In the current business culture, outsourcing accounting functions has become a better and more cost-effective option than hiring accounting employees. According to this study, the topmost reason why businesses consider outsourced accounting services is because of the cost, The second reason being flexibility. This is to say that a small or medium business can better manage its resources by outsourcing accounting functions.
In this article, we have explored how that is possible. Check this multi-fold discussion covering various aspects of outsourced accounting services.
Advantages of Outsourcing Accounting Functions
The first thing that we should look after is the benefits of outsourcing accounting. It is necessary to make up your mind about outsourced accounting services before moving on with other aspects.
Here are some benefits of outsourcing accounting that you can’t overlook:
Outsourced accounting services are less costly to any business. The reason behind this is that when you achieve outsourcing accounting functions in-house, you need to hire people, manage them, and maintain them. Every activity dedicated to employees right from hiring costs you money.
You can mitigate these costs by utilizing a good outsourced accounting service. For example, Paysquare assists you with seamless, accurate accounting functions. You can eliminate the cost of hiring and managing people in-house.
There’s no doubt in the fact that using outsourcing accounting services leads to better productivity. The simple way to understand this is given below:
If you think of your business as a collection of various functions, you will understand that the core business function is always the most important.
The reason is that this function helps you attract customers and get paid. Your revenue is a source of this function, which is why it powers the entire business. When other important activities like accounting hinder the time of the core business function, you are not able to perform as well as you can.
By outsourcing accounting functions, you can fully focus on core business activity. Hence, improve your productivity.
3. Leading Tech
If you partner with a powerful accounting outsourcing company in India, you can consume leading tech.
As a small or medium enterprise, it is not logical to purchase the leading tech for accounting? Why would you avoid spending this money on core business functions?
But, when you use outsourced accounting services, you are able to utilize leading tech by the provider, which offers real-time data and insights.
In-house, it not possible to secure your data completely. Your employees are working on office units that are not secure from cyber threats. Anyone can come into your office and access these computers or a hacker can remotely get hold of the system and steal your data.
With outsourced accounting services, you can secure the data of your charts, accounts, etc. They have a strong security architecture to keep data privacy intact. There are multiple experts involved in this activity, which helps you mitigate risks further.
What You Should Consider Before Outsourcing Accounting Functions?
Till now, you may have made up your mind to hire accounting outsourcing companies in India. Check some factors that you need to consider for selecting the right provider.
1. Your Priorities
The first step towards hiring an outsourced accounting service is to prioritise. If you don’t wish to outsource every accounting function, then prioritise the ones that are imperative to outsource. This can include sales account management, bookkeeping, etc. You can also look at the packages of the accounting outsourcing company in India to get an idea. If any of these packages seem relevant, you can choose that.
Remember to consider your budget when prioritising tasks that should be outsourced. This will help you move in the correct direction from the starting.
To extract full advantage of the outsourced accounting services, you need to specify your requirements. Take a look at the current accounting model and note down every limitation that reduces your efficiency. For instance, poor cash management or book management. When you outsource accounting functions, convey your expectations to the provider.
This will help you and the provider stay on the same page. An outsourced accounting service is only able to deliver your expectations when you make them clear in the starting only.
Many businesses are not able to outsource accounting functions because they fear security. So, you should understand the security structure of the accounting service. This will help you understand the following:
Can you trust their employees to maintain security?
Can you trust their software units?
Can you trust their IT architecture?
Can you trust the provider as a brand when it is about security?
Answering these questions will help you receive answers regarding security.
A large number of businesses avoid outsourcing accounting functions because they have previously faced issues with communication.
So, when you select an outsourced accounting provider, you need to be careful. You have to talk to them multiple times, take references and contact them, and check online reviews. These things will help you understand their communication policies better.
Lastly, compare the pricing of various vendors. Of course, you may already have a budget in mind but don’t stick to this blindly. Any vendor that is offering services in your budget may not be the right provider.
You need to compare packages along with the services being offered to make the right decision. This will help you select an efficient outsourced accounting provider. For instance, Paysquare always endeavors to offer more functions in a cost-effective package. You can check our services on our website now.
When Is The Right Time To Consider Outsourced Accounting Services?
If you are searching for the when then here’s the answer.
When do you need to hire an outsourcing accounting company in India?
When is the right time to shed this responsibility?
1. Early Business Stages
One of the best times to consider outsourced accounting services is in the early stages of the business. During this time, you need to be resource-intensive yet mindful of your services. In fact, you need to impart as much time to the core business functions as possible. If you reduce the responsibility of accounting, you can receive long-term benefits.
- Lower costs
- Enhanced productivity
- Clear books and accounts from the starting
- Low risk of non-compliance
2. Need for Professional Expertise
Another time to use outsourcing accounting functions is when you need professional experience. If you are regularly getting compliance warnings, then this becomes imperative. Additionally, small businesses need to tap into the reports and insights of the accounting department to make valuable decisions.
You can’t afford to make accounting mistakes otherwise there are compliance penalties or fines. Professional advice and expertise can help you in this case.
3. Need to Reduce Overheads
As already discussed, small and medium business owners need to reduce overheads. This is because they need money for the core business functions and to cater to client needs.
For this reason, outsourced accounting services like Paysquare helps in decreasing overheads by streamlining the accounting functions of the business.
- Reduced compliance issues
- Fewer accuracy issues
- Simpler management
- No responsibility of employee management
All these things help in decreasing overheads. Some providers like Paysquare even allow you to customize and adjust your package in a way to decrease costs of the business and improve business efficiency.
What Type of Functions Can You Outsource in Accounting?
There are a set of accounting functions that can be easily outsourced in the package you take. Beyond these basic services, you can extend your outsourcing package to outsource payroll, temp staff hiring, etc.
1. Account payable and receivables
- Invoice approval
- Invoice storing
- Expense reporting
- Check to process
- Online payment approval
- Vendor inquiry handling
- User payment or billing
- Order management
- Collection management
- Debt management
- Cash reporting and forecasting
2. Bookkeeping outsourced accounting services
- Expense processing
- Order to cash handling
- Ledger balancing
- Subscription renewal management
- Expense and time management
- Invoice payments and processing
- Bookkeeping tech setup
If you are a small or medium organization, then outsourcing accounting functions can help you improve operational efficiency and productivity.
During the early years of the business, you have multiple things to manage. The core business function is crucial and difficult to streamline. Outsourcing accounting services can help you reduce the burden a bit. With this help, you can focus on progressing your business while the accounting outsourcing company in India assists in seamlessly managing accounting functions.