Unlocking Accounting Efficiency: A Comprehensive Guide To Outsourcing Accounting Functions
Ever found yourself spending more time than you want reconciling accounts and preparing financial summaries? Yes, you may have had online financial training and can do accounting yourself, but you’re too busy running your business. In truth, you need accounting staff.
Unfortunately, you’ve already looked into it, and it’s prohibitively expensive. In this case, you should consider the alternative to employing in-house accountants. Work with a business process outsourcing company offshore and get yourself a dedicated but outsourced accounting team.
Small and medium-sized enterprises that may not have the funds to set up an entire accounting division in-house can benefit greatly from accounting outsourcing. Doing so allows you to take care of your accounting functions properly, accurately and promptly without spending an astronomical sum on salaries, and expanding and equipping your office to accommodate more employees.
Benefits of Outsourcing Accounting Functions
In the fast-paced world of business, efficient and cost-effective processes are vital to growth and profitability. This is why business process improvement, business process re-engineering andenterprise resource planning have become such popular catchphrases.
Outsourcing accounting functions is not a mere trend. It’s a strategic move that offers immense benefits.
1. Time Savings
Delegate tedious accounting tasks to accounting staff with the knowledge, training and expertise to do the job. This accomplishes three things:
- It frees you and your core employees from the tedium of doing something you’re not good at.
- It gives you and your core employees the freedom to focus on core business activities.
- It ensures your accounting tasks are handled correctly and promptly.
Having the time to focus on core, revenue-generating processes means more revenue. Prompt financial data entry, summaries and reports also give you the requisite information when making critical business decisions.
In short, accounting outsourcing will save you time you can use to focus on and be strategic about your growth.
2. Cost Effective
Accounting staff salaries in offshore locations are a fraction of accounting staff salaries onshore. Therefore, outsourcing to the Philippines or some other popular offshoring destination will help you save a considerable amount in employee salaries.
Outsourcing also allows you to shift some fixed costs into the variable costs basket.
If you hire accounting staff in-house, you may need to expand your offices, invest in software, buy more equipment, and spend more on office consumables (paper, ink, coffee, juice, pantry stocks) because of the additional people in your office.
In contrast, if you outsource your accounting functions through an offshore BPO, you can get flexible terms that let you pay the outsourcing vendor based on output or productivity. That’s a variable cost instead of a fixed cost.
Even if you opt for a fixed number of outsourced staff, you still won’t have to invest in equipment, real estate and infrastructure to accommodate an entire accounting team.
Outsourcing offers flexibility in choosing services that fit your budget, without sacrificing quality. Additionally, it can reduce your fixed-costs burden while ensuring you get necessary accounting tasks done.
3. Capability Building
Access accounting professionals with specialized skills. Do you need a Certified Public Accountant or an Association of Chartered Certified Accountants (ACCA course) charterholder? Perhaps you require an expert in any of the following industry verticals:
- Financial accounting
- Managerial accounting
- Cost accounting
- Forensic accounting
- Tax accounting
You just need to let your outsourcing vendor know your particular requirements, and it’ll take care of sourcing and screening qualified personnel to fill your accounting roles.
4. Compliance and Accuracy
Avoid costly mistakes and non-compliance issues. Outsourced professionals ensure adherence to laws and regulations, keeping you on the right side of the law.
5. Scalability
Scale services according to your business needs. Outsourcing allows you to adapt quickly to changes without the burden of restructuring an in-house team.
Accounting Tasks You Can Outsource to an Offshore Accounting Team
What tasks can you outsource to an accounting outsourcing services provider?
1. Accounts Receivable and Payable
Accounts receivable and payable functions are the backbone of your cash flow. Outsourcing them ensures precision and timely execution.
- Accounts receivable: Outsourcing tasks like handling invoices, payment tracking and overdue accounts follow-up minimizes delays in revenue collection and improves your company's relationships with customers.
- Accounts payable: Your accounts payable staffmanages supplier invoices, schedules payments and maintains vendor relations, helping you secure vendor trust and take advantage of early-payment discounts.
2. Expenses Review and Processing
Ensuring accuracy in expense tracking and reporting requires attention to detail.
- Reviewing staff expense claims: This functionreduces the likelihood of inflated or fraudulent claims, helping you preserve your bottom line.
- Verifying and categorizing expenses: Proper categorization helps in budgeting and forecasting, ensuring expenditures align with financial goals.
- Accounting system integration: Integrating expenses into an accounting system ensures all costs are recorded accurately, promoting transparency in financial reporting.
3. Financial Reports Analysis
Financial reports are vital to decision-making. For instance, a manufacturing company might need to analyze production costs to identify cost-cutting opportunities that won’t sacrifice output quality.
Financial reports are also often required for business registration renewal.
- Monthly, quarterly, or annual financial report analysis: In-depth analysis guides strategic planning and uncovers areas for potential improvement.
- Insights and forecasts: Expert analyses using established models offer valuable insights into trends, aiding in proactive decision-making and long-term planning.
4. Client Billing
Streamlining invoicing can enhance client relationships.
- Creating and sending invoices: Timely and accurate invoicing establishes a pattern, enhances your company's professional image and, most importantly, ensures consistent revenue streams.
- Handling client queries and concerns: The responsive handling of billing inquiries enhances client satisfaction and helps to prevent misunderstandings.
- Providing detailed billing reports: Regular reporting allows you to monitor outstanding balances and determine the effectiveness of your collection strategies.
5. Assistance With End-of-Month Processes
The end of the month is a particularly stressful time for enterprises. Make it stress-free with proper accounting support.
- Reconciliation of bank statements: Regular reconciliation prevents discrepancies and fraud, maintaining the integrity of financial statements.
- Closing accounts: Accurate account closing ensures that the financial picture reflects the true state of the business, helping you make strategic decisions.
- Preparing financial summaries: Summaries provide a snapshot of the business's financial health, facilitating easier evaluation and planning.
6. Maintaining Account, Customer and Vendor Records
Meticulous record-keeping is vital for transparency and compliance.
- Regular updating and maintenance of records: Financial transactions are enteredpromptly. Such timely updates ensure that financial information is always current.
- Ensuring data accuracy and compliance: Accurate record-keeping facilitates regulatory compliance and builds confidence among stakeholders.
Outsource for Efficiency, Unlock Productivity and Profitability
Outsourcing accounting functions will save you time and money. It’s also a strategy that will enhance your efficiency, improve accuracy, and allow you to leverage professional expertise tailored to your needs.
In short, outsourcing your accounting functions may be the key to unlocking the next level of success for your business.
