Accounting outsourcing: Why is it important for your business growth?
As a business owner, you know that there are certain aspects of your company that you have to handle yourself. But what about accounting? That's a task that can easily be outsourced to a professional, which is why it is important for your business growth.
Outsourcing your accounting allows you to focus on what you're good at - running your business. By leaving accounting to an expert, you know everything is being handled correctly and on time. This gives you peace of mind and more time to concentrate on growing your company.
Not only will outsourcing your accounting help relieve some of the stress related to this task, but it can also save you money in the long run. A professional accountant will be able to keep track of your finances and find ways to save you money on taxes.
Therefore, if you're looking for a way to take some weight off your shoulders and grow your business, outsourcing your accounting is definitely the way to go!
When a company outsources its accounting, it is hiring a third party to take charge of some or all aspects related to finances.
Many businesses choose to outsource their accounting in order to cut costs and become more efficient.
You may have your financial information at the touch of a button if you use outsourced accounting.
Outsourcing accounting services will eliminate the time you spend on paperwork by providing automation.
Outsourcing your accounting needs to reduce the risk of fraudulent activity from employees within the accounts department.
What is accounting outsourcing?
Accounting outsourcing is the act of hiring a third-party company to do your bookkeeping, financial reporting, payroll processing, managing your superannulation obligation and taking care of your tax matters.
Outsourcing has been on an upward trend over recent years. This trend allows organizations to focus more time and money on their core business activities without worrying about finance management or payroll processing.
As a business owner, you get peace of mind knowing that all your organization's earnings estimates are based on accurate reports submitted by properly trained individuals. This means that you'll never have to worry about significant financial discrepancies or errors.
How can small businesses in Australia start with accounting outsourcing?
Accounting Outsourcing has been around for a long time, but it was only available to large companies with in-house staff.
In recent years, the advancement of cloud-based accounting softwares and increasing familiarity with remote workers made this service accessible even for smaller businesses.
The question is how can a small business start with outsourcing solutions for their finance function? The answer lies in taking a few baby steps and not outsourcing the entire accounting function at once.
The first step is to assess what internal resources are available and which ones can be outsourced. A business might want to outsource its bookkeeping along with accounts payable and receivables, but they may still want to keep their payroll process in-house.
The next step is to find a reputable outsourced accountant. Once you've found a company that you're comfortable with, you can start outsourcing more of your accounting tasks.
Outsourcing your accounting is a great way to free up time so you can focus on growing your business. It's also an excellent way to reduce costs and improve efficiency.
As discussed above, accounting outsourcing is beneficial for businesses of all sizes and especially for the following scenarios:
- Companies that are struggling to hire a suitable and affordable full-time accountant.
- Companies that require flexibility with fluctuating workloads.
- Not-For-Profits & charitable organisations who are struggling to find experienced finance professionals.
- Business owners who need only temporary help on an ad hoc basis.
How does outsourcing accounting help small businesses
What if you could cut your accounting staff overhead by up to 50%? Imagine the money left over in monthly savings because of outsourcing your accounting services. Resources saved this way can be channelized for business growth.
There are five different ways your company can benefit from using accounting outsourcing:
No recruitment hassles
The best way to manage your accounting function and save time on the recruitment process is by finding the right outsourcing solution that works for your business.
The time and money you save through accounting outsourcing can be invested in other important aspects of your company.
Expertise and competence
You're not just getting an accountant's services; you are hiring professionals with years of experience and knowledge.
An experienced and qualified tax accountant will always be updated with the latest changes in tax laws, which can save your business a lot of money.
Saves your time
Outsourcing tasks like payroll, bookkeeping and accounting is a great way to focus your time, energy, or resources on scaling business growth and revenues.
Furthermore, outsourcing gives you enough time to build relationships with customers who could be your potential clients for future work projects.
Helps with achieving your strategic plan
A big benefit of outsourcing is that you can focus on the "bigger picture" and develop a strategic plan for your business.
Your strategic plan will outline long-term goals and objectives, which are essential for the growth and development of any company.
Some strategic aspects you can focus on by outsourcing are: (a) increasing your customer base; (b) developing new products or services; (c) expanding into new markets.
Provides a fresh perspective to your finance
When you outsource your accounting and bookkeeping, you're not just getting an expert's help; you're also getting a fresh perspective on your finances.
This is especially beneficial if you've been managing your own books for a long time. An outsider's perspective can help identify areas where you can save money or make improvements.
Setting up a successful business needs a lot of planning and requires many aspects considered
Download our crucial e-guide on essentials for setting up a successful business.Download
Things to consider before outsourcing your accounting outsourcing and bookkeeping services
Now that you know the benefits of outsourcing your accounting, it's time to learn about the things you need to consider before making the decision.
