Hiring a skilled, qualified, and reliable in-house accounting team can be costly and time-consuming. However, outsourcing accounting and bookkeeping functions can be rewarding for startups and established businesses alike. It’s also cost-effective, especially for small businesses with tight or limited budgets. This article outlines six eight reasons why your startup should outsource accounting.
1. Access to expertise
Outsourcing accounting allows your startup access to bookkeeping and accounting expertise based on your business needs. The experts are well-trained to implement accounting best practices, including adhering to GAAP standards, proper record management and reporting, meeting payroll requirements, and more. Outsourced financial professionals understand the tools and systems your company needs and the data it should accumulate. They execute various accounting tasks, including bookkeeping, data entry, tax preparation, data analytics, and financial reporting.
Whether you want a comprehensive assessment of your income statement, statement of financial position, margins, revenue, or expenses, outsourcing to a business accounting company provides your organization with the necessary expert accounting services for improved operations.
2. Eliminate recruitment costs and time
Recruitment processes can be quite rigorous. They require resources to manage, including developing a recruitment strategy, advertising, choosing applicants for interviews, interviewing, and onboarding select candidates. Hiring processes consume your business time, are costly, and your new hires will need your time too.
Outsourcing companies are responsible for advertising, vetting, and hiring a reliable accounting team you can depend on. With outsourced accounting services, your startup can save the time and money it would otherwise spend looking for skilled and qualified in-house accountants.
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3. Save money
An in-house accounting team might seem less expensive based on an hourly wage. Nonetheless, when you consider the cost of recruiting, onboarding, training, benefits, turnover, supervision, and payroll taxes, you spend much more. With an in-house team, you’ll also need office space, equipment, stationery, software, and other things required to run an accounting department. Outsourcing accounting eliminates the need for all the costs associated with running an in-house accounting team, saving money.
4. Promote excellent business practices
Successful companies focus on details. This implies that they should comply with all federal and state tax regulations. They must also implement best practices and operations while ensuring compliance doesn’t compromise productivity.
An outsourced accountant can help you handle these elements simultaneously. Outsourcing companies have the proper analytical infrastructure and accounting software to ensure effective operations. With outsourced accounting software, you’ll have access to the most suitable accounting software to determine your business’s most relevant KPIs.
5. Scale your business
Outsourcing accounting is a wise decision, especially when growing or scaling your business. It gives the freedom to scale your services without lag. For instance, if your accounting and bookkeeping tasks exceed one accountant’s responsibilities, you can quickly hire more without going through the time-consuming and expensive hiring processes. Additionally, outsourced accounting solutions are charged based on the services you need. This means you can scale down or up according to your changing requirements.
6. Access automated accounting technology
Automated accounting technology can be an expensive investment for startup businesses. For businesses struggling to maintain their overhead costs at the lowest, investing in recent accounting technologies is out of the question. Traditional accounting practices are time-consuming, prone to human error, and increase the risk of internal fraud.
However, outsourced accountants have the right software and are always up-to-date with the latest technologies. This saves time, minimizes human errors, gets you real-time reports, and helps catch potential issues and resolve them before escalating. Outsourced financial experts have access to automated accounting software, which reduces the risk of internal fraud.
7. Better security
Leaving your bookkeeping and financial functions to outsourced accounting professionals enhances your records and books’ security because they use meticulous safeguards to ensure confidentiality, data backup, and access control. In-house accounting can be challenging when addressing information confidentiality and security from hackers, theft, and fire. Reliable and reputable accounting service providers are an excellent way to address the vulnerabilities of an in-house accounting team.
8. Increased business efficiency
If your startup is growth-focused and has new plans in the pipeline, outsourcing accounting and bookkeeping can come in handy. With outsourcing, your CFO can help you make informed financial decisions, mitigate risks, and plan future investments and projections. It enables you to establish a robust roadmap for your business’s economic growth.
Maintaining an in-house accounting team can be challenging for small businesses. However, leveraging outsourced accounting can help your startup reap these benefits.