You may have been running your own business for years, but you still need to take care of many things. One crucial element on the list should be managing finances and keeping track of all transactions in books called “books.” Below we have mentioned a list of important pros and cons you must keep in mind before choosing outsourced accounting services.
Why outsource Accounting Services?
Outsourcing Accounting Services is the perfect solution for any small or medium-sized business that wants to focus on growing its core competencies while letting go of mundane tasks.
The knowledgeable professionals will easily handle everything from bookkeeping up to complex consulting engagements. It provides valuable insight into how best decisions can be made based on information and peace of mind knowing there’s no need to worry about the tasks because someone else has handled it.
Outsourcing Accounting Services can provide you with:
- Back office support
- Customer billing and invoicing
- Filing and submitting taxes
- Running financial reports
- Paying your bills
- Payroll processing
- Bookkeeping and reconciliation
- Financial planning
- Industry-specific accounting tasks
Whether you are a startup or the CEO of an enterprise, outsourcing accounting services will help provide peace of mind that everything is in order and accurate.
Pros #1: More cost-effective
Hiring an outsourcing accounting service can be cheaper and more cost-effective than hiring in-house staff. For example, you don’t have any attributed overhead costs like Paid Time Off (PTO) or health insurance for your new employee, which could add up when considering how much money is spent on them alone versus outsourcing.
And suppose the company has multiple employees that are all qualified as well. In that case, there will never really come a time where one person isn’t enough because each individual brings something different into play, so it’s always helpful no matter what situation arises.
Cons #1: Hidden Costs
Scope creep when a task snowballs into multiple, additional costs you weren’t initially aware of (or forgot about). To avoid this from happening, make sure your month-to-month relationship is clear and expectations set at the beginning, so it minimizes the chance for scope confusion.
Pros #2: Being Proactive in business management
As CEO, you need to focus on your company’s long-term vision and growth. This is why it’s important for outsourcing accounting teams who can spot red flags before they become significant issues to make intelligent financial decisions confidently. This also brings peace of mind knowing how things are going financially, whether there be an issue or not.
Cons #2: Having Less Control over your activities
When you find outsourcing accounting services, there are some risks to consider. You can’t walk down the hall and ask about every financial event that takes place; instead, it’s important for communication in this relationship which will happen through weekly updates or monthly reports (depending).
Business owners might feel uncomfortable handing over control of their books because they don’t know exactly what each role entails. But starting with an onboarding process where everyone defines roles & policies ensures clear expectations from both parties in the future while also helping alleviate any anxiety around change.
Pros #3: More transparency
Fraud can happen when one person has access to and control of your company’s finances. That’s because it is easy to manipulate the books and have fake expenses go unnoticed for months or even years- so don’t blindly trust your employee! Multiple warning signs indicate fraud; often, these cases result from employees feeling financial pressure due to them not knowing what else they could do to save themselves from losing jobs altogether, which leaves businesses wide open if cheating occurs at any point during ownership.
When you outsource your accounting needs, not only do the numbers get checked more thoroughly than they would if left to one person; but with multiple pairs of eyes on these transactions and reports (both internal or external), fraud becomes less likely. We must always have robust controls in place since it can’t be ruled entirely possible 100%. Having someone explicitly dedicated to this role will help spot any anomalies before too much damage is done.
Cons #3: Not local personnel, even different time zones to manage
There are pros and cons to both in-house teams as well as outsourcing accounting firms. However, suppose you need your team members accessible for questions immediately. In that case, an external company will likely be able to answer them faster than someone on staff could respond internally due to time differences across the world or lack of contact details which may lead to wrong solutions. So knowing what’s better ahead should weigh heavily into the decision-making process before choosing one option over another.
An outsourcing relationship can become muddy without clearly establishing communication schedules and responsibilities. Take the time to discuss this with your outsourced provider from day one of their employment so that you have peace of mind as they work on projects for which you are paying them handsomely.
Innovature BPO’s team can help you manage your Accounting tasks
If you’re looking for a way to free up your time and energy so that you can focus on growing your business, outsourcing your accounting tasks may be the perfect solution.
At Innovature BPO, our team of experts provides excellent Finance and Accounting Services. We can take care of everything from bookkeeping and invoicing to tax preparation and financial reporting. We’ll work with you to develop a customized outsourcing solution that meets your specific needs and budget. Contact us today to learn more about how we can help you manage your accounting tasks.