Business needs both financial and management reports for the growth of
its company. Your business needs basic financial reporting for compliance and
making sure your books are accurate. As the business grows, you find it
difficult to tackle every aspect of your business. Most bookkeepers only know
how to handle billing, collections, deposits, payroll etc. When you reach a
point where a bookkeeper is not sufficient this is when outsourcing comes into
the picture. Accurate and timely accounting is vital to keep your business
afloat. 

What is outsourced accounting and bookkeeping?

Outsourcing accounting and bookkeeping is a service which provides full
accounting experience for small businesses. An outsourced accounting department
handles day to day transactions of the business, accounts payable, accounts
receivables, payroll, management financial reporting and many other services.
Outsourcing offers a team of professionals at a lower cost as compared to
hiring in-house. 

The following reasons will compel you to outsource your accounting and
bookkeeping services:

  • Accepting
    outside investor capital
  • Employing
    more than ten people to carry out your accounting activities
  • Reaching
    $1 million in revenues.
  • The
    business owner cannot be involved in every aspect of the business
  • Requiring
    more sophisticated financial reports for decision making
  • You
    see outsourcing as a competitive advantage without any upfront investment
    of time and money

Benefits of outsourcing Accounting Bookkeeping services to a third
party:

  • Focus on core business:

Core competencies are the USP of the business, senior management skills
and competitive advantage that are responsible for business growth. Outsourcing
accounting activities frees up management’s time and focus on core activities
of the business to grow and sustain the business and increase
profitability.

virtual bookkeeping services

  • Removal of In-house burden:

By outsourcing to a third party, a business eliminates time and money
on training, staffing and recruiting their accounting staff. As a manager, you
already have human resources issues and a CEO will not want to increase that
burden by appointing an accountant department. The outsourcing company has a
dedicated accounting team. This team has greater productivity at a fraction of
the cost for a full time accounting department. 

Outsourcing is beneficial for startup companies as well. These startups
need a scalable accounting platform right from the beginning and are often
required to submit business operations plans to their stakeholders in
advance.

  • Access to experts:

One of the biggest advantages of outsourcing accounting and bookkeeping
activities is to get access to accounting and business technology experts.
These experts devote their time and energy to keep up to date with technology
keeping your business in mind. These experts are well equipped with advanced
technologies that can benefit your business. 

Outsourcing accounting services offers complete peace of mind and
offers scalable service. This peace of mind keeps management focused on sales,
customer relationships and building value in the business. It also ensures
confidence in the accuracy and a quality of the business financial information.
Outsourcing accounting offers scalable service options that provide efficiency
and complete peace of mind. 

  • Security of data:

Your accounting data is stored on a secured server in the cloud
protecting against any physical loss of data and to enhance business continuity
and disaster recovery. 

Virtual Accounting Services

  • Compliance Vs. Reliance:

The difference between an inhouse CPA and outsourcing firm is that the
CPA typically focuses on tax and audit compliance whereas an outsourcing form enables
reliance such as providing financial intelligence which can help you in making
reliable financial decisions. 

Compliance ensures things to get done while reliance provides
actionable financial intelligence at your fingertips to make data-driven
decisions. 

  • Increased operational efficiencies:

Outsourced accounting firms can increase efficiency for your business
by designing and optimizing financial systems with a combination of
automation and integration to deliver greater financial reporting capabilities.

  • Decision-Ready Financial Intelligence:

Better insight allows for better financial decisions. A traditional CPA
would not be able to derive in-depth knowledge. Hence, a business owner needs
strategic decisions that impact profitability of your business. 

Conclusion:

Outsourcing business accounting and bookkeeping
to third parties saves at least 30 percent of your cost which is less than
building and maintaining an in-house accounting department. However, the true
value of outsourcing bookkeeping and accounting service is not just restricted
to cost saving. Businesses choose to outsource to improve their core business
activities, to avoid the risk of hiring more employees and also to gain access
to expertise that small businesses could not afford otherwise.

Author's Bio: 

James kahnwald