It takes more than one person to run a business, it doesn’t matter if you are a tradie or small business. Delegating workload to different employees is based on their specialties and experience. However, not all businesses choose to hire full-time employees when they can outsource the same workload to a third party.
Outsourcing Accounting Services is becoming increasingly popular in the business world. It refers to hiring another individual or business outside of your own for any business-related activity. Outsourced accounting services manage bookkeeping, finance, and financial calculations.
Businesses nowadays are under increased pressure to maintain transparency in their operations – primarily their bookkeeping. Hiring a well-reputable and professional accounting service is, therefore, necessary not just for the upcoming financial year, but also for legal purposes.
We’re looking at five benefits there are to hiring outsourced accounting services!
What Does An Outsourcing Accounting Firm Oversee For Your Business?
An accounting firm, outsourced or not, handles the financial aspect of a business. This includes:
- Everyday transactions
- Accounts receivable
- Accounts payable
- Employee payroll
Interestingly enough, 62% of small businesses assume that they’ve been overpaying their taxes.
They very well might be! Bookkeeping is a specialty of its own and is now a sub-specialty a business owner can take up.
Larger companies are looking to outsource their accounting needs as well – it’s not just small businesses anymore. Why? We’ve enumerated five reasons:
1. Cost Effectiveness
Limited budgets lead to strategic choices. In this case, hiring a third-party firm for your business’ accounting needs instead of taking on a full-time employee can save you quite a bit of money.
Businesses no longer have to factor in salaries, taxes, office unit space, and several other considerations that would have had otherwise been necessary.
It isn’t just smaller companies looking to save pennies on the dollar, large scale companies have begun to delegate financial responsibilities to third-party firms as well because of its cost-effectiveness.
2. Access to Expertise
An accounting firm is more than likely being run by an individual or a group of professionals who have been managing accounting services for a while. Business owners, therefore, have access to an entire unit of accountants via one outsourcing channel.
In hiring an accounting service, you’ve saved time in:
- Hiring a workforce
- Hiring an HR department
- Hiring an IT department
You’ve also saved time and money on having to set up an office space for employees. A third-party organisation basically works as a remote employee. Business owners also save time that would have otherwise been spent with calculators and spreadsheets.
4. Scaling Financial Functions
If the amount of bookkeeping necessary for your business exceeds one employee’s capacity, you’d have to hire another one. This continues as your business grows. While this makes absolute sense, it comes with the aforementioned costs.
A firm would scale your workload and add in more or fewer people to the team accordingly. For example; if your tax returns for the year 2019 are more complicated than for the year 2018, an accounting firm would simply add another accountant to the team.
5. Advanced Technology
Channels for communicating are becoming more and more advanced, whilst also becoming more simplistic in their use and access. This is between businesses and firms.
For firms themselves, a dedicated unit for accounting has better access and budgeting (no pun intended) for supplying better software, and equipment, and hiring professionals for their firm.
All in all, we’ve gone through five major benefits of outsourcing accounting, but the list of benefits is extensive. IJ and EA is an accounting firm that’s ready to take on your business’s financial functions. We offer services, such as; bookkeeping, budgeting, and taxation and understand PSI. All in a bid to help your business grow!