Multiple business owners prefer in-house bookkeeping and accounting. The reason behind is just that they are used to this structure.
It is simple.
It is hassle-free.
In fact, it is the only method we have known for ages now.
So, what is the issue?
Over past years, technology has changed to the extent that it is now not possible to manage accounting and bookkeeping services in-house. You need automation tools, expert advice, and people who know what they are doing with your accounts.
Well, for a small or medium organization, that’s simply not achievable.
On the one hand, automation requires a considerable amount of money and effort. On the other hand, an experienced team is hard to build. There are money, time, and resource constraints.
This is one of the reasons why payroll services, finance and accounting services get pushed to the backseat. Year after year, we just drive our accounts department to achieve bearable results in the minimum cost price. Isn’t it?
You don’t need to do that anymore. Outsourcing bookkeeping and accounting can help you streamline your functions without spending too much money and time.
In this article, we have explained how. Let’s dive in and start exploring the importance of bookkeeping and accounting outsourcing services.
Why did You need to Outsource Accounting Services?
If you are facing trouble managing your accounts, then you need to outsource accounting services.
If you are unable to reduce the errors in your books, then you need to outsource bookkeeping services.
Simply put, when you are having issues with even a single accounting and bookkeeping task, you should consider outsourcing bookkeeping and accounting. Here’s why:
- You only need to pay for your services.
- You can get access to the latest technology.
- You can utilize the expertise and knowledge of a full-fledged team.
- There no downtime, which gives you updated data anytime, anywhere.
- You can minimize the risk of payroll and accounting mistakes.
Impact of COVID-19 on Accounting and Bookkeeping
In the coronavirus pandemic, we have definitely experienced the most rapid modifications in the economic conditions as well as the business market. There are restrictions on travel, even state-to-state travel, which has shut down businesses for a considerable amount of time. All this was done and is still being done to reduce the COVID-19 spread. The entire country, in fact, the entire world is coming to a halt because of a deadly disease.
As a result, the business ecosystem is experiencing a severe change. Customers today have different expectations from businesses of different industries. Due to this, the auditing and accounting landscape has also changed.
The sudden digitization of the entire landscape is creating a bottleneck in organizations. When this difficulty is paired with reducing revenue, downsizing requirements, and delayed payments, the situation becomes worse for the accounting department; if there is one. A lot of small and medium businesses are stuck in a loop. They are reducing employees to accommodate their budget and revenue. However, this reduction is leading to low manpower, which is impacting their clients and other stakeholders.
Hence, a vicious circle is formed, where uncertainty in accounting is impacting an organization’s ability to survive and sustain.
So, what is the solution?
Cloud accounting software and outsource accounting services.
Through outsourcing bookkeeping and accounting, you can manage access and monitor your financial health remotely. There’s no need to go to the office to access data files. You can simply go online, log in, and check the data you are authorized to evaluate.
Below we have discussed how outsourcing bookkeeping and accounting is better than in-house bookkeeping and accounting. Read on.
Recent Accounting Trends
Do you remember the accounting we used to do even a decade back?
Take bookkeeping, for instance. Everything was manually handled and managed by the team. Every invoice, receivables, payables, and other transactions were recorded by the bookkeeper by hand. This obviously had drawbacks because of errors in manual work.
Now, if we compare this type of working with an outsourcing accounting service, then you have automation tools that automatically record your transactions. The expert team of the outsourcing partner further evaluates the accuracy of the books.
Can you spot the difference?
Accounting and bookkeeping trends have changed over the years. Let’s see a few of these trends and how these trends can improve accounting and bookkeeping activities.
The consistent growth of artificial intelligence has enabled businesses to adopt automation. The use of this automation is also increasing in accounting and bookkeeping departments.
Think about it, how amazing it would be to record transactions automatically, reconcile statements, and capture data from various systems without any hassle. This also reduces the chances of errors in the system to a great extent.
2. Cloud Computing
If there’s one thing that the COVID-19 pandemic has taught, then it is the importance of cloud computing. If you are using system-specific tech, then you may have faced grave issues during the lockdown.
