As
a business grows, so does the amount of paperwork that distracts the
business owners and operators from their main line of work. Government
regulations, contractual obligations and other rules quickly add up to
create full time responsibilities that absorb all your energy and leave
no space for research, development and enjoying the past success of the
organization.
Outsourced Accounting and Bookkeeping Services
How can one improve efficiency without
creating a major financial strain? Many companies have found that
increasing their in-house financial management and accounting
capabilities does not help in streamlining work and decreasing the
amounts of paperwork and unnecessary bureaucracy. In fact, it is easy to
find examples where such expansion would lead to slower growth, lower
employee job satisfaction and morale, missed developmental opportunities
and unhappy clients. Outsourced accounting is another option that is
becoming increasingly popular due to the apparent favorable cost-benefit
ratio.
Importantly, outsourced accounting and
financial administration used to mean moving only one or two of the
activities that fall within these spheres out. In the past, a company
would decide to outsource its more basic accounting processes, such as
payroll or accounts payable and receivable. What happens now is that the
cost benefit becomes increasingly greater when higher level accounting
and finances work, such as budgeting and internal audits, is also
outsourced – preferably, with the same contractor. One of the reasons
for this further reliance on outsourced accounting is the fact that more
and more companies are satisfied with the level of assistance they
receive from their outsourced accounting firms, which improves
confidence and encourages deeper cooperation.
Streamlining Processes
Another reason, according to Forbes,
is that it is much easier to streamline processes and make them more
efficient and transparent when the accounting is, in fact, outsourced.
Beginning their new relationship with the external accountant, a company
is forced to make their reporting simpler, eradicate unnecessary
information exchanges, improve communication flow, and adhere to the
best practices in the area. Simply put, outsourcing such an important
part of your operations as finances or accounting helps you make a fresh
start in many other things as well – and fresh starts are good for the
company’s long-term prosperity and success as valuable lessons in
efficiency and being to the point.
Quite often, a smaller business that is
looking to expand its main line of work is being constricted by the fact
that such an expansion would inevitably lead to more accounting
headaches and a greater number of regulations to comply with and reports
to make. At the same time, larger companies rely on state of the art
information technology to streamline processes and avoid the pitfalls of
too much reporting and cumbersome accounting. Importantly, with
outsourced accounting the situation is changed dramatically. By
outsourcing accounting and finances to a new level, a small (or smaller)
business can make use of the outsourcers’ technological capabilities
and expertise without having to dramatically increase or change their
internal knowledge scope, training, allocation of resources or attention
focus.
This is perhaps the fundamental issue
to understand about the increasing success and popularity of outsourced
accounting – the cost-benefit factor is basically impossible to
determine precisely, but it is certainly in the outsourcing business’s
favor. Everything points to the fact that outsourcing accounting
improves workflow and project management, streamlines communication,
saves money, frees up personnel and other resources, and gives everyone
access to technology and methodology that was earlier the prize of only
the largest corporations out there.
New Directions in Development
The powerful and diverse information
technology and expertise in the hands of the outsourced accountant can
give a business or organization a new developmental impetus like few
other things can. Outsourced accounting and financial administration, if
done holistically, improves cash flow analysis, automates previously
time consuming processes, increasing compliance with various rules,
policies and regulations, diminishes the human error component and,
overall, helps a business grow in its main line of operation.
The old stigma concerning outsourcing
such an important component as accounting and finances is quickly fading
into the past as more and more small and medium-sized business realize
the favorable cost-benefit ratio and full potential that outsourced
accounting holds for their long-term development, growth and prosperity.
Around the globe, businesses and reputable publications are reporting
this new paradigm to be working successfully, as information technology
allows everyone to share in the new possibilities previously reserved
for the select. Outsourced accounting is no longer about fear or
uneasiness. It is now about moving forward to greater success.
Featured images:
- Image source: MyBlogGuest platform
This article was written by James Abumere, who outsourcced accounting for his company and is glad for it.
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