Accounting and bookkeeping are essential functions of every business. As your business expands, you could find yourself buried in the books, dealing with payroll, incomings and outgoings, tax returns and other tasks.
Outsourcing your accounting function is a great way to reduce costs as well as unshackling yourself to concentrate on growing your business and improving your products or services.
Here are some great reasons to consider delegating accounting and booking functions to a dedicated expert third party.
Concentrate on what matters
When you outsource accounting functions, your business can allocate more people, resources and, most importantly, time to core business functions and growth.
Small and medium-sized businesses have fewer resources than their larger competition and can often get bogged down when handling accounting functions in-house.
By outsourcing these functions, you can get a scalable and competitive package that suits your needs.
This will free you to concentrate on what matters, growing your business, making new contacts and developing new leads and having the time to think about new product or service ideas.
Leave it to the experts
No one starts a business with the end game of crunching numbers on the weekend or having to divide duties with the receptionist who has a better head for arithmetic than they do.
In many small companies, bookkeepers and accountants may have other tasks to do, or they may not have even had formal training. One of the biggest dangers of in-house attempts at accounting and bookkeeping functions is that of making mistakes. This can be crippling if it happens at tax return stage.
When you outsource these functions, you put your business in the safe hands of trained professionals who live for numbers.
Just like any other business, accountancy firms need to make sure that their reputation is untarnished. As a direct result, there are many fail-safes and safety nets in place to make sure that no errors are made and that any due reports or payments are made incorrectly and in a timely manner.
When you outsource your accounting and bookkeeping functions, you can rest assured that there will be more than one pair of eyes making sure that all your accounts are in order with teams cross-checking each other’s work.
There will be second and even third checks by senior accountants to be absolutely certain that everything is correct.
The cloud and modern technology
It’s 2018 and the development of software over the past few years has been incredible. That being said, up-to-date cloud-based accounting software may seem to be an extra expense that can be avoided.
As a result, many small businesses find themselves in a situation where they are using antiquated software, or even spreadsheets to try and get the job done.
Modern accountancy firms all invest in cloud-based technology. One of the biggest benefits of engaging a third party which uses such software is that you will also be given access to it, wherever you may be.
That way, you can simply log into your account and will be able to check exactly where you stand in real time. Modern cloud technology allows accounting firms to organise all your records and documentation for future use with ease of access, rather than rifling through filing cabinets to find folders.
If you are ever selected for auditing, cloud-based records are a lifesaver.
The cloud is not just about real-time data, numbers and organised filing of records.
Accountancy firms subscribe to software packages which analyse data to find business trends, areas of waste, the potential for growth, budgeting, forecasting and much more. If you outsource your accounting and bookkeeping functions, you can also take advantage of these opportunities.
Most accountancy firms offer scalable packages, so you might want to order a twice-yearly insights check, instead of monthly reporting. If you commissioned a third party to compile such a report, it would cost you an arm and a leg. But because modern accountants are fully integrated in terms of software and insight analysis, they have the data at their fingertips and simply generate an easy to use the report for your business.
Outsourcing accounting and bookkeeping to a third party could save you a substantial amount of money. Employees are expensive, especially ones dedicated to a single function, such as accountants and bookkeepers. Not only do you have to pay their wages or salary, but you also have payroll tax and benefits to think of.
By farming out these functions, you will also save on having to pay for computer hardware and software.
How to choose a good service provider
There are a few things you should keep in mind before choosing a service provider.
Experience and track record – Experience in the field is something that you should always look for, no matter what service you are seeking.
Look at the firm’s track record – an internet search can reveal a lot. If you are satisfied, contact them and ask them about their experience. Tell them what your business is about and ask if they have provided services to a similar venture. It is a good idea to match their experience to your needs.
Technology – Making the leap to the cloud can be a very big step for any business and reassurance of data protection is essential. Ask any potential provider what software they use and ask them about their internet connection.
Make sure to ask about their security arrangements about your data and most importantly, ask them about disaster recovery and secondary data backup.
Costs – One of the main reasons why businesses outsource accounting and bookkeeping is to save money. Make sure that potential providers are upfront about what they are offering and how much it will cost you. Third party firms are aware that businesses want to save money, so they should automatically offer you something that offers cost benefits.
As with any additional fees and termination terms. Also, avoid any providers that try to tie you into a restrictive contract.
Customer service – You will be paying for these services and you want value for money. The firm you choose should always be ready to help and happy to pick up the phone or answer an email if you need assistance. You should feel comfortable with them. Just like any other purchasing decision, go with your gut. If something doesn’t feel right, then it’s probably better to look elsewhere.
Dexterous Group Founder
About Dexterous Group
Dexterous Group is a Sydney-based accountancy firm helping businesses grow. We simplify and manage accounting needs through scalable, fixed fee packages so you can focus on your business. Dexterous also offers payroll, business insights and reporting services.