31
May 2022
Outsourcing accounting services are exclusive accountant tools that are used to withdraw non-core functions of full-time accountants from the third party. It helps expand the range of services and cut down ongoing accountant costs. It has been very popular among entrepreneurs to get competitive advantages and reduce financial risks. Companies with highly qualified professional accounting services can certainly expect better growth and development of their businesses.
Benefits of outsourcing accounting services
The main benefits of accountant outsourcing are:
1. Operational efficiency
Accounting outsourcing constitutes a well-structured mechanism consisting of highly qualified personnel: chief accountants, accountants, internal auditors, treasurer, etc. Thus, a well-established internal control in all areas of accounting eliminates errors and decreases the risk of additional charges for your business.
2. The absence of staffing constraints
The shift to outsourcing frees helps the business to get rid of total reliance on the FS chief accountant. The absence of one or more of the participants in the accounting process due to personal circumstances won’t be a problem anymore with outsourcing. You will get continuous accounting assistance without any inconvenience.
3. The accounting and reporting quality
This is perhaps the most important reason to trust outsourcing accounting services. However, only large and reliable outsourcing companies are able to provide top-class services. To ensure quality services, a company must have skilful and talented employees, proper allocation of responsibilities, automation of accounting processes, and even a proactive position regarding tax planning.
4. You pay, you get
The customer of an outsourcing company always clearly understands what service and in what volume he ordered, how much it costs, and what he will receive at the end.
5. Financial guarantees
Leading outsourcing companies insure their professional liability. The sums of insurance are calculated in tens of millions of dollars. Insurance is needed in case the client lost his money due to an outsourcer’s mistake (in the form of additional charges, fines, penalties, etc.). This is one of the key advantages of accounting outsourcing over a full-time accountant.
When you should consider outsourcing your account needs?
The target audience for which outsourcing accounting services are suitable can be legal businesses, companies, etc. that conduct real activities and submit legal reports.
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Startups
It is obvious that, at the very beginning of the activity and during the period of rapid development of the company, one must fully devote oneself to business. Accounting outsourcing makes it possible to dedicate oneself to debugging business processes without being wasting time on auxiliary functions. At the same time, startup owners can feel secure about the quality of accounting.
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Foreign business
In advanced countries, outsourcing of accounting is a common occurrence as its advantages for business are obvious and calculated. Therefore, foreigners are glad to entrust accounting to specialists in accounting functions. Moreover, while opening an affiliated company, it is easier for foreign entrepreneurs to entrust accounting, tax, and salary calculations to professionals than to immerse themselves in the intricacies of foreign legislation, accounting, and the specifics of business processes.
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Microenterprises and IE
Remote accounting for individual entrepreneurs and micro-firms is a fantastic solution since it will be difficult to find a multitask full-time accountant, rather it will be expensive to pay for his work. A remote third-party private accountant is not a good option either. These accountants typically serve hundreds of firms alone. It is definitely not worth expecting a qualitative result from them and protection from tax risks.
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Small and medium enterprises
Outsourced accounting support will optimize costs for such enterprises. You don’t have to maintain a bloated full-time accounting buro where some of the employees are underloaded while others suffer from overtime work.
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Holdings
For large and complex businesses, it is important to outsource accounting services to ensure proper management of the accounting desks. Thus, it becomes easy for companies to save costs on infrastructure and reduce transaction costs.
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Companies that conduct specific activities
It may happen that a company’s activities require specific knowledge of the intricacies of accounting and legislation. It is difficult and expensive to find a narrow specialist in the state. It is more profitable to find an accountant on outsourcing. Outsourcing companies always have narrow specialists with experience in supporting specific types of firms.
Things you look before outsourcing
1. Decide on the type of accounting services
The list of accounting services offered by market participants is not limited to tax and accounting. The provider can completely take over all the functions of a full-time accounting service, or it can serve only specific areas. In addition, ordinary accountants can be left in the company, and the management and control over their actions can be transferred to professionals. Lots of options. The larger the client and the outsourcer itself, the more different combinations of cooperation are implemented within the framework of accounting outsourcing. Before choosing an outsourcing firm, decide which type is preferable for your business.
2. Consulting
Any, even the most advanced chief accountant, from time to time needs professional advice. Especially, when you need to understand some narrow issue or clarify the specifics of processing specific transactions (for example, when exporting or importing). Often, company executives resort to consulting in order to control the work of regular accounting from the outside.
3. Accounting outsourcing of sites
Not all accounting can be outsourced, but only a part of accounting functions. This approach allows the CEO or owner to retain control over accounting processes, relieve employees from routine work and perform similar operations that do not require high qualifications, and also reduce the accounting staff.
4. Comprehensive accounting outsourcing
With the “complex”, the company completely abandons regular accounting, transfers the accounting database to the provider, and receives a full range of services: accounting, calculation of taxes and payments to employees, tax reporting and funds, preparation of payments in the client bank, processing, verification and storage of all primary documents. Also, outsourcing accounting can provide the client with related services: tax optimization projects, management training, implementation of electronic document management, and finalization of the accounting system. All these services are not included in the comprehensive package, so you will need to pay extra for them.
5. The provider performs the functions of the chief accountant
Sometimes the entrepreneurs decide to leave ordinary accountants on the staff as good performers and to transfer only the financial service management to accounting outsourcing. The outsourced chief accountant helps to correctly set up and formalize accounting processes. The choice of one or another type of accounting outsourcing depends on the specifics of the company, its finances, and the willingness of the management to release the financial “heart” of the company - accounting - from total tutelage.