A lot of businesses and entrepreneurs have embraced outsourcing various business functions including finance and accounting. But, why should you consider outsourcing in your business? Would known outsourcing benefits help your business achieve its utmost potential in the industry?
With the advancement of technology, the way we do business these days is far different from how things are done before especially when it comes to finance and accounting. Sometimes, it can even be hard to keep up with the changes in the technology as well as the constant changes in accounting policies.
Outsourcing accounting can be done in different ways: getting a freelance accountant, hiring an accounting agency, and business process outsourcing. Depending on their services, each option fits with a specific situation on hiring.
Businesses hire a freelance accountant or bookkeeper for one-off or annual consolidation of their accounts and tax filing. They hire accounting firms for quarterly auditing and compliance of tax returns. A BPO company, meanwhile, is fit for monthly regular accounting duties.
Advantages of outsourcing finance and accounting
There is a reason why businesses outsource finance and accounting services from external service providers. For one, the biggest reason is the affordability of quality accounting functions. Outsourcing accounting personnel for a specific task proves to be more cost-effective and often even cheaper compared to hiring a person in-house and building your own accounting team.
A reason why outsourcing has become famous in finance and accounting is the already available and established processes that service providers have. They don’t only offer personnel but also tried and tested accounting processes like invoicing, paying bills, and reconciling accounts that can make the entire process faster. It means that you can now avoid the regular headaches you get when organizing your business accounts.
Accounting involves a lot of organization from all processes and documents that come with it. Sorting everything out requires a lot of time and effort. But, when you outsource this function, you can relax and give more focus on improving your core business functions.
When it comes to a business’ accounting documents, a CPA would always be a great help in sorting out and reconciling every data. However, hiring one in-house can be extremely expensive. Fortunately, you can outsource an accountant for your business. Outsourcing a CPA can greatly make your accounting issues so much easier.
Accounting and bookkeeping services
Different services can be outsourced to accounting and bookkeeping firms to ensure better cash and budget management for the company.
Outsourced bookkeeping services
Bookkeepers are employees with expertise in consolidating their accounts and expenses in one place. They are also tasked to follow up client dues, file taxes accurately, and initiate transfers for payment of various suppliers.
Companies can get a freelance bookkeeper through different platforms such as UpWork and Fiverr. They can directly hire and pay them through their payment service accounts and is best with temporary and urgent accounting tasks to accomplish. They can also have a specialized virtual assistant to do this.
Certified Public Accountants (CPAs), meanwhile, focus more on higher-level tasks. They are more like the Chief Finance Officer of small businesses. They are the ones with the authority to prepare income statements, financial reports, and financial insights for the company.
Though they still coordinate with bookkeepers in compliance with government requirements and auditing. CPAs deal with verifying and approving books of accounts then submit it to government agencies for tax declaration and yearly audit.
Outsourcing accounting services
Offshore companies also offer full accounting services, including management consultancy, tax filing and planning, and other specialty services in case of suspicious or fraudulent activities in the business.
Accounts payable outsourcing
Offshore firms can handle accounts payable (AP) of a company. They are the ones that schedule payments to suppliers and creditors to maintain their client’s good credit standing. One of the reasons businesses outsource their AP is continuity. When an employee is out, supervisors handle and schedule transactions to other persons in the group. They are trained to manage multiple accounts in case a member is away or on leave.
Accounts receivable outsourcing
Aside from monitoring client billings and dues, outsourcing accounts receivable allows businesses to do other functions such as managing orders, tracking customer applications, lessening budget deficits, and reiterating unallocated funds. This also improves customer interactions since the AR team is there to reach out to customers, remind them of their dues, and find out if there are issues on their payment.
Lastly, procurement processes can now be outsourced as well. Instead of hiring and developing a procurement team, businesses now outsource several processes such as cost control, supplier bidding, and contract management. SMEs, especially those involved in real estate and construction services and those with no established internal competencies yet, benefit from procurement outsourcing,
Offshore accounting services
The Philippines is one of the most popular outsourcing destinations in the world. It boasts its cheap labor and resources, high-quality equipment, strong English proficiency, and manpower expertise. Though popular in customer service and technical support, the country also offers its accounting services to different sectors. To know more, check the Top 40 companies to Outsource in the Philippines.