsourcing their accounting functions to specialized professionals to improve their cash flow, reduce the total cycle time of their processes, and identify the most and least profitable product lines for their future expansion plans. The team of outsourced experts can provide your company with audit support and solutions to deliver effective cost control measures. These experts can also review your past financial documents and assist you in making informed financial decisions.
As situations change economically, companies tend to shift their workforces, which can be a challenging and resource-intensive process. Since the responsibility of managing the talent assigned to a project lies with the outsourcing company, you can scale up or down resources according to your accounting needs with ease.
Having a remote team of accounting experts allows you to address your financial responsibilities with the guidance of experts, without geographic limitations. The team can also identify the areas that are damaging your income, and suggest strategic plans for your business growth that will keep money coming in.
When you outsource your accounting services to a remote team, you can operate 24/7 with a time-zone advantage and access your data at any time. Therefore, you can be sure that all important tasks will be taken care of in the scheduled manner and on time.
As your business begins to grow and expand post-pandemic, having the right software and expertise will become critical to meeting your accounting needs. Therefore, it’s best to start to look at options for outsourcing your accounting services to a firm that can scale as your business grows in advance.
You can find many companies that can meet all your needs in a wide variety of locations. But by evaluating your options of accounting service providers and studying the market ahead of time, you’ll be in a great position to take maximum advantage of their offerings. Following are the three major benefits that you can discover in the long run after you start outsourcing your accounting services.
Save Time and Money
Entrepreneurs who outsource their accounting services can save time and money, getting access to high-quality accounting services and proactive advice for their important financial decisions. You can also save time, money and stress by moving from an in-house accounting department to an outsourced one. Outsourcing accounting services can save your valuable time and resources so you can explore new partnerships, improve client relationships and expand your business.
As the outsourced company handles your accounting functions, you can stay focused on value-added, revenue-generating tasks, such as building business strategies, bringing in new customers and developing new products. Outsourcing accounting services can free up your valuable time for managing and growing your business.
You'll also save a huge amount of money that goes into office facilities. With an outsourcing partner, you can benefit from having access to the latest technologies at no additional cost. You can also eliminate expenses related to hardware, software and office supplies while still keeping up with technological advances and software upgrades.
In addition, outsourcing accounting can be a critical asset for forecasting and budgeting through every stage of your business. This can also make your business more profitable in the long run by reducing overhead costs and improving your cash flow. When a particular date arrives, if your company doesn’t have the cash that was predicted, the outsourced firm can help you work to figure out why and how to improve.
By outsourcing, you can cut overhead costs because you don’t have to spend money on the salaries of in-house accountants and such benefits as retirement, vacation time and health insurance. In addition, you won’t need to spend money on software and the equipment essential for handling the accounting processes.
Outsourcing can enable you to scale up or scale down the provided resources according to your growing business' needs. With outsourcing, you only pay for the time and services that you need, and you can shift that when your business grows. You’ll also save time since someone else will be handling your finances. This will allow you to focus not just on financial projections and taxes, but also on scaling your business. In addition, you can save money by only using the outsourced firm as much or as little as you need, rather than hiring a new team of employees to handle tasks that come up as your business grows.
When you outsource your accounting functions, you’ll get access to expert accountants, finance professionals and bookkeepers at a much lower cost, without compromising on quality. You can also save on infrastructure fees, employment taxes and other overhead costs since these experts won’t be on your payroll, but will instead be employed by the outsourcing firm.
Generally, the individual goals and needs of a company drive the process of choosing outsourced accounting services. However, an outsourced firm can handle multiple accounting functions simultaneously. An outsourcing company can effectively manage the following accounting functions.
- Accounts receivable/accounts payable management
- Bookkeeping functions
- Financial statements or reports
- Controller functions
- Financial planning and analysis
- Cost accounting
- Fraud or forensic accounting
- Tax reporting and filing
- Payroll processing
Improve Efficiency, Accuracy and Compliance
You’re a busy entrepreneur who’s juggling dozens of tasks at the same time. One area that you can’t afford to ignore is your accounting. In fact, most entrepreneurs consider their financial services to be the single most important part of their business plan. Unfortunately, the accounting function tends to get pushed to the back burner by many business owners, because they simply don’t have the time to invest in it.