Cloud computing, on the other hand, is in trend; thanks to the pandemic. Every business is moving to the cloud for remote access. Hence, even the accounting and bookkeeping department is shifting to the cloud. This provides remote access to the user. You don’t even have to compromise your access control structure and you don’t need to worry about the security of your data.
In a way, cloud computing has also increased the importance of outsourcing bookkeeping and accounting. Small and medium organizations are outsourcing work to companies from different countries to receive low-cost and accurate cloud-based outsourcing services.
In-House Accounting or Bookkeeping and Accounting Outsourcing Services
No structure is perfect for every type of organization. There’s no denying that. However, for small and medium organizations, outsourcing bookkeeping and accounting is extremely beneficial. Read on to know why. We have compared in-house bookkeeping and accounting with bookkeeping and accounting outsourcing services.
When you are hiring employees for in-house bookkeeping and accounting, the experience and skills of employees play a major role. However, we can’t ignore that there’s a high chance that you may hire an employee who is not properly trained. For instance, hiring a self-taught person. In these cases, you may have a higher risk than outsourcing.
In outsourcing bookkeeping and accounting, you receive high quality. This is because there’s a team, a large team. Due to this, the risk of hiring the wrong employee mitigates. Further, the outsourcing partner runs various checks to ensure that nothing goes wrong.
Of course, you have full control of your working in in-house accounting and bookkeeping. You can keep track of books and accounts, and take care of your due dates yourself.
However, you can do all that with accounting and bookkeeping services as well.
In fact, in outsourcing, you have access to accurate data anytime, anywhere. You can check your books and due dates and see if the laws are being followed. But, even if you forget, your outsourcing partner would take care of it for you.
Additionally, the risk of fraud can’t be ignored in in-house accounting. Being a small or medium organization, you may be able to hire only one or two employees. These employees would get complete access to your books and accounts. This can increase the risk of fraud. In outsourcing, this risk is minimized due to the involvement of multiple stakeholders.
Financial reporting is necessary. If you fail to create reports of your financial processes, you may fail to understand how your business is running, what is your cash flow, and how great is your revenue.
But, in-house employees have so many tasks that they may only focus on immediate responsibilities at hand. For example, managing books, filing taxes, and streamlining cash flow.
An outsourcing bookkeeping and accounting partner can alleviate this risk by offering regular reports. Using these reports, you can gain a clear insight into the end-to-end functioning of your business.
As a small and medium business, accounting and bookkeeping can be really costly for you. Even if you hire one employee, you need to take care of the needs of the employee. From managing their salary every month to offering benefits, this employee is entirely your responsibility.
Here’s what you need to do:
- File payroll taxes
- Offer medical benefits
- Plan the retirement
- Offer sick leaves
- Spend on training and development
When you are outsourcing, all these costs are not yours to pay. You only need to pay for the services you are taking. Most of the time, you can customize your package, which gives additional flexibility to reduce costs as per your requirements.
Costing is one of the top reasons why small and medium organizations opt for outsourcing bookkeeping and accounting services.
You may not get a chance to hire an expert employee because of money constraints. But, you can gain access to the expert employee through your outsourcing accounting services. Usually, accounting providers hire skilled employees with multiple years of industry experience. You can utilize this experience for your organization.
In daily business activities, in-house accounting and bookkeeping can be particularly hectic and burdensome. The quality, efficiency, and accuracy needed in this task can lead to success and growth. But, managing these quality verticals is not easy. It requires team efforts and expert advice.
For this reason, outsourcing bookkeeping and accounting services help in maintaining the accuracy and efficiency of the business. Your team only needs to overlook activities, rest the outsourcing provider would handle. Since you have access to expert professionals, you don’t need to worry about the performance of your accounting department.
If you are looking for bookkeeping and accounting outsourcing services, reach out to us for support and consultation. Paysquare has a team of experts who can seamlessly manage your accounting and bookkeeping activities. Contact us to talk to our experts.