Accounting and Bookkeeping are an integral function and part of any business. The most important reason for this is for determining the financial health of your business at any point in time, without which your business cannot survive. Secondly, there are many complex statutory requirements when it comes to operating a business which needs to be complied with. These requirements are constantly changing and failure to maintain the books of accounts in accordance with these requirements would mean a heavy penalty. Besides this, deductions made for Employee Provident Fund and Employee State Insurance scheme need to be submitted on time. All these responsibilities are time-consuming and if they don't add value then you could be losing your customers.
There are payroll outsourcing firms in India to whom you can outsource your Accounting and Bookkeeping functions too. If you do a cost-benefit analysis, you will find that it makes more sense to outsource these functions rather than do it in-house.
Here are the top 10 reasons to outsource your accounting and bookkeeping
These are the benefits you get when you outsource your Accounting and Bookkeeping to a temp staffing firm:
1. Reduction in overheads
Maintaining an in-house accounting and bookkeeping department is expensive because it means paying the staff salaries and other statutory benefits, investing in expensive software which would require to be updated, hardware and its maintenance, office space and other incidental expenses related to a department like a furniture, electricity, and so on.
When you outsource your Accounting and Bookkeeping you don't need to worry about these overheads as the staff will be on the rolls of the temp staffing firm. All you need to do is pay them a fee and they will take care of these responsibilities.
2. Compliance issues
There are a lot of statutory benefits which need to be complied with like the Employee Provident Fund and Employee State Insurance Corporation scheme when you have your own payroll department. When your employee count is over a certain number, you need to register the employees for these schemes, failing which you will have to pay a heavy penalty. Not only do you need to register the staff names, but you also need to submit the deductions and the matching employee contributions on time.
When temp staffing firms take care of your accounting and bookkeeping, then you don't need to worry about compliance with these statutory regulations. They will ensure that all the required registrations, deductions and any tax deducted at source are complied with.
3. Costs of absenteeism
There are times when the in-house staff are absent due to some emergency medical problems or are on sick leave. This would mean that the accounting and bookkeeping functions would be kept on hold because getting temporary staff on short notice is not easy. This could also lead to a delay in getting important financial reports like the cash flow statement, profit and loss account, and balance sheet.
Outsourcing your accounting and bookkeeping functions will help resolve this problem.
4. Fewer errors
Accounting and bookkeeping records need to be accurate in all respects so that you get the right overall picture of your business. This is also necessary as per the requirements of the Income Tax Regulations. Errors mean that your accounts will not be accepted due to which you will have to pay a penalty.
Payroll outsourcing firms have a team of qualified professionals who will ensure the accuracy of your accounting records.
5. Improved cash flow
The cash flow of the business depends on the timely realization of accounts receivable and accounts payable. If accounts receivable are not realized on time, it will lead to a cash flow crisis. If accounts payable are not paid on time, supplies will be affected.
6. Customer Focus
If accounting and bookkeeping is not your core area, then by spending time on it you are not paying sufficient attention to your customer requirements. This will adversely affect your profits.
When you outsource these services to a payroll outsourcing firm, then you can focus on your customer needs and expand your business.
7. Business health
When you decide to outsource your accounting and bookkeeping services, you get up-to-date records on the financial health of your business from the financial statements like the balance sheet and profit and loss account.
With this information, you know what action has to be taken to improve business profitability.
8. Future projections
Outsourcing your accounting and bookkeeping functions means that you will get financial and operating MIS reports which provide the foundation for future business projections in terms of revenue and expenditure. These are benchmarks against which your business performance can be measured.
9. Audit formalities
Your accounts need to be audited every financial year. Based on their findings, the auditor's report is prepared and any discrepancy from standard accounting procedures is mentioned.
Since the books of accounts are prepared by the payroll outsourcing firm, you don't need to worry about answering any audit queries.
10. Timely filing of returns
Since the entire process of accounting starting from bookkeeping to preparation of key financial statements like the profit and loss account and balance sheet are handled by the payroll outsourcing firm, so when it comes to filing your income tax returns it is done within the due date.
Better Business Performance with Paysquare
Accounting and bookkeeping are extremely important for the health of your business as well as statutory compliance. When you hire a payroll solutions company for these services, you can focus on your existing and potential clients.
With over 17 years of experience in providing end-to-end solutions in accounting for small and medium enterprises, Paysquare will provide a customized accounting and bookkeeping solution for your business in a professional way.
Expand your business to the next level by partnering with a payroll outsourcing company like Paysquare.