When you decide to start your own business or company, you should remember that proper management of your finances is crucial especially if you are aiming to expand and grow your business. You must keep in mind that proper handling of your finances is not just about continuously gaining profit or revenue. It is also important for a business, particularly if you are fairly new in the market, to keep all business records updated and every financial data accurate. This information will show your progress. Soon, it will eventually help you to plan and make smart decisions for your business.
Why Outsourcing Accounting Services Better?
There is a growing number of businesses that are choosing outsourcing accounting services like finance and bookkeeping needs rather than hiring regular accountants. Why? Because it is a great way to save on monthly expenses on salary, office maintenance, training and seminars, and other perks that a regular employee has. Aside from that, many accounting outsourcing companies proved that they can accomplish financial tasks on time without compromising the quality of their work because they have the best people with technical skills and experience who can cater to your specific needs.
What Accounting Services Can be Outsourced?
Aside from outsourcing bookkeeping services, here are other financial tasks you can outsource:
- All forms of MYOB, XERO and Quickbooks data entry
- Preparation of reports
- Payroll maintenance
- BAS, IAS and Income Tax preparation and submission
- Bank reconciliation and preparation of financial statements
- Recording and reporting
- Accounts Receivable
- Accounts Payable
- Invoicing and Debt Collection
- Cash Flow Management
5-Step Guideline About Outsourcing Accounting Services
But before you commit yourself to outsourcing finance and bookkeeping services, follow these five easy steps to make sure you are making the right decision.
Step 1: Identify the Accounting Services You Want to Outsource
You never want to skip this step. This is something you must figure out as a business owner. By the time you consider outsourcing, you must know what are the things you personally need to do and which tasks you want to delegate. Go over your finance tasks and see which areas you need help with. List it down so never miss out on anything. Take note, you don’t have to outsource everything. You can keep some of the sensitive tasks in-house and outsource that particular task that is time-consuming or those that require specific expertise or skill set.
Step 2: Find the Best Accounting Outsourcing Company
After you figure out the amount of tasks you want to outsource, you can now identify the number of people who will work on it. If you run a small business and you only need someone to deal with all your bookkeeping needs, you can consider hiring a full-time accounting or bookkeeping VA. But if you have a lot of finance tasks to complete, you should consider hiring a team instead. You must find the best accounting outsourcing company that can offer you a great deal. Tapping an accounting outsourcing company can also help you in identifying the areas of improvement with regards to your finances, they have virtual assistants that can share their expertise with you on this specific field. Other advantages of outsourcing are the accuracy and their value to the quality of their work. Whether you hire a VA or a team, you must still set guidelines. Confirm with your outsourcing partner how long the tasks will take to complete and set reasonable deadlines. You should also agree on which timezone to use, especially for outsourcing accounting companies that have different time zones. Remember, there are a lot of outsourcing companies that offer finance and bookkeeping services so you need to choose which one has the most relevant experience.
Step 3: Choose the Right Accounting Software for Your Business
This step is also important and should not be neglected. Your outsourcing partner should use the same software you are using to process your data. This is to avoid errors and keep the format consistent. Some software is also unable to process data that came from a different system.
These are the common accounting and bookkeeping software that is used in the finance department:
If your outsourcing partner offers a new software you are not familiar with, be firm and follow your own choice because some of these services are project-based and you might have a hard time processing the data you collected when the project is over.
Step 4: Make Sure That Your Data is Protected
This is related to the previous step. Knowing the software your partner is using allows you to still check their work and somehow monitor their tasks. Data breach is one of the biggest fears in the outsourcing community. Before you sign the contract, ask your outsourcing partner what security measures they have in place to protect your data and online policy. If you can, keep sensitive data in-house to minimize the chances of data loss.
Step 5: Compare the Possible Cost
So after dealing with steps one to four, you are now almost ready to decide. Cost savings is one of the reasons why most businesses outsource accounting services. However, this is not the best option for all. It is not advisable to go with the cheapest option because you might eventually encounter problems rather than ease on workflow. Outsourcing can sometimes cost more than you expect it to be. If you want quality work, you need to be willing to pay for it. So for the last step, compare the amount you will spend if you will outsource your accounting services over the cost of hiring an in-house team but just like with other services, outsourcing always proves that it is more worth it.
Outsourcing is not different from other business-related decisions you make. It comes with both benefits and risks but to help you minimize or better, eliminate wrong decisions and mistakes you might commit, follow these steps, and consider the advantages outsourced accounting services can give you. Take your time to weigh your options because there are tons of outsourcing companies that can provide you such services.