CFO Service Finance & Accounting

What are Some of the Essential Reasons to Outsource Accounting Work?

With more and more outsourcing companies appearing on the market, small businesses now have endless opportunities to optimize their services, products, and people. Despite all the advertising and success stories, many small businesses are still reluctant to use these services and pass on their company’s time-consuming administrative tasks to third parties. It can actually be a good idea to try and outsource your accounting work because there are a ton of key reasons to do it.

Reduced Costs and Business Operating Costs

If the entrepreneur decides to outsource his accounting work, he can save a lot of time and money. In particular, small companies or individual companies can fully concentrate on the core areas in order to develop the company further.

The fixed costs are also reduced. Thus, the accounting software and the necessary training of the staff are often very expensive, outsourcing the accounting avoids this cost point.

Work with Highly Skilled Accountants

The entrepreneur benefits from the knowledge of the accountants so that all benefits are used to reduce the tax burden and the ongoing audit of the finances and the reminder system further optimize the payment processes. Bottlenecks are quickly identified so that countermeasures can be taken in good time.

Get Expert Advice from Trained Accountants

Outsourcing of accounting thus makes sense in many ways. Especially small businesses and sole proprietors can concentrate on the essentials and at the same time have expert advice at their side.

There is a big difference between theory and practice, especially in accounting. If you have attended an accounting course, this course is unlikely to be of much use to you to apply and understand accounting software. Even if the knowledge about “Debit” and “Credit” is the basic requirement for bookkeeping, the mere theory brings little. Finally, you must also be able to complete a VAT declaration correctly. All of this can be done more competently by a trained accountant.

The service provider that outsources the bookkeeping knows how to find the best people on the market. The Human Resource department of the company of such a service provider specializes in the search for persons with high competences in the field of accounting as well as on the verification of such persons. In addition, such a service leader and his employees gain great experience while working with many clients and continuously accumulate unique know-how through various systems.

Efficient Accounting for your Small Business

The entrepreneur benefits from the knowledge of the accountants so that all benefits are used to reduce the tax burden and the ongoing audit of the finances and the reminder system further optimize the payment processes. Bottlenecks are quickly identified so that countermeasures can be taken in good time.

Outsourcing can Save You Tons of Time

Accounting does not just mean entering vouchers, but also reconciling accounts, processing payments, recording incoming payments, checking quality, and completing the VAT form correctly. Especially when the bookkeeping does not work out (which unfortunately is not always the case), the search for the needle starts in a haystack. It can quickly take a few hours on it until you have found the errors.

If you want to save yourself all of that trouble then you may as well just hire an external service provider for all of your accounting needs. They can free up so much of your own precious time. And that can be a huge life-saver especially if you have got a lot to do in your own business.

Outsourcing Means That you do Not Need to Manage your Own Accountant.

If your company grows, you need an accountant. The accountant usually works alone and has an isolated workspace within your company. Its occupancy^[1] rate is very unevenly distributed over the month, but also over the year. You must either trust him or control his work regularly. Does your accountant go on vacation, into the military, get sick or leave the company before the end of the probationary period – what then? Do you then do your own work again? Or do you work in a new person? Do you understand enough of the matter so you can control your accountant? So as you can see there are a ton of issues with simply hiring an accountant for your company. And that is why you may want to outsource your accounting activities instead.

If you outsource your accounting work, then you would not need to worry about dealing with your own in-company accountant. You can just rest assured that the external service provider will give you the kind of deal that you will need when it comes to finding a competent and trustworthy professional accountant to handle all of your business’s bookkeeping needs.

External Service Providers Will Use Their Own Accounting Software.

If you outsource your accounting needs, then you do not have to deal with setting up or even buying accounting software. If you want to do the bookkeeping yourself, then you need a software. Whether the software license is expensive or cheaper, whether you pay in monthly installments or a one-time license, or whether you are charged annual maintenance costs – the introduction of the software will be expensive – one way or the other. You need to install the software, install updates, customize and parameterize for your needs. You need to get to know the functions of the software in detail so that you can work meaningfully and reliably with them. The big cost factor is not necessarily the software license, but the time you have to take care of the software and related issues. Even more expensive is the application of the software: you have to invest in it yourself!

Outsourcing is Better for Risk Management

Accounting outsourcing can protect against the risk of mistakes made by accountants. A service provider that provides accounting services assumes the risk of the work to be carried out and bears the financial consequences if it violates the law or fails to meet the deadlines. A service provider that offers accounting outsourcing employs specialized people who have great experience thanks to the specific nature of their work. In addition, they work with numerous systems and procedures that improve security. All the above factors significantly reduce the risk of committing any errors.

Read our article: What is Record to Report (R2R) Process