Benefits of Outsourcing Bookkeeping
As the world of business is becoming more competitive
and everyone is striving for efficiency in their operation in terms of time and
money, the practice of Business Process Outsourcing (BPO) grows widely popular.
Companies are outsourcing their payrolls, distributions which will allow them
to reduce cost, tax liabilities as well as make a better use of their time by
focusing on more strategic aspects of the business. A large portion of this
outsourcing is of the accounting activities of an organization.
Popular with mostly small businesses and startups,
outsourced bookkeeping includes a bundle of services ranging from transaction
coding, voucher posting, accounts receivables, accounts payable, financial
reporting to management accounting and so on.
Outsourcing accounting activities like other BPO
services has financial benefits on both the short term (Income statement) and
long term (balance sheet) financials of a company. While you are definitely
saving on salary expenses every month by paying hourly fees on a pay per usage
basis instead of paying full time salary to employees, you are also saving
yourselves from long term liabilities of employee provident funds, gratuity
provisions & other fringe benefits. A smaller workforce also translates
into reduced utility expenses.
A large portion of small businesses find themselves to
be paying more tax than they are supposed to. Having the accounting services
from an accounting service would definitely allow them to
reduce their tax liabilities.
During the scaling up or expansion process of a
business, it is crucial that the management team is focused towards their goals
and implementing strategies that are aligned with their vision. With an
outsourced bookkeeping from an accounting firm, the management team would
require spending less time worrying about activities such as accounting &
transactions while also getting the financial advisory service on their
operations. This would allow them to take more informed decisions and achieve
their goals. A company who’s accounts payable and receivables are outsourced
would also save a significant amount of time by not having to deal with service
providers or financial institutions.
When you are employing an accountant or a team for
your business, most of the time it would involve training and orienting them to
your business. On the other hand, while availing an outsourced bookkeeping
service, you are appointing experts on the accounting field who are trained and
work dedicatedly on the concerned functions. The firms usually have a diverse
portfolio of clients from several industries. Which equips their accounting
team members with real life problem solving knowledge and experiences that will
surely benefit your operation at the time of need. They will be able to advise
based on their previous experience of dealing with similar situations.
& Decision Support System
Accounting firms that offer outsourced bookkeeping
services usually use accounting softwares such as quickbooks, sage & other
ERPs that eliminates the impreciseness of accounting through excel. This use of
technology also provides access to real-time information about company
financials and generates insights for the management team of the organization that
would support their decision making.
It is crucial for an organization to identify its high
and low performing units in order to increase efficiency and improve operation.
An outsourced management accounting is likely to provide more precise and
unbiased reports and observations regarding such performance ratings compared
to an inhouse management accounting team.
Business Process Outsourcing such as outsourcing
accounting services have allowed entrepreneurs and professionals to do what
they do best. Accountants get to provide accounting services to companies from
diverse industries, marketers get to provide marketing services to various
brands, logistics firms get to provide supply chain support to businesses while
entrepreneurs get to focus on scaling up and increasing profitability of their
Date: 2022-12-02 01:28:29, | (400 views)