Outsourced accounting is a crucial support system for any successful business. However, small to medium-sized businesses (SMBs) often invest excessive time and resources in managing in-house accounting operations.
According to Deloitte, 59% of companies have outsourced at least part of their financial work in an effort to cut costs and become more effective.
With outsourced accounting services, businesses can pass on crucial but time-consuming financial tasks to outside experts and spend more valuable time innovating and growing. And it is not just about cost-cutting: outsourced accounting significantly improves business performance through improved reporting accuracy, better regulatory compliance, and top-shelf access to financial expertise.
For business leaders and decision-makers, it all begins with how outsourced accounting can improve operations to ultimately secure long-term success.
Outsourced accounting hires a third party to perform several financial tasks-from simple bookkeeping to complex planning and analysis functions.
Some the most common functions outsourced involve:
According to the 2023 B2B Outsourcing Survey by Clutch, more than 27 percent of SMBs outsource their professional responsibilities and that percentage continues to rise as companies look for cost-effective ways to enhance business functions.
During economic downturns, businesses are usually compelled to cut costs. which may lead to compromises in quality or efficiency. This is where outsourcing opportunities become the game-changers. By transferring some business operations to third-party providers or offshore teams, companies can significantly reduce costs without compromising on productivity. In the following sections, we’ll explore the key benefits:
Maintaining an in-house finance team is costly, considering salaries, benefits, office space, training, and technology expenses. Outsourced accounting helps to save the overheads.
Key Takeaways:
According to Accounting Today, the simple fact that these companies only pay for what they need, without having to hire full-time employees for one-time or seasonal work can reduce operational expenses by as much as 40%.
This flexibility is very useful to growing businesses with a need for scalable financial solutions that do not require the fiscal overhead of hiring and training larger finance teams internally.
Outsourcing gives the ability to use experienced accountants and Certified Public Accountants (CPAs) with industry expertise. Such experience is crucial when dealing with various regulations, which becomes particularly pertinent in the context of international trade.
Key Takeaways:
Most outsourced providers will offer tax law specialists, compliance experts, and fraud prevention.
By bringing experts into the system, the risks of expensive mistakes are reduced in terms of financial reports.
According to a McKinsey study, those businesses that maintain an expert group of financial managers report 25% fewer errors than those merely depending on an in-house group.
Outsourcing financial operations helps internal groups to focus more on strategic, rather than clerical tasks and increases the speed of their decisions.
Case Study:
A consulting company that outsourced their payroll and financial reporting reduced its monthly administrative workload by 15 hours, allowing leadership to focus on client acquisition and strategic planning.
With financial tasks streamlined, business leaders can respond quickly to market changes and growth opportunities.
Accounting errors result in heavy fines, delayed tax filing, and wrong financial projections. Outsource accounting companies maintain accurate records and have verification procedures to minimize errors.
Key Takeaways:
According to Forbes, small businesses incur an average of $5,000 per year in accounting mistakes. Outsourced accounting provides the following services:
Outsourced accounting services are easily scalable with the business’s needs. This is a necessity for businesses with fast growth or uncertainty in the economy.
Example
A seasonal business will require full-scale financial services during the busy season and only minimal financial support during the off-season. Outsourcing helps companies to scale financial services according to their needs and not waste any extra resources.
Outsourced providers can also quickly adapt to business expansions, ensuring that you’re equipped with the necessary financial support during high-growth periods.
Real-time financial insights and accurate reports are crucial for data-driven decision-making. An outsourced accounting partner can provide:
Outsourced financial experts provide market insights and historical data, enabling businesses to make informed strategic pivots during uncertainty.
Concern #1: Losing Control of the Financial Process: Outsourcing is not losing control. Professional vendors provide a dashboard and report periodically to ensure their clients are well-informed.
Concern #2: Loss of Data Security: Outsourcing firms maintain data security about finances as one of the major concerns. Legitimate providers offer data security, including:
Staff Domain is ISO 27001 certified, ensuring it upholds the commitment to the industry’s best practices in cybersecurity.
Concern #3: Knowledge Transfer Gaps: A comprehensive onboarding process means that transitions are seamless. Most providers develop knowledge bases and provide account managers who will ensure continuity.
In selecting an outsourcing provider, consider the following:
Industry Expertise:
The provider should be aware of the financial needs of your industry.
Certifications:
The accountants of the provider should be certified and have experience.
Technology Compatibility:
Their software should be compatible with your existing systems.
Client Success Stories:
Ask for case studies and reviews to determine their performance.
Pro Tip: Staff Domain’s industry-specific solution is designed according to the business’s specific financial needs, whether it is about payroll services or advanced financial reporting.
A logistics company outsourced payroll, tax filing, and cash flow management to a third party. Within 12 months, they realized:
They also experience more peace of mind knowing the financial tasks were being done with accuracy and completeness.
Outsourced accounting has become a relatively inexpensive practice promoting accuracy, compliance, and clarity in financial details. Partner with an experienced outsourcing provider like Staff Domain to get cost savings, informed decision making, and revenue growth.
Staff Domain‘s offshore outsourcing solutions connect your business to a highly experienced global talent pool for game-changing results. Effortlessly manage your offshore workforce with our comprehensive compliance, payroll, and HR support, and benefit from fixed, transparent pricing in your local currency. Contact us today or schedule a meeting with our sales team to quickly source the right offshore team for your business
Outsourced accounting involves hiring a third-party provider to manage financial tasks like bookkeeping, payroll, tax compliance, and reporting, offering expertise without the cost of an in-house team.
It reduces costs, improves financial accuracy, ensures tax compliance, and frees up time for strategic growth, while providing expert financial insights.
Yes, reputable providers use encryption, multi-factor authentication, and strict access controls, with many holding ISO 27001 certification for data security.
Look for industry expertise, certifications, technology compatibility, and client success stories to ensure reliable and tailored financial support.
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