The Benefits of Outsourcing Your Accounting Needs Key Takeaways
Hiring firms to perform your non-core business activities is called business process outsourcing. Accounting outsourcing can help you with better expertise, low-risk fraud, and cost-effectiveness. Countries like India, Sri Lanka, Vietnam, etc. have lots of outsourcing firms. Managing accounts of your business is not an easy task. Moreover, having an in-house account department can be a much more expensive operation. Therefore, as a cheaper alternative, you can go with outsourcing your company’s accounting needs.
However, even the brightest star casts a shadow. Similarly, outsourcing accounts also has its potential cons that can hinder business operations. On this note, refer to this write-up till the end to find out if outsourcing is your thing or not.
What is Outsourced Accounting? Outsourcing is when you hire other firms or enterprises to perform non-core business operations of your firm. For instance, being an IT development firm, handling customer queries is your non-core business operation. Therefore, you hire BPOs or third-party business enterprises who are experts in establishing relations with consumers and solving their queries.
Similarly, outsourcing accounting means that you are hiring some other firm to handle your accounts because it is not the core activity of your business. You can look out for numerous Nottingham-based accountants on the internet and read their reviews if you want to avail their service.
What are the Benefits of Outsourcing Accounting? Since hiring companies to manage accounts is so popular, there must be some reasons behind its popularity. Here are some benefits that make it a much more feasible option than recruiting an in-house team:
Cost Effective: For the cost incurred in hiring these services, outsourcing has proved to be a far better option. You have to pay a fixed amount for a particular time period, under which all your accounts are managed by experts. And, you do not have to pay employees salaries, unlike the in-house accounting department.Expertise: Accounting firms hire only the best talents who are expert in their own fields. Therefore, you do not have to worry about their effectiveness and efficiency as your accounts are in safe hands.Scalability & Flexibility: The workforce involved in managing your account is flexible only if you outsource it. Depending on your scale of operations, an outsourced accounting firm can expand or contract the number of accountants for your firm.Low Risk of Internal Frauds: Handling an accounting department is not everybody’s cup of tea. According to statistics, the major reason for accounting fraud is the lack of internal controls. In the case of outsourcing, since you are paying for their services, they rely on providing impeccable quality.Increase Business Efficiency: Since all the accounts are managed by another firm, the workforce in your company will now have more time to spend on their responsibilities. This is how they can focus on providing better quality with less brainstorming.Financial Advice: To some extent, you can enjoy some free financial advice for your firm as accountants working on your accounts are well-known facts, about what you are doing wrong with your funds. You can gain insight on several topics such as company budget , expenditure, investments, etc.Are There Any Drawbacks of Accounts Outsourcing? As mentioned in the intro, outsourcing accounts has its own disadvantages that you have to bear with. However, they are not dealbreakers, but it is still necessary to know about them:
Communication Gap: Being an outsourced firm, you cannot contact directly with those who are responsible for managing your accounts. Moreover, the meetings are usually conducted virtually, which also results in a communication gap.Limited Visibility: In terms of day-to-day operations, you do not get a clear picture of how your funds are performing. This is why getting a crystal clear picture might be a problem when you outsource accounting service.Data Security Concerns: Your financial information is one of the most secretive information that must remain confidential. If you end up with a shady accounting service, it can all fall into the risk of data leak.If you are looking forward to outsourcing, here are some most popular countries that are a firm’s first choice:
Philippines India Brazil China Sri Lanka Vietnam Mexico Final Words If accounting is one of your non-core business operations, you can outsource it to numerous firms that are always available to help you. South-Asian countries like India, Sri Lanka, Vietnam, the Philippines, Mexico, China, etc. have tons of such companies that can manage your accounts in exchange for the money they charge.
