October 03, 2020
For any business, financial management is arguably one of the most important responsibilities that will impact your future success. If your accounting is not accurate then you could be facing cash flow problems that eventually may lead to business losses. Unfortunately, too many business owners are carrying so many responsibilities that they can’t keep up with the financial requirements of running the company. One option that you might consider is to look for an outsourced accounting services firm.
An accountancy outsourcing service provider provides a full, accounting department like experience for businesses. It handles the day-to-day transaction and provides services such as accounts payable, accounts receivable, payroll, financial reporting and many other services. Accounting outsourcing firms have a full complement of accounting professionals allowing them to offer a small team of accountants at a lower cost as compared to hiring a full time, in-house employees.
In today’s challenging business environment, an increasing number of businesses are outsourcing their work to outsourced accounting firms as they help in reducing operational costs, create time for innovation, drive up profits and ensure a better work-life balance for the business owners. Over time, various kinds of myths and misconceptions have also surrounded outsourced accounting services. Consequently, companies feel hesitant in doing so. To clear some of the misconceptions and debunk some of the most common myths about outsourced accounting, we will dissect each in this post.
Myth 1: Sending financial details to an outsourced accounting firm is not secure for the organization.
Since the service deals with sensitive information, most companies wonder about the safety of handing over their financial information.
Hence, outsourced accounting firms take extra measures to ensure the safety and security of all documents. For instance, they allow you to share files using certain encryption methods.
Besides that, they conduct regular audits of all the files they possess to ensure there was no breach. Outsourced accounting firms understand the sensitive nature of their work so they have even more security procedures that the company itself implements. They go above and beyond to follow security and quality standards and industry codes along with maintaining strict non-disclosure agreements or NDAs.
Myth 2: Accounting outsourcing is expensive and only large businesses can afford them.
While the second of the most common ones, this myth is completely untrue. Outsourced accounting services, like others, are available at various rates. You can find companies that charge more but on the other hand, you can also find companies that have specialized structures for small businesses. For instance, our services are designed to meet the needs of both large businesses along with start-ups.
You may want to do all the accounting in-house but it has several hidden costs you might not be taking into account. For instance, retaining employees dedicated to the finance department can be expensive.
Apart from that, there can be other costs in terms of missed opportunities for tax deductions, penalties, missed deadlines and credits you might not know of. Collectively, this option might be pricier – especially for smaller businesses.
Outsourced accounting companies are an alternative for these companies who can’t hire in-house resources and cover payroll taxes and overhead benefit costs for the employees. Outsourcing eliminates the need to cover for these charges as companies only pay for the services they hire. Hence, this makes outsourced accounting a viable option.
Myth 3: The organization will lose control over its financial documents by outsourcing their accounting to another firm.
It’s quite understandable that being a business owner, you want to have complete control over each of its aspects. We think that since it is your company – you should be in control and oversee all its business functions.
This can sometimes lead companies to think that outsourcing one of the most important functions will cause them to lose control over it.
But this is, indeed, a myth. In actuality, by having a specialized firm keep your books in order, you’ll have more control over your finances. With the expertise of the outsourcing firm, your accounts will be organized in a way that you have a clear picture of your financial standing.
This way, your company will be more well-informed in the financial position. Consequently, it will enable you to make more informed decisions for the business. Along with that, it will save the company costs as well.
Myth 4: I can do accounting myself and save more money.
It’s true, the business owner can do the accounting for the entire company themselves and save money. But that’s not it. By doing so, one might be saving money but at an opportunity cost.
Being the business owner, accounting is not the only business function that you will be responsible to oversee and conduct. You need to conduct a time-value analysis of yourself and measure how much each working hour you spend working its worth. The results might surprise you.
For instance, you might find out that by letting someone else do the accounting, you’ll be saving money by focusing on another task instead. By not capitalizing this opportunity, you’ll be doing a job that doesn’t earn you revenue.
Along with that, there’s the question of expertise. No matter how many specialized programs and applications you use, if you don’t know how to use them to their potential and/or don’t have financial expertise, you are bound to make mistakes. This means, more valuable time wasted and the cost incurred.
Therefore, overall, it makes more sense to have a firm that specializes in accounting to handle your books so you can focus on work that can increase your company’s revenue.
(Looking for a reputed, professional and experienced outsourced accountancy service provider? Kindly visit our website www.doshioutsourcing.com or call us at 020-8239-4999 to know more about the range of services we provide)