Accounting Outsourcing Services: What Is It and How Can It Benefit Your Business?

By Cam Velasco

CEO & Co-Founder
Published: Mar 28, 2024
Thinking about accounting outsourcing services? In this article we'll provide a quick overview to help you understand why it might be a good move for your business.
Close-up of a person's hand using a calculator, with financial documents spread out on a desk.

Thinking about accounting outsourcing services? Here’s a quick overview to help you understand why it might be a good move for your business:

  • Save Money: Avoid the costs of hiring, training, and equipping an in-house team.
  • Access Expertise: Benefit from the knowledge and skills of accounting professionals.
  • Focus on Core Business: Free up time to concentrate on what you do best.
  • Enhanced Reporting: Get accurate and detailed financial reports.
  • Risk Management: Stay compliant with laws and regulations, reducing legal risks.

Outsourcing your accounting tasks to experts can lead to significant benefits, including cost savings, access to specialized knowledge, improved business focus, better financial reporting, and reduced risk of non-compliance. Whether you’re a small or medium-sized business, understanding how outsourced accounting works and what to look for in a service provider can help you make an informed decision.

Problems Businesses Face With In-House Accounting

Doing accounting yourself can be tough, especially for small businesses. Some issues include:

  • It’s expensive to hire good accountants
  • You might not have the know-how to make smart money decisions
  • Keeping up with rules and regulations can be a headache
  • It’s hard to adjust your accounting needs as your business grows

Outsourcing your accounting can give you access to expert advice without the cost of hiring a full-time accountant. Plus, you get the latest tech and stay up-to-date with laws.

Benefits of Accounting Outsourcing Services

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Outsourcing your accounting work can really help your business in many ways, like saving money, getting help from experts, doing things more efficiently, improving your financial reports, and avoiding risks.

Cost Savings

When you outsource accounting, you don’t have to spend as much on things like hiring accountants, paying for their benefits, training them, or buying computers and software for them to use. You just pay for the accounting work you need, which can help you save a lot of money, especially if you’re a small or medium-sized business.

Access to Specialized Expertise

Accounting firms that handle outsourced work have experts who know a lot about taxes, checking financial records, planning, and more. Getting this kind of expertise in your own business would cost a lot. Outsourcing lets you tap into this expertise whenever you need it, which is really useful.

Improved Efficiency

Doing everyday accounting tasks like bookkeeping and handling payroll can take up a lot of time and resources. By outsourcing these tasks, your team can focus more on the main parts of your business and make better decisions. This makes your business run smoother and faster.

Enhanced Financial Reporting

Good accounting firms provide detailed and correct financial reports that follow the law. These reports can give you a clear picture of how your business is doing and help you make smart decisions for growth. Doing this kind of detailed reporting on your own can be hard if you have a small team.

Better Risk Management

Experts in outsourced accounting are always up-to-date on the latest rules and best practices. They can help make sure your business follows all the legal requirements, which lowers the risk of getting fined or damaging your business’s reputation. A good accounting partner can also suggest ways to avoid other financial risks.

 Accounting Outsourcing Services Potential Drawbacks

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Outsourcing your accounting work can come with some worries, but you can tackle these with smart planning and keeping in touch.

Establishing Clear Expectations

When you start working with an outsourced accounting team, it’s important to be clear about what you need from them. Talk about what tasks they’ll do, what kind of reports you’ll get and when, who will look after your account, and how you’ll check if things are going well. Clearing up any questions or doubts early on helps make sure everyone’s on the same page.

Ongoing Communication

Keep talking to your accounting team regularly, even after things are up and running. This helps you keep track of how things are going, sort out any issues quickly, change plans if needed, and work better together. It’s a good idea to have these chats monthly at first. Later on, you might only need to catch up every three or six months.

Make sure there’s an easy way to share files and information. Using online tools like Google Drive or Dropbox can make it simple for everyone to access what they need.

By being clear about what you expect right from the start and keeping the lines of communication open, you can avoid common worries like feeling out of control, unexpected costs, or concerns about your data being safe. The main thing is to talk things through clearly at the beginning and keep checking in with each other. This way, you can enjoy the big benefits of outsourcing your accounting without stress.

Choosing the Right Partner for your Accounting Outsourcing Services

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Finding the best company to handle your accounting is key to getting the most out of it for your business. Here’s what to look for when picking one:

Services Offered

Check if they offer what you need (like bookkeeping, payroll, tax work, etc.). Make sure they know how to work with your type of business and its size. Also, see if their software is a good match for your systems.

Key things to ask potential providers:

  • What services do you offer?
  • Have you worked with businesses like mine before?
  • What accounting software do you use? Can it work with my systems?
Security Protocols

Keeping your financial info safe is super important. Look for their security badges (like SOC 2). Ask if they protect data and who can see it. Find out how they back up data and tell you about any security issues.

Questions to ask:

  • How do you keep client data safe?
  • Do you use encryption and control who can see the data?
  • How do you tell clients about security problems?
Experience

Companies that have been around longer usually do a better job. Look for their accountants’ qualifications and how long they’ve been in business. Asking for feedback from other clients can give you a good idea of their service.

Look for:

  • At least 5 years in business
  • Accountants with certifications (CPA, CA, CMA)
  • Good reviews from clients
Pricing Models

Look at how they charge, like:

  • A set monthly fee
  • Pay by the hour
  • Different levels of service for different prices

Make sure you know what you’re getting to avoid unexpected costs. The best deal fits your budget and what you need.

Ask potential partners:

  • How do you charge?
  • Do I need to commit to a certain time or amount?
  • What’s included in the price?
Comparison Tables

Here’s a simple table to compare different accounting outsourcers:

Pros of Accounting Firm: More services, better security, more know-how

Pros of Individual Accountant: Less expensive, more personal touch

Think about what you need and how much you can spend to decide which is best for you.

Taking your time to check these things will help you pick the best company to help your business grow and keep you from running into problems with outsourced accounting. Talk to a few different companies to compare what they offer before you choose.

Accounting Outsourcing Services: Conclusion and Key Takeaways

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Hiring an outside company to do your accounting can really help your business, no matter if it’s big or small. It means you get to work with experts without having to hire more people, saving money and making things run smoother.

Here are the main points about why outsourcing your accounting is a good idea:

  • Save Money: You don’t have to spend on hiring, training, or benefits for an in-house team. You only pay for what you need.
  • Get Expert Help: You’ll have access to people who really know their stuff when it comes to money and accounting.
  • Work Smarter: Your team can focus on big-picture stuff while the outsourced accountants handle the day-to-day numbers.
  • Better Reports: Get clear reports and advice from experts to help you make smart business decisions.
  • Less Risk: With professionals handling your accounts, you’re less likely to run into legal or security issues.
  • Grow Easier: It’s simple to adjust the services you get as your business changes, without the hassle of hiring or firing.

Thinking about what your business needs, how much help you want with your accounts, and what risks you’re facing can help you decide if outsourcing is right for you. It’s all about focusing on what you’re good at and letting specialists handle the rest.

When picking a company to work with, make sure they know what they’re doing, use secure technology, offer the services you need, and understand your business. With the right partner, your finance department can do more than just crunch numbers – it can help your business grow.

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Cam Velasco

CEO & Co-Founder

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