Every company requires accounting and bookkeeping services so that it can the existence and development of the company is ensured. But the time at which a company should avail such services is a very subjective matter. The time at which such services should be availed can be different for different businesses. It is the duty of the management to understand the needs and requirements of the business and avail the necessary services accordingly.
Accounting and Bookkeeping are two such services that are very much necessary for the management to conduct. Many people consider Bookkeeping and Accounting as the same services but this is not the truth. Bookkeeping is a part of the accounting service and it comprises of recording of all the transactions that have been conducted by a business.
On the other hand, Accounting is the recording, summarizing, analysing and presenting the financial data of the business. Bookkeeping is a very vital part of the accounting process and it is not possible for an accountant to conduct the Accounting service without gathering the proper transactional details.
Reasons for a business to outsource its Accounting and Bookkeeping Services
It is the duty of the management to understand the requirements of the business and decide when it should opt to outsource the Accounting and Bookkeeping services of the company. Some of the reasons to outsource the accounting and bookkeeping services are:
- Accounting and Bookkeeping is taking a lot of time of the company
Accounting and Bookkeeping is a time-intensive process. In order to get the correct details and to analyse such details, a lot of time is required. Sometimes this can lead a company to spend a lot more time than estimated in such accounting processes. In such a situation the management of the company should outsource the accounting features of the business to a third party.
- The in-house accounting team does not have the expertise
The business environment is very dynamic and keeps on changing. With so many changes the accounting field also has to keep track and there are constantly new amendments or changes in how technology is used to process it. Many a time there are cases in which the in house accounting department does not possess the expertise of providing the solution to an accounting problem. At such time it will be feasible for the management to outsource the accounting services.
- It is becoming expensive to keep up with the in-house accounting department
In house accounting department required constant training and also requires various software to understand the complete process of accounting in the company. The accounting department also required monthly salaries and if anything changes in the business environment then it also needs to update itself. This can cost a lot to the company and in such situations, it is better to outsource the accounting services.
- There are increased chances of fraud in the company
As the in-house accounting department has a lot to lose if there is even a small mistake made, there are chances that once the error is found out the accounting department will try its best to hide the error. This fraud can affect businesses in a big way and can even lead to the downfall of a business. To get accurate details about the transactions of the company, the management should outsource the accounting services of a company.
- Provides expert solutions to the problems of the company
The in-house accounting department may not know the answers to all the questions. They may not possess the skills or may not be updated with the latest proceedings. A firm to which the accounting is outsourced will understand the requirement of the company and will provide the accounting solution to the management accordingly.
These are five situations in which a business must outsource its Accounting and bookkeeping functions to a third party. With so many benefits it is better to outsource these services so that the management is better able to focus on the core competencies of the business.
If you are looking to outsource the Accounting Services and Bookkeeping Services in the UAE, then do have a look at the services provided by JAXA Chartered Accountants. JAXA also provides many other services such as Auditing services, VAT and TAX related services, payroll services and many more. For more details about the services provided, feel free to contact our experts. We will be glad to assist you.