Digging into the books, handling accounts receivables, checking that all taxes have been deducted and taking on all of the other accounting responsibilities can be a monumental task that company founders often plan to “get to later.” This plan, however, can leave your business hurting for cash flow, because without a serious commitment to your company’s financial position, you could end up losing your cash.
Outsourcing accounting services provides you with access to the best software and technology to make your accounting functions more efficient and reliable. In addition, your outsourced firm can adopt robotic process automation (RPA) to bring further efficiency to the process.
Once you outsource, you'll have access to a team of highly qualified and trained professionals, who use the latest technology and tools to ensure that your data is accurate and secure. They can keep your financial records up-to-date and accurate while helping you eliminate errors, mistakes, omissions and oversights in your financial documents.
When a company goes public on the market, the requirement of accurate financial reporting fuels the need for quality accounting services. Your team of accounting experts can accurately maintain your books and transaction reports. Thus, they lower the risk of having your books manipulated.
Your outsourced accounting team can help you solve even the most challenging issues of cash flow management. They can help you ensure that all of your invoices are paid on time and accurately, while also handling your financial responsibilities, such as following up on invoices and collecting money due to you.
A specialized accounting outsourcing company can help you avoid tax penalties and maximize tax benefits by complying with federal, state and local laws. Thus, you’ll always be on top of the new tax or accounting requirements and potential changes on the horizon. With outsourcing, you can reduce the risk of any liabilities related to mistakes in payroll or income tax returns, which can attract heavy penalties.
Provide Data Security and Financial Analysis
Your outsourced accounting team can generate accurate financial reports for you to predict future costs and revenues and make well-informed decisions. These insights can help you determine the most valuable clients or customers, business profitability, the amount of money to invest in your growth plan and how to minimize expenses.
Your outsourced accounting firm can draw up cash flow projections for the next year, next quarter and even the next week. This will help you see what changes need to be made and when. Use the projections to foresee slow periods and plan in advance to successfully navigate through such situations. These projections can help you predict future costs and revenues and make well-informed decisions.
Your outsourced team can provide you with a precise and thorough cash flow analysis and oversight of your business. They can also provide you with accurate and timely financial reporting and insights. Such analyses will help you and your investors review the financial health of your business. Your outsourced team can also provide you with powerful analytics to help you understand budgeting concerns so you can always make the right decisions.
The team of experts handling your accounting responsibilities can protect your information and keep it secure. Thus, outsourcing helps you mitigate the risks of a data breach, compromised security program or internal fraud. Your outsourced accounting firm can help you minimize vulnerabilities to various accounting and financial computation errors that may affect your business operations
Outsourced accounting services allow you to ensure that your data is available on the cloud for you to access at any time. This means that although your financial information is well protected and secure, you won’t ever have any problems accessing it, no matter what time of day you need to see it.
Your outsourced team can also analyze your internal processes to ensure productivity, improve security and protect assets from future fraud attempts. They can put measures into place to prevent the data security threats that exist, with impenetrable and high-level security systems.
These partners typically have strategies in place to upload and download documents in a safe manner, and a way to send encrypted or protected emails to one another. Outsourcing accounting helps you reduce the possibility of fraud, as you’ll have a dedicated team of accounting experts who will regularly check your books and transaction reports.
Outsourcing partners make sure that your information remains confidential, but you can ask them to sign a non-disclosure agreement for your peace of mind. They can also provide you with audit support and appropriate records, and assist you with added financial reporting as you grow through the years.
Due to the coronavirus situation being extremely complex and unpredictable, entrepreneurs will face numerous challenges in 2021. The pandemic has affected different industries and businesses in a wide variety of ways. Businesses’ ability to respond to COVID-19’s challenges will be a big factor in their strategies to maintain profitability in 2021. Outsourcing accounting services can help you reduce significant costs while maintaining the accuracy and confidentiality of data. The financial experts’ guidance can help you improve your cash flow and make data-driven decisions, thus leading to a successful 2021.