Outsourced Accounting: Exploring the Concept

August 26, 2020
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For every business owner across the world, it is imperative to learn and understand Outsourced accounting. The concept might be a little daunting if not followed properly. This article is created to reduce the mystery around it.

Firstly, it is better to accept that many people face a hard time understanding accounting. It is not expected from any business owner to have a stronghold over accounting. But knowing the basics is never harmful.

What is Outsourcing?

The term ‘Outsourcing’ means paying a service provider who is not from your company, to perform business tasks. So, you will have complete freedom over the services you want them to provide for you. The fees for each service can be fixed or can fluctuate. This can be considered as a positive thing in outsourcing. The most common is finance and accounting outsourcing.

Outsourcing Accounting

Account outsourcing firms can offer you a long list of services. Some of which includes:

  • Processing payroll of employees
  • Bookkeeping
  • Balancing ledgers
  • Drafting financial statements etc.
When to choose Outsourced Accounting?

Now, you must be asking yourself, ‘When should a business opt for Outsourced accounting?’ For general business, here are a few situations when it is wise to choose outsourced accounting:

  • When a business reaches a revenue of 1 crore or more
  • The number of employees is more than eight people.
  • When the business is accepting capital from investors
  • If there is a requirement of sophisticated and to the point financial reports for making data-based decisions.
  • The CEO of the business do not have the time to look into every aspect of the business.

But for a non-profit organization, the triggers might be a little different. This is because the business is working towards a charitable cause.

  • If the revenue reaches Rs. 50,00,000.
  • The organizations' fund comes from ROI, so books need to be presented in front of them.
  • In these organizations, the accrual basis of accounting is needed.
  • Foundation reporting requires grants.

Sometimes, it is seen that owners of such businesses view outsourcing as an advantage. They think it will help them stand out from the crowd without investing money or time. Many even consider it as an asset for their business.

Every business needs financial and management reports, no matter how small or big it is. Real-time data and key performance indicators can be extremely crucial. Efficiently maintained books can make or break a business.

Read Also: CA firm vs accounting outsourcing firms

 

Why should one choose Outsourced Accounting?
  • Undivided attention to the business

Bookkeeping and accounting can be time-consuming work. So, outsourcing these services can save employees and owners from getting distracted. And there will be plenty of time to keep the focus on driving sales and services. This might ultimately result in increasing profit.

  • Escaping the In-house burden

Recruiting of any new employee needs a lot of effort. Much of this effort is wasted towards training and preparing him or her for doing the job efficiently. Also, the management of all these employees is a hard task.

By opting for Account Outsourcing firms, a team of professionals will be available to you. The dedicated and efficient team gets the entire accounting job done in no time. 

  • Opinion from experts

The professionals that will offer you with outsourcing services are generally well trained. They are experts in accounting and business technology. These experts can help you with any doubts and bits of advices.

  • Increased Operational Efficiencies

The outsourcing services firms are very technologically advanced. So, they acquire greater financial reporting capabilities. You will be able to get all the knowledge on improving cash flow to your business in no time. They prepare reports that take less time and have very low errors.

  • Helps you to make efficient decisions

Outsourcing will enable you to become financially intelligent and help you make the right decisions. All the questions that one might have with the finances of their business will be answered. A traditional bookkeeper can never efficiently answer such questions in detail. These firms will only focus on the profitability of the business and will answer the questions accordingly.

Conclusion

Countless companies rely completely on outsourcing accounting firms for a long time. In this way, they have saved a lot of money as well as time. Hopefully, the article was helpful to you. And has helped you show all the positives of outsourcing accounting. For more details or any query, reach us at  hgoyal@especia.co.in or 9310165114.

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