Businesses are in constant pressure of reducing cost and improving performance. Reducing cost is setting a trend towards accounting and tax preparation outsource to third party providers to enable strategic change. This helps businesses to focus on core activities and help improve decision making.
A key consideration would be what accounting and tax preparation services to be outsourced. Accounting processes such as accounts payable, accounts receivables, cash management, billing etc. are the most popular to outsource accountants . Recently, there is a move to outsourcing higher value services such as statutory accounting, financial reporting and tax. Some businesses choose account outsourcing services to improve business performance.
What is Outsourcing accounting & bookkeeping?
Outsourcing refers to the use of external service providers that carry out the activities for your business.
Finance and Accounting Outsourcing refers to the outsourcing of one or more finance and accounting activities or processes. Outsource can be used to streamline unnecessary complex business processes, systems and structures.
Following are the benefits of outsourcing accounting and tax preparation services:
Outsource Accounting can deliver significant economies of scale by using technology and standardised processes. Suppliers can perform finance and administration functions cheaply and efficiently compared to the in-house accounting. Thus, companies can reduce their working capital, improve tax efficiency and avoid capital expenditure by outsourcing some of their finance and accounting functions.
Outsourcing Accounting can enable broad structural change. This creates strategic value while supporting corporate objectives.
Access to superior capabilities and expertise of the provider:
Businesses develop long term strategic relationships or partnership with their providers. They can benefit from best practice expertise, superior capabilities and new investment in resources that a specialist provider can bring to their business.
Focus on revenue generation:
Outsourcing firms help businesses save money and focus on revenue generation. And the question you will ask is how is it possible? Well, an account outsourcing services and bookkeeper is taking care of all accounting functions and businesses do not have to worry about any issues and thus save cost and time. If you are outsourcing accounting activities, there is no need to have in-house accountants this will automatically help save cost and is beneficial for small and mid-sized businesses.
More importance to the outsourced function:
An outsourced bookkeeper provides priority to its client. The top priority is the financial health of its clients. If this task is handled in-house, the attention can go secondary or on any other revenue generating process. Outsourcing companies make sure the financial information is up to date and in safe hands. Outsourcing allows businesses to focus on their core business objectives and thus they can grow and sustain in the market.
Latest technologies at lower costs:
Outsourcing companies are well equipped with expensive technologies that makes the task easier and efficient. Small businesses and mid-sized businesses cannot keep up with the evolving technology at all times. Outsourcing bookkeepers use the latest accounting softwares and solutions and that too at no extra cost. If individual companies have to purchase these softwares it can burn a hole in the pocket especially for small businesses. However, if you choose to outsource your services, the cost goes down significantly and you get acquainted to new technology with no extra or less money.
When you outsource, it becomes the responsibility of the service provider to ensure accounting activities are accurate and error free. There is no risk involved. Your data is secured with them. There is no fear of deadlines and system crashes as they provide information and help file taxes on time. If all this was handled in-house it could have become an expensive process as it may have involved errors.
Grow your business:
Outsourcing tax preparation and accounting services helps businesses to grow their business. Procuring new clients becomes easier when you outsource these services. You can get more time to focus on providing better value added services to your clients.
Outsourcing accounting and tax preparation can encourage businesses to focus on value creation and be more innovative and grow their business. Outsourcing accounting services will allow you to focus your time and energy on scaling your business instead of remaining stuck with time-consuming filing tax returns and handling accounting tasks.