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.

Cost Efficiency

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.

Time Efficiency

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.

Expertise

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.


Automation & 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.

Neutral Performance Measurement

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 business. 

Date: 2023-06-04 16:36:14, | (599 views)

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