The world of business is in its most effective state when professional accountants work with or throughout organizations. Their importance cannot be overly emphasized, as they often find themselves at the frontline of safeguarding the integrity of financial reporting. As mentioned in a Forbes article, finance and accounting was one of the first processes that companies outsourced. Driving efficiency is one of the highest priorities for CFOs who look to outsource accounting processes. The most commonly outsourced services within accounting are accounts payable, accounts receivable, and payroll accounting.
- Reduced Costs, Increased Profitability
When you require less staff time for internal accounting functions, you will be able to save employment costs such as salaries, benefits, payroll taxes, training, and recruitment expenses. With this considered, you should hire employees that will focus on your main purpose in business rather than auxiliary services. “Outsourcing your accounting operations allows you to concentrate your resources on the core business which allows for more profitability,” said Appletree Business Services LLC. More time will be open to spend with your customers, giving them a higher level of service. By having an outsourcing partner from whom you pick only the types of services you really need, you eliminate unneeded overhead expenses in those areas. It is important for a business to concentrate on the return of every dollar they spend and be prepared to deploy resources toward maximized leverage.
- Minimized Risk
Reporting errors can be a costly process. There are astounding penalties and interest charges for income and payroll tax mistakes. Then there are litigation expenses and judgments levied against an organization, serious consequences that can quickly put it out of business. Trusting trained professionals with the responsibility for business expenses greatly minimizes the risk of losses to your organization.
- Collaboration is Better
Having a team of professional accountants managing your books is better than having an in-house accountant on staff keeping them. This also gives you the ability to separate your departments from each other. With just one in-house accountant, it’s far too difficult to hold spending and departmental purchasing individually accountable. This unfortunately opens cracks for services to fall through. Whether it’s you, a full-time staff member who takes on the accountant role, or a part-time accountant, the accounting necessities are not getting the proper attention they require. There are plenty of exemptions and loopholes out there, and having just one accountant on hand will not be enough to find them all for you. When you outsource your accounting operations, you afford yourself a team of competent people, all prepared and double-checking each other that the right findings are made. A team of accountants means sufficient manpower for separation of all the departments and really getting down to the core and nitty-gritty of each sector. This allows for more ways to be found to keep your money.
Simplifying and standardizing finance and accounting processes is an essential characteristic of well-run companies. Instilling good processes of this sort allows companies to achieve various good outcomes. These outcomes include more service, more information, and more cash. Some may have concerns that outsourcing creates a compromise in control, as a report by the Association of Chartered Certified Accountants (ACCA) found. As these companies using financial & accounting outsourcing realize the cost advantages, they also notice a rise in quality because benchmarks are applied to performance. The report concluded that in the end, companies could see control was also improving. Many companies don’t realize that they manage an outsourced provider of services more stringently than in-house staff. Outcomes are more likely to use clear metrics, such as achievement and savings. This allows a company to have continuous improvement in accounting while the company itself focuses attention and resources on core competencies.