Outsourcing is a big decision for any business, and it's important to understand the risks and potential problems that could arise. Here are some things to keep in mind:
- Know your business needs and goals.
- Be ready to maintain a long-term relationship with your outsourced accountants
- Ensure to know everything included in each specific aspect of your deal with an outside party. Else, it could cost you more than required.
- The most important factor to consider is how you plan to communicate with the outsourced accountants. This will allow efficient working relationships that lead directly toward successful projects.
- To avoid security failures, it is important to choose the external accounting firm that meets all basic measures that are utmost required to keep your business data secured.
Common mistakes people make when outsourcing accounting tasks and ways to avoid them.
Do people make mistakes when outsourcing accounting tasks? The list is endless. Here are three common mistakes people often make when outsourcing their finance function and how those mistakes can be avoided.
Finding cheaper accounting firm
There are many ways of making outsourcing mistakes. One of the worst is choosing a provider based solely on price.
This step could lead you to hire an inexperienced accounting firm who will not only charge more in overtime, but also cause disruption to your business's operations due to apathetic work ethic and low-quality performance.
You should always do some research before cutting any deals. Selecting the outsourcing partner just because they're cheaper is not a reliable solution.
Instead, always try to find an outsourced accountant that offers complete 360-degree services and keeps your books in good shape.
They may not have enough expertise
When it comes to your business, you need an expert's advice. This is where most business owners make a mistake – they try to outsource their accounting to someone who is not an expert in the field. For example, you wouldn't want to hire a real estate agent to do your taxes. The same goes for outsourcing your accounting.
You need to make sure that the person you're hiring has the necessary expertise and experience to do the job right. Otherwise, you could end up with inaccurate financial reports or even worse, an ATO audit. The best way to avoid this mistake is to do your homework and vet the accounting firm before making a decision.
Trusting words and not actions
When you're outsourcing your accounting, it's important to trust the outsourced accounting firm. However, this doesn't mean that you should blindly trust their word.
There have been many instances where business owners have outsourced their accounting only to find out later that the service provider wasn't doing what they said they would. This is why it's important to get everything in writing.
Make sure that you have a clear understanding of the services that will be provided and what is included in the price. This way, there are no surprises down the road. If you can avoid these mistakes, then you'll be well on your way to a successful outsourcing experience
To know more, read our blog on How to hire the right online bookkeeper for your business.
How much does it cost to outsource your accounting?
The cost of outsourcing your accounting will depend on the services you require and the size of your business. Generally, the larger your business is, the more expensive it will be to outsource your accounting.
The best way to get an accurate estimate of the cost is to request quotes from multiple accounting service providers. This will allow you to compare pricing and find the provider that best fits your budget.
When you're considering the cost of outsourcing your accounting, it's important to remember that you're not just paying for the services themselves. You're also paying for the peace of mind that comes with knowing your books are in good hands.
In the end, the cost of outsourcing your accounting is an investment that will pay off by freeing up your time to focus on running your business and growing your bottom line.
What factors impact the price of accounting outsourcing?
There are a few factors that can impact the price of accounting outsourcing, such as:
- The size of your business: The larger your business is, the more complicated your financial situation will be. This means that it will take more time to complete your books and prepare your taxes. As a result, you can expect to pay more for accounting outsourcing if you have a large business.
- The services you require: The specific services you require will also impact the price. For example, if you need help with bookkeeping, you can expect to pay less than if you need full-service accounting.
- The experience of the provider: The level of experience of the accounting service provider will also play a role in the price. Generally, more experienced providers will charge more for their services. The location of the provider:
- The location of the provider: can also impact the price. If you're outsourcing your accounting to a provider in a different country, you may have to pay more or may be less for their services.
Are any risks associated with accounting outsourcing, and how can they be mitigated?
It is important for companies who search for outsourcing solutions to do their research first. There are a few risks associated with accounting outsourcing, such as:
- The quality of the work: One of the biggest risks is that the quality of the work may not meet your standards. This is why it's important to do your research and only work with accounting service providers who have a good reputation.
- The security of your data: Another risk is that your sensitive financial data could be compromised. This is why you should only work with providers who have strong security measures in place to protect your data.
- The cost: The cost of outsourcing your accounting can also be a risk if you're not careful. As mentioned before, it's important to get everything in writing and to understand what's included in the price. This way, you can avoid any surprises down the road.
By doing your research and being aware of the risks, you can minimize the chances of having a negative experience with accounting outsourcing.
If you are still on the fence about outsourcing your accounting needs, consider the many benefits it can offer your business.
From accessing expert advice to improving business productivity and meeting compliance requirements, outsourcing can be a great decision for any organization.
Also, know how we can help take the stress off your shoulders so you can focus on what you do best – Business Performance!