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If your company is a brand-new startup with limited resources, you may be outsourcing your finance and accounting functions because you only need a few hours of their time a week. But if you think you’ll eventually hire a large in-house team to handle these responsibilities, you could be wrong.
More large companies are taking their finance and accounting functions away from their internal teams and outsourcing them to specialized companies. For example, Walmart announced in 2018 that it was doing just that “to further improve quality, reduce the total cycle time of our processes, and deliver value that’s in the best interest of our associates and business,” said Walmart Executive Vice President Clay Johnson at the time.
As businesses of all sizes begin to realize the benefits of outsourcing their finance and accounting services, it’s a good time to check out the pluses of this practice.
You’ll Save Money, Time
When you outsource, you’ll get access to expert accountants, finance professionals and bookkeepers at a much lower cost, without compromising on quality. You 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. You can pay for the time and services that you need, and you can change that if 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 on scaling your business.
Your Tech, Data Security Will Always be Updated
Outsourced finance and accounting services can put measures into place to handle the serious data security threats that exist, and they typically invest in impenetrable and expensive security systems. This can help mitigate the odds of data breaches and compromised security programs.
In addition, these firms invest in cutting-edge technology and software to be competitive, and if finance is not your core function, this type of investment does not make sense for you to take on by yourself. With an outsourcing partner, you can benefit from having access to the latest technology at no additional cost.
You’ll Always be Compliant with the Latest Policies
A specialized outsourcing company will remain updated with the latest financial and compliance policies and other accounting rules. That way, you won’t miss important tax or accounting updates, compliance regulations or potential changes on the horizon. You won’t have to sift through each day’s financial news to find this information — the outsourced firm will do it for you.
You’ll Be Protected in Down Economic Times
As situations change economically, companies tend to shift their workforces, which can be a challenging and resource-intensive process. But since the responsibility of managing the talent assigned to a project lies with the outsourcing company, you do not have to make any decisions regarding its internal workforce or pay to retain staff members.
You Can Focus on Core Activities
With reliable back-office support, you can stay focused on value-added, revenue-generating tasks such as business development and making strategic business decisions. As the outsourced company takes care of your financial needs, you can handle the tasks more important to growing your business.