As companies continue to work with smaller budgets, some find that outsourcing certain functions is a great way to maintain quality and reduce costs. The concept of outsourcing is not new. Over the years, companies have outsourced services such as accounting, bookkeeping, and controller/CFO services to third-party agencies. It used to be considered an option for larger companies, but today outsourcing has become widely available, and many businesses benefit from it.
According to a KPMG survey, around 40% of businesses choose to outsource their accounting. When a business owner is no longer actively involved in all aspects of the company, it entails more than just bookkeeping and basic accounting software, which are handled by whoever has the time. A growing business not only requires but deserves a formal accounting department. Outsourced accounting service provides small businesses with a full-service accounting department.
If you consider whether outsourcing your accounting is the best option for your business, that’s your sign to make the switch!
Outsourcing an accounting team is typically less expensive than recruiting someone in-house. Recruiting, hiring, and training internal auditors can be costly for a business. It takes 8 to 26 weeks for an employee to become fully productive, and studies show that companies lose an average of 1-2.5% of their total revenue in the onboarding process. Outsourcing accounting services also saves you time and streamlines the payment of salary, benefits, payroll taxes, vacation, insurance, etc. In addition, outsourcing accounting services will allow your company to focus on growth and adding value to your customers.
As a business owner, there are many things to keep track of, including Internal Revenue Service (IRS) deadlines and accounting standards. It can be challenging to keep up with accounting regulations but an expert team like Peach BPO are trained to do so. Outsourcing accounting to a third party reduces the risk of non-compliance and allows for better internal controls, potentially reducing the risk of internal fraud. While fraud may never be completely eliminated, a team guided by best accounting practices offers a much better chance of avoiding fraud risk in your business.
In-house accountants may have limited skills. As a result, errors in financial reporting are likely to occur. This might result in severe penalties and potentially jeopardize your entire company.
But if you decide to outsource, you gain access to a pool of professionals with diverse skill sets and experience. This ensures that your books are up to date, payroll is completed on time, and penalties for incomplete or inaccurate paperwork are avoided. By working with an outsourced accounting team, businesses can have access to these experts without the high cost of hiring them in-house. This is particularly beneficial for companies with complex financial needs or in a growth phase. You’ll get the right talent without hiring full-time employees or incurring additional costs.
Outsourcing eliminates the need to purchase additional accounting hardware and software. This will save you time and money while getting more accurate results. An outsourced accounting provider fully understands your business and advises accordingly. For instance, your virtual accountant can set up automated workflows so that source documents like your bank statements can be retrieved each month without your involvement in the administrative process. A tech stack can make a big difference in the growth of your business and the time you save on office work. Peach BPO uses the latest accounting software to support your business and, more importantly, offers the experience and know-how to use it effectively.
One of the hidden benefits that many companies need to realize is that outsourcing the accounting function provides an opportunity to update and improve their current accounting processes. Outsourced accounting providers implement best practices and controls that can standardize work and improve data efficiency and timeliness. Additionally, outsourced accounting can reduce book-closing time and improve benchmarking and core financial processes to help businesses meet regulatory requirements. An outsourced accounting provider like Peach BPO can develop effective systems that optimize the collaboration of people, processes and technology to help businesses take advantage of opportunities to reduce process time and cost.
Businesses striving to remain competitive and relevant in today’s business environment must adapt to change quickly and efficiently. When you outsource your accounting function, you can reduce significant investments in human resources, technology, and infrastructure and increase productivity by enabling you to scale. For example, outsourcing allows a business to deal effectively with activity surges that may be seasonal or driven by business cycles. Companies can outsource these concerns instead of having in-house resources that are sometimes too busy or too slow. Outsourcing can help you redirect your attention and resources away from non-essential tasks to serve your customers more effectively and help grow your business.
When you have tons of responsibilities, the last thing you want to worry about is whether your business is compliant. Outsourcing ensures that your company’s obligations are met and that you won’t get into trouble with the IRS. If someone gets sick, a competent team will still handle your work. With timely and accurate accounting data and reporting, you get a complete view of your company’s financial health, giving you greater peace of mind to make more accurate and informed decisions. Regardless of the size of your business, outsourcing makes good business sense. It puts your mind at ease that your financial operations are in order so you can focus on growing your business.
Accounting is essential to any business, but it can also be challenging. Effective financial management can make the difference between your business growing or stagnating. Businesses that outsource their accounting operations reap enormous benefits, from cost-effectiveness to adaptability. Outsourcing also helps standardize your accounting processes, improve cash flow and make informed decisions for a profitable year. Hence, it is advisable to find the best outsourced accounting company to give your business the boost it needs.
When looking for a service provider, look for a partner – a company that can build a relationship based on trust and professionalism. Learn more about how Peach BPO can give you the freedom to grow your business.
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