Outsourcing accounting services is a great way to save time, money, and your sanity. It can be difficult for many business owners to find the time or expertise necessary to keep up with all the paperwork that comes from running a successful company. We will examine how outsourcing accounting services can help you improve your efficiency and your bottom line.
You will have access to a team of experts
Accounting is one of the most difficult professions to master. Most accountants have many years of education, training, and experience. Many accountants work toward one or multiple certifications—Chartered Accountant, Certified Public Accountant, Certified Managerial Accountant, Enrolled Agent, or others.
Each certification is useful depending on whether the accountant wants to focus on financial accounting, taxes, auditing, or general business. Each certification has rigorous requirements that require many hours of study, experience, and testing.
In most cases, the requirements for certification are overkill for what is used in daily business life. So, if your accountant is not certified, it will likely not have an impact on their ability to have a drastic effect on the long-term success of your company. What it reveals is how serious the accounting industry is about producing talented accountants.
Also, accountants work with many businesses daily. By outsourcing your accounting, you gain the benefit of avoiding the mistakes that other businesses have made that your accountant has already solved. Accounting can be frustrating, so your accountant has had many wins in their career. This shows that your accountant has the moxie and resolve to ensure the continued success of your business.
You can avoid the headache of hiring and training employees
For most small and medium-sized businesses, hiring and training a quality accounting team can be an expensive and resource-intensive process. Even retaining the best talent can be a headache. Because the needs of a business can change throughout the year, it is easy to adjust an accounting team through the outsourcing company.
By outsourcing your accounting, you are passing on headaches that would otherwise be yours and instead hand them off to an expert who specializes in accounting. This frees your time up to focus on core business functions that add value to your company. You are free to do what you are best at… while they do what they are best at—adding to your bottom line.
You will save money and time
They say that a penny saved is a penny earned. First, you will save on the large amount of money that goes into office facilities, software, office machines, and supplies. As briefly mentioned, not only will you bypass the headache of maintaining a staff, but you will also save on the salaries and payroll taxes of in-house accountants. By outsourcing, you will have access to the latest technologies and innovations without additional costs.
They will find money you did not even know you had. Did you know that when the coronavirus hit, congress passed several laws aimed at helping businesses survive the anticipated economic impact? If you did not know, your accountant did and already had several strategies on how to help you benefit.
Additionally, the tax laws change every year. By outsourcing your accounting, you will partner with accountants who are on top of these changes and help you get access to help and tax deductions that will enable you to thrive—especially during difficult times.
You will be up to date on your financial position
For simplicity, many small- and medium-sized businesses choose the cash basis of accounting. In essence, revenues are recognized when cash is received; expenses are recognized when cash is paid out. Although it saves time, you lose out on what your true financial position is. For example, if you prepaid some expenses—such as rent or insurance—you may have more cash available than you think you do.
An outsourced accounting team is likely to prefer to use accrual accounting because it gives insights into the financial health of a company. Accrual accounting recognizes and records transactions when they occur. For example, you buy a $20,000 distribution truck to be used for the next 10 years. Under the cash basis you expense $20,000 when purchased. This makes one year look bad and all the other years look good. Under the accrual basis, you would depreciate it as it is being used—over the next 120 months. As you are using the asset, you are likely generating a profit from using the asset.
An outsourced accounting team can create accurate and timely financial reports so you can predict future revenues and costs. This will help you make well-informed decisions for the long-term success of your business. With the accrual method all sorts of metrics are now available to tell you exactly how you are doing. Where performance is measured, performance improves.
Outsourcing your accounting services to a team of experts is a wise investment for your business. The right partner can help you increase your bottom line and avoid the headache of hiring employees. They will give you guidance on how to best manage risk in each area of business so that nothing falls through the cracks. You will be able to save time by not having to worry about staying up to date with technology and billing cycles.
Having an expert staff who has years of experience in the industry who is always looking out for ways to improve efficiency and reduce cost is one of the best ways to give your business a competitive edge. Having access to a team of professionals dedicated solely to handling all matters related to finance and taxes on behalf of your organization means you are better positioned not only from a risk management standpoint but also having funds available for other pressing needs within your company.