The Basics of Accounting Outsourcing
There has been a drastic change in the way we work over the last few years. With the advancement of technology, globalisation, cloud computing, customer expectations, labour costs, and skills shortages, it has now become the norm for many businesses, including accounting practices, to outsource various aspects of their business to specialists.
So, what is outsourcing? And, why is it relevant? Simply put, outsourcing refers to a business hiring a third-party organisation to perform activities or services that are traditionally handled in-house.
Why Do Accounting Practices Outsource?
There are several benefits of outsourcing your accounting function, including:
Cost reduction: Hiring and training new accountants can be pretty expensive. Additionally, expenses like salaries, holiday covers, recruitment costs, etc., add to your overhead costs. With outsourcing, you gain access to highly skilled accountants at affordable rates. In the long term, hiring an outsourcing company can lead to extensive cost savings for your firm.
Quality management: Manual processing can lead to several errors. On the flip side, hiring an outsourcing specialist will ensure that you get high-quality work that’s both accurate and compliant.
Access to skills and resources: Accounting outsourcing companies employ qualified and dedicated offshore workers in various accounting, tax, and payroll functions. Apart from taking on more clients and improving your services, outsourcing gives you freedom from the pressure of recruiting or reducing staff according to the peaks and troughs of the business year.
Greater focus on core business objectives: Outsourcing is an excellent strategic tool for the growth of your practice. In addition to increasing the bandwidth of your existing workforce, outsourcing will allow your staff to utilise their time on client servicing and high-value tasks.
Productivity and service improvements: With offshore staffing, your practice will be able to increase its profitability and operational productivity. Furthermore, you’ll be able to scale your services and your practice without the need for hiring additional employees.
Accounting and Bookkeeping Services: What Can Be Outsourced?
Outsourcing specialists can handle a variety of accounting and finance functions, including:
Bookkeeping
Payroll
Financial reports
Management accounting
Tax preparation
Year-end accounting
Making Tax Digital
Cost of Accounting Outsourcing
One of the main benefits of accounting outsourcing is cost savings. Managing accounting functions in-house can become extremely costly. There are several costs involved, such as recruiting, hiring, training, and so on. Outsourcing will take away all these additional costs and offer significant savings in the long run.
Furthermore, it’s a known fact that accounting is a highly time-consuming and administrative heavy task. Managing routine tasks in-house will take away most of your time and efforts. By outsourcing this function, you and your employees will have more time on your hands to focus your efforts toward higher-value tasks, like advisory services.