How Outsourcing Your Accounting Can Save You Money
Production, advertising, marketing, sales, accounting, IT, human resources, and other divisions are all included in the typical business structure. The department manager oversees each division and answers to the CEO, president, or owner of the company.
The division of responsibilities ensures that everyone in the organization knows exactly what they are responsible for. This structure isn’t made for all kinds of businesses, though. Some companies choose to outsource some aspects of their operations because they lack the staff and resources to operate under such restrictions.
Due to the intricacy of the task and the expense of employing and maintaining an accountant, many firms choose to outsource their finance and accounting needs. A financial department, for instance, requires a minimum of five to six staff members, each with a distinct responsibility.
A comprehensive in-house finance and accounting department with positions like bookkeeper, staff accountant, accounting manager, controller, and CFO (Chief Financial Officer) may be necessary, depending on the size of your company. It’s easy to understand how these expenses may quickly mount up when you take into account the cost of establishing a whole department, which includes salary, overhead, benefits expenditures, IT, paid time off, and overtime.
How Outsourced Finance and Accounting can Save Your Money
Generally speaking, the cost of an outsourced financial solution is far lower than that of performing the same task internally. Finding, employing, training, and keeping finance professionals are the first expenses associated with creating and running an internal finance and accounting department. The second is the opportunity cost, which is the sum of all the possible benefits you lose when you concentrate on requirements that are outside of your area of expertise or don’t immediately result in income. Just think of what you could do in the time it takes to issue invoices, compile a financial report, and gather and evaluate financial data.
Using a Finance as a Service (FaaS) strategy, outsourced financial specialists have the know-how and technology to complete the same task more quickly and accurately, reducing fines and missed deadlines while adding more value to your company. The majority of accounting service providers in the market nowadays are proficient with contemporary automation technologies.
You may save money by using a finance and accounting outsourcing business that uses the Finance as a Service (FaaS) model.
Managing payroll
Monthly reconciling of your books with your business credit card accounts and bank statement
Maintaining comprehensive financial data that helps avoid various fines
Tracking expenses correctly to help you take advantage of tax deductions
Tax-ready books save time and cost for your accountant or CPA
Cash flow forecasting
Budget creation and management
Financial support and problem solving.
You may receive the newest cloud-based tools and technologies through outsourcing, which will help you be paid more quickly and handle payments more skillfully.
For less than the price of your company’s outdated equipment, a seasoned finance and accounting outsourcing provider can offer cutting-edge technology. You may get a current, real-time accounting examination of your cash flow with a few mouse clicks.
Comparing In-House vs Outsourced Accounting Services
Some advantages of having an internal finance and accounting department include complete control over the management of the books. Knowing how your company’s finances are doing is vital, but one of the finest things you can do is to delegate the tasks to a professional. If not, major problems might occur, some of which would be irreparable.
The Cost Factor
Employing, properly educating, and staffing internal accounting teams often costs businesses two to five percent of their total sales. If you examine the figures, you will see that hiring full-time staff is more costly. You should take into account a number of overhead costs in addition to your required wage, such as paid time off, insurance, office space and equipment, holiday pay, continuing education, etc.
It is more cost-effective to choose the outsourced alternative when you compare the expenses with the cost of hiring a F&A staff that is outsourced. While some outsourcing firms may charge on an hourly basis, others may provide a flat cost (all-in-one monthly price structure).
Accounting Quality
Complex but repetitive duties are involved in finance and accounting, and those in charge of them need to maintain their industry knowledge, mathematical prowess, and attention to detail. Compared to hiring an accountant in-house, an outsourced accounting staff has a wealth of experience and expertise. However, your in-house accountant’s errors might be costly and go unnoticed in the workplace.
Hiring and Training
How much time and money does the hiring process cost when it comes time to bring on a new employee? It may be taxing to go through the complete hiring process, including advertising the position, interviewing applicants, onboarding them, and educating them on policies and processes. However, by using a professional staff that has been outsourced, your company eliminates the need for continuous onboarding and training because the team already has tested methods in place.
Let’s say a key member of your accounting staff, such as your accountant, abruptly departs the organization. If that is the case, you will need to recruit a replacement quickly and invest time and effort in acquainting them with your accounts and procedures. Outsourcing makes it simple to swap out one person for another from their pool of financial experts.
Bottom Line
As you can see, outsourcing accounting and finance tasks has several advantages that may save your business a significant amount of time and money. As a more practical, effective, and economical option to an internal F&A department, many companies are now switching to outsourced finance and accounting services.
The Boom HK may relieve you of laborious and manual accounting duties, which will make you feel less stressed. Consero, one of the top FaaS service providers in the globe, offers our clients a wealth of accounting and business advising tools.