Every business needs to solve the issue of accounting, and there are three approaches to this subject matter. These are:
- Handle your accounting on your own.
- Keep an accountant on a retainer.
- Outsource your accounting
While every single one of these methods has something to contribute, it’s important to understand why the third option seems to offer the most value.
Handling your own accounting is risky, takes too much time, and distracts you from your regular duties. As far as having an in-house accountant goes, this is a double-edged blade. It depends on your hiring process, your patience, and your luck.
In the end, it seems like outsourcing accounting and virtual bookkeeping is your safest bet. Here are five reasons why.
Lower Cost of Accounting Processes
There are a lot of ways to save money on your accounting by outsourcing and using cloud-based tools for your bookkeeping. First of all, having qualified accounting help is great for helping you avoid fees and penalties. It ensures that you claim every deduction that you’re due and get the most out of your region’s tax policies.
While it goes without saying that virtual bookkeeping is the way of the future, the choice of the right accounting platform is not easy to make. Moreover, each platform has different tiers (plans), and it’s sometimes not an easy task to pick a suitable one for you. By outsourcing, the company in question already has the right digital tools. This gives you one less thing to worry about.
As you grow your business, this model keeps up with scalability. It’s not liked a small enterprise can benefit more from having an accounting team on their side. As your business grows, your needs for accounting services expand, as well. The flexibility of outsourcing makes the difference.
Doing things on time will not only save money but also keep you out of legal trouble. Your organization’s financial responsibility is not to be taken lightly.
Skipping Hiring Process
Hiring the right people for the job is an incredibly costly and demanding process. It requires a lot of time to review all the CVs, conduct testing, interviews, etc. It’s a massive project that will preoccupy a huge portion of your management for weeks.
By outsourcing, you’re allowing someone else to handle this in your stead. Sure, you still get to choose the outsourcing company, but this is nowhere as difficult or time-consuming as the actual hiring process. Moreover, unless you have a background in accounting or actually have an accountant in your employ, it’s possible that you lack what it takes to recognize the right talent.
The biggest advantage is that you get to hire experts right off the bat. While you could, technically, hire experts for your in-house team, the cost of this would be astronomical. Even then, you would also have to invest a considerable effort in the onboarding process.
The end result can be the same, providing that you can actually hire the right team and organize everything. The difference stems from the fact that, with outsourcing, you get to the end result far quicker and with lower investments.
Saving Time and Real-time Tracking
Automating your accounting is one of the best ways to save time on it. It facilitates tasks, reduces risks (of omission), and ensures that all your books are in order at any given moment. This is also important when it comes to the oversight of your company’s financial reliability.
One more thing you should understand is that automation minimizes the risk of human error. Sure, the likelihood that someone, somewhere, made a mistake will always exist, but the majority of platforms have parameters that will make these mistakes stand out. This means that it will be easier to notice them and make things right. This is especially true with outsourcing (in the hands of the right team).
Being able to track your spending in real-time gives you incredible responsiveness. It also improves your diagnostics and improves your chances of noticing employee theft early on. Sure, trusting your employees with corporate funds is great but verifying is often an even better move.
Outsourcing saves time on its own. You don’t have to personally tend to something if you delegate someone else to handle it. With so much on your plate, finding a way to have fewer administrative tasks is always a good thing.
Financial Advisor
One of the roles of an accountant is to offer advice on your money-spending, investments, etc. When looking for an advisor, you’re looking for more than just credentials. What you really want is someone with experience. Specialized accounting agencies usually work on a myriad of projects at the same time, some of which are closely tied to your own industry.
The most important role of an accountant is to provide suggestions on how you can cut down your expenses. With virtual bookkeeping, they’ll have a far more accurate account of your spending than their analog counterparts ever could. Therefore, their words carry more weight than ever before.
In a virtual workspace, this type of arrangement is even more efficient. First of all, virtual bookkeeping allows for a simpler sharing of files (or access to the same files, to be more precise). This means that online cooperation and problem-solving methods tend to be quite effective.
Keep in mind, nonetheless, that an accountant may provide you with financial advice, but they’re not a business coach or a business advisor. The calls are still your own.
Fewer Employee Management Problems
Investing in outsourced accounting allows you to assume a more hands-off approach. You avoid the pitfall of attempting to micromanage anything, and you get a chance to focus on your core tasks. Not only that, but people handling your accounting (directly handling it) are not your direct subordinates. This means that, even if you do get the urge to micromanage, it just won’t work.
Second, you avoid hiring more employees to keep on the retinue. This means that you pay a flat fee to the agency in question instead of having to further complicate your payroll system. Working hours, different wage rates, and more are just some of the issues that you’re currently dealing with.
We’ve already mentioned that hiring accountants are difficult. Therefore, think about what kind of a problem a resignation would cause. Now, resignations will not affect you as much. If ranks of the accounting department are to be filled, this is someone else’s job. If they’re short-handed at the moment, this too is not your responsibility.
The bottom line is that you always get a full team staff instead of an individual accountant. Even if there are not multiple people on your case all the time, if the need arises, a specialist can be assigned in no time.
In Conclusion
In the end, outsourcing and digitalization are the way forward. However, you need to find the right partners. Outsourcing is an abstract concept that is neither good nor bad. It depends on your budget, your partners, and your expectations. Still, there are a lot of great reasons why accounting is one of the most commonly outsourced functions in today’s business world. These five reasons we listed are merely the tip of the iceberg.
