When a venture is in its early stage, it is easier for the management to look after each and every aspect of its operations. A handful of staff can manage marketing, promotions, customer support etc. However, with time, its operations and workforce keep growing and so does the complexity of operations. It becomes necessary to hire separate vendors and third-party entities for various operational needs. Growing ventures opt for outsourcing various operations eventually and embrace Outsourced Accounting solution.
The basics of Outsourced Accounting Solution
Businesses of varying types are opting for outsourcing specific operations for convenience and boosting efficiency and accounting operations are no exceptions either. In the Outsourced Accounting Solution model, ventures sign up with external (often remote) expert entities to handle partial and complete accounting operations. They pay the external agency a certain amount for their services and these handle myriads of accounting services for the clients.
The external entities offering accounting outsourcing services have financial and accounting experts in their teams including qualified accountants and tax consultants. Their expertise and capabilities ensure entire accounting needs of clients are met properly.
Pros of opting for Outsourced Accounting Solution
Businesses from nearly all sectors nowadays opt for Outsourced Accounting service providers. This is not exclusive to large corporations and enterprises, but mid-sized and small ventures are also taking this route. Such ventures obtain advantages such as:
A cost-effective option
This is possibly the major factor prompting several thousand businesses to opt for Outsourced Accounting Services. You do not have to keep a dedicated accounting team to handle financial operations and taxation assessment of the company, to start with. There will be no need to pay for the remunerations of accounting staff and bear the cost of IT and other infrastructure as well. Also, it helps reduce operational costs.
Access to the outsourcing accounting solution experts-
Would you not like the accounting operations of your venture to be handled and analysed by veteran accountants and taxation professionals? That is what you get when you sign up for the services of an Accounting Outsourced Services entity. Such external accounting firms keep skilled and reliable accounting experts and they are capable of handling complex accounting needs of clients.
Ability to focus on core areas-
When your venture’s financial operations and accounting tasks are handled by an external entity, your staff can focus better on core operations. They do not have to worry about errors in audit and book-keeping etc. and focus on their tasks better. In the long run, the staff is able to maximize their output and productivity receives a solid boost.
Accessible financial investment advisor –
Businesses hiring ace Outsourced Accounting Services provider firms also get the advantage of having access to a veteran financial advisor. Such outsourcing partners not only help your firm in preparing tax reports and processing staff and vendor payments but also offer insight into the financial health of the venture. So, their expert insight and advice help you make strategic financial decisions pertaining to market expansions and mergers etc.
Enhanced data security-
The financial data of your venture must be kept safely, at all times. It contains valuable customer information as well as financial details of the venture. By outsourcing accounting solution tasks, this risk is largely mitigated. Top accounting outsourcing firms use feature-laden cloud solutions and secure encryption technologies for enhanced data safety. This offers peace of mind to the client entities.
Reduced operational hurdles-
By outsourcing the accounting operations of your venture, you are able to override numerous hurdles that businesses with in-house accounting teams face. For example, you are spared from the hassles of looking for a skilled accountant when the person handling the task resigns. Your venture’s accounting operations will not come to a halt if there is a disaster like another pandemic or an earthquake! These crucial tasks will still be handled and executed properly by a remote firm.
Scalability-
A remote accounting outsourcing firm offers scalability of operations. The accounting operation needs of your firm may change with time. For example, at the end of the financial year there can be increased activity. Such needs grow with venture growth as well. An ace outsourcing partner can cope easily with changing accounting workflow volume of the client firm.
Cons of opting for Outsourced Accounting Services
The inherent advantages of accounting outsourced not with standing, ventures opting for this route may have to cope with certain drawbacks too. These are:
Communication hurdles-
In some instances, ventures opting for outsourced accounting services may cope with communication loopholes. This can be caused by varying time zones at the client’s and service provider’s regions. Language barriers may also crop up here. Not all Offshore Solution providers are experts in specific languages prevalent in the EU.
Technological compatibility issues for Outsourced Accounting Services-
The software solutions and technologies used by the clients may not be familiar to the outsourcing entity at times and the opposite can happen too. To overcome this issue, the firm may have to spend time and train it’s staff well. It may also have to use a compatible cloud solution in this regard.
Differences in work culture, styles-
Every organization has a specific work culture and way of functioning. This is also affected by the region and cultural factors to an extent. The prevalent work culture of a venture may or may not gel with that of an external outsourced service firm, sometimes. For example, in countries like India companies stay closed on occasions like Diwali but in the USA it is not a holiday. Also, the time zone difference between clients and outsourcing firm’s countries may hinder real time communication to an extent.
Should you opt for Remote Staffing Services?
Choosing an external agency to handle the accounting services of your venture eventually comes with its share of gains and risks. However, on finer analysis, the advantages of choosing Outsourced Accounting Services outshine the few drawbacks. So, the bottom line is you have to be careful in assessing the available contenders in the sector and picking the apt one. Check such agencies thoroughly for potential risk factors and resolve all your doubts about their services before finalizing the deal.