When considering whether to outsource your small business’s accounting and finance services, you cannot afford to make an impulsive decision. Even before looking for a competent expert for the work, you need to understand and be sure of your priorities. First, be certain of the benefits of outsourcing your firm’s accounting and finance work, given its nature and model. Then assess what accounting services your small business needs and which services need to be outsourced or can be safely outsourced. You should also understand why other firms outsource their accounting work and to what extent your needs match or differ from theirs.
Small businesses generally outsource their bookkeeping and accounting to have those services handled proficiently by an expert fully conversant with legal complexities and the latest industry trends and regulations. It may not be due to a lack of in-house expertise or resources, though that may be one of the reasons. A business will hire in-house staff to handle vital processes if the need is great enough. Even if there are sufficient in-house expert resources to handle all bookkeeping and accounting, outsourcing frees up those resources for core business activities. Furthermore, people may often nurture the wrong impression that outsourcing accounting processes can save a lot of money.
The bills of an expert service provider may end up being higher than having an accountant on your payroll when your financial affairs are not overly complex. But the level and quality of accounting support you can access by outsourcing your processes, you may only be able to match in-house if you open an accounting firm. An external accountant or accounting firm can provide comprehensive support and help your business navigate financial regulations and compliance requirements. Besides bookkeeping and accounting, tracking income, expenses, and other financial processes, they may also provide budgeting and tax advice and payroll processing.
Sometimes, depending on an external partner to manage accounting may be more stable than hiring in-house accountants. Even after training and spending resources on in-house staff, they might leave at any moment. With an external accountant, this rarely happens because a service provider won’t let go of you as a client. Even if exigencies happen, they will arrange substitutes to safeguard their market reputation. Other advantages include gaining scalability and flexibility and quickly expanding or contracting your financial operations without hiring or firing professionals. Outsourcing your accounting can also give you access to the latest technology and infrastructure, which would be overkill to install in-house.
Given all its advantages, outsourcing your accounting and finance services may be a wise decision for your small business as it will allow you to focus on your core competencies and more critical business activities like marketing, customer services, product development, and others, rather than spending time poring over accounts and payroll.
