Accounting and Bookkeeping Outsourcing - Why is it Important?

Businesses of any size often struggle to keep up with their accounting and bookkeeping as they can be quite time-consuming and costly. Yet, being one of the major functions for a business, they are crucial in order for a company to make the right financial decision. There is where accounting and bookkeeping outsourcing comes into play. Today we will be listing few reasons why you should consider outsourcing, and how you and your company will benefit from it:

What Is Outsourcing

Nowadays, outsourcing has changed how businesses work. It has become a critical part of any business and is widely used by businesses of all sizes to strategically decrease operating costs and improve efficiency by employing another person or organization to do activities, provide services, or handle operations that were previously performed by the company personnel. It can be both an occasional or a regular part of the business depending on your requirements. For instance, outsourcing to an accountant to prepare and file your tax once per year or having a regular outsourcing accounting firm to handle all your finances on a monthly basis can both be a great idea for your company!

When Is The Right Time To Outsource

"Is this the best timing to outsource?", it might be the first thing to ask yourself if you ever consider outsourcing your company's accounting and bookkeeping. Time is unarguably the most valuable asset to a company. You don’t want to spend your time on non-core tasks when you can outsource them and focus on accomplishing and achieving your business’s objectives. As your business grows bigger, you will want to determine the main areas that you want to put in all your efforts to. Looking forward and spending time on what will contribute to the company’s growth is the best decision that a business owner can make for the company. Without further ado, let’s see when is the best time to outsource and what is the benefits of outsourcing:

• When You Need To Focus On Your Core Operations

Core operations are the major emphasis of a business’s activities. In order to remain as the market leader of the sector, most businesses keep their resources and personnel engaged the most in a primary area. However, sometimes it might be difficult for you to allocate all the time and resources to each of the business areas effectively. Outsourcing helps you to deal with that. By outsourcing your non-core activities to professionals, it saves up the time and costs needed so that you can now assign more resources and personnel to improve your core operation efficiency. 

Even if you’re extremely good at accounting or bookkeeping, but still you will not want to focus on them since they are not your core competencies. There are a lot of outsourcing companies out there who are ready to provide a solution to your problem. Therefore, outsourcing them to a third party often makes more sense in this case as it allows you to focus on your main operations like creating a better strategy for your advertising and marketing thus generating more revenues, which also ensures that your company’s growth is not restricted due to the additional spending on your non-cores or hiring of personnel.

• When Small Tasks Start To Become Time-Consuming

When is the best time to outsource? Maybe it’s when all the small tasks start to take up a lot of time. As your business grows bigger, you might not want to spend your time on those non-functional related tasks. Instead, the time you spent on those tasks can actually be more valuable if you reinvest them into your main operations. You can boost the company's emphasis on things that are regarded more critical by outsourcing less important jobs.

Furthermore, time-consuming and repetitive tasks are often the best ones to outsource. This ensures that the tasks can be performed quicker and through a more efficient way by experts in the related field, which often results in a much high quality output. Besides, by outsourcing to professionals, it frees up your team to focus on completing the tasks with higher priority, without having to stay in the queue - it’s a big win-win so why not!

Benefits of Outsourcing Your Accounting and Bookkeeping

• Cost-Saving

For some small businesses, having an accounting department to handle all the finances for the company might not sound realistic. But the truth is, outsourcing those functions can actually be very cost-effective compared to having a full-time accountant on the payroll since you only need to pay for the services!

• Save Your Time For Better Use

Although bookkeeping is vital, however spending too much time and effort in doing it might not be a favor for small business owners. The amount of money and time spent could be used far better in other areas of your business like marketing or operations to bring more revenue to the company. Thus, by outsourcing it allows you to focus on more productive tasks that contribute to the growth of your company.

• High Scalability

Scalability has always been a crucial aspect of any business. It is especially important for small firms because they have the most growth potential and need to get the most out of their resources. However, a sudden decline in revenues might sometimes compel you to lay off the full-time accountant in the house. In this case, outsourcing your accounting can be a good option where it allows better scalability (scale both up and down) with your business.

• Accounting Expertise

Many small business owners might find it difficult to manage their financial records by themselves. By outsourcing your accounting, it passes the jobs to an expert, someone who has knowledge in the field that can ensure that your finances are stayed organized. Without too many distractions, an outsourced partner can focus on keeping your company's financial data accurate and up-to-date, at the same time provides clear insights into the company's financial health.

• Better-Prepared For Tax Season

Tax season can be really stressful for some companies. But why make it hard when you can make it simple? Outsourcing your accounting and bookkeeping to a reliable partner helps to keep track of your company’s finances regularly thus simplifying the whole preparation process when it comes to the annual tax filing. Full tax compliance often removes the burden of unnecessary worry from your mind and most importantly it indicates that the company is performing well from the financial aspect, so why not?

• Avoid Employee Learning Curve

No one is perfect, that's why pencils have erasers - Wolfgang Riebe, this quote applies quite well in both the accounting and bookkeeping process too. As a business owner, always expect a certain margin of error when your newly hired in-house accountant is just about to get into work. Even a professional bookkeeper needs an adjustment period before the figures can be accurate, it takes time! However, outsourcing can provide a great solution to your company. It guarantees the maximum efficiency of work at the start without having to go through the learning curve by having an expert staff on your side who is trained to manage everything.

Summary

Outsourcing might not sound promising to you sometimes unless you find a good partner for the tasks and experience the benefits stated above. It may seem difficult to start at first, however, it can heavily impact what and how choices are made. 

The key to getting the most out of outsourcing is the communication between both parties. Always set a clear objective and job scope and make sure your outsourcing partner is well-informed about the expected quality of the output or any requirements that might need to be fulfilled while working on the tasks. 

Let them know what are you expecting and never hesitate to provide any descriptions or instructions about the tasks allocated to clarify any metrics to be achieved. Outsourcing should never be overwhelming or stressful, instead, it should help to ease the daily operations by providing a more effective alternative, contributing to the company’s growth - isn’t that right?