Top 10 Benefits of Outsourced Accounting Services to Automate Bookkeeping Tasks
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Companies always search for methods to increase their bottom line in today’s fast-paced commercial world. Outsourcing accounting tasks is one approach to do this. According to Research and Markets, the estimated value of the accounting outsourcing market was $43.1 billion in 2022 and is expected to grow by $68.8 billion in 2030 at a CAGR of 6.0%. Although they have grown in popularity recently, but what effect can outsourced accounting services have on a business’s bottom line?
This blog post will discuss the advantages of accounting outsourcing and how it can boost revenue.
A Comprehensive Overview of Outsourced Accounting
Choosing a third-party accounting firm to manage bookkeeping and financial operations is known as outsourced accounting. This covers routine accounting tasks, including financial reporting, paying bills, and processing payroll. By outsourcing these tasks, companies can lessen the stress of handling their finances and concentrate on their primary business operations. 64.4% of SMEs used automated software to revolutionise their financial tasks.
These are ten advantages of outsourcing accounting that your company can profit from.
Top 10 Perks of Outsourced Accounting
Businesses of various sizes and in a wide range of industries can gain from using outsourced accounting services. Among the most notable are the following:
Businesses often select accounting outsourcing services due to their cost-saving benefits. The objective is achieved by reducing expenses associated with hiring an internal workforce. As a result, resources can be better allocated to the company’s essential functions.
Companies pay hourly or monthly wages for recruiting, onboarding, benefits, and insurance. Moreover, these concerns disappear if a firm hires an outside team for bookkeeping tasks. Outsourced accounting allows them to recruit more experienced staff for key company functions. Instead of supporting workers, firms might invest in sales associates to increase revenue and attract new customers.
The importance of an outsourced accounting firm depends on its scalability. When employing a third party to handle financial duties for your firm, consider the following factors:
- How much of the outsource accounting company is automated? Increased automation boosts the chance that your business will grow.
- Knowledgeable outsourced accounting services will know how and when to adjust their staffing levels accordingly. Only reputable, established companies can offer this expertise.
- Having clearly defined scaling methods allows businesses to offer a wide variety of services. Can their infrastructure support process-driven solutions?
3) Saves Time
Financial tasks that are being managed in-house can be outsourced to qualified accountants. Their expertise removes uncertainty from tasks like reconciliation, financial management, processing payroll, and handling debts. In addition, 91% of accountants say that outsourcing accounting tasks has enhanced their productivity.
The owner of a small firm might need additional time. A financial specialist with accounting system knowledge may handle these jobs, freeing up time for business development and other important work.
4) Expertise and Oversight
Correct transaction processing necessitates close attention to detail. A complete accounts receivable activity, including an outdated schedule, can be outsourced to a firm that helps firms track late payments and cash flow.
Moreover, a competent external accounting company can support collection efforts. Similarly, hiring seasoned experts to handle your accounts payable department has several advantages. For example, your invoices will be checked before being paid and delivered on schedule, not before the time.
5) Employees’ Flexibility
To be honest, completing the accounting procedure is not an hourly occupation. If a business has its accounting team, when the month-end close is done, they may find themselves with more time on their hands.
With the help of outsourcing, they can quickly add staff when necessary and lay off workers when their services are no longer required. Timely reporting of payments made to customers on a monthly basis is crucial during tax season. Thus, it can be accomplished by utilising outsourced accounting services.
6) Business Continuity
Accounting is a time-sensitive, vital business process, and any disruption to its operation can have negative consequences. When the accounting is impacted, the company could encounter delayed payments, the loss of crucial documents, and penalties.
For reliable and consistent accounting services, many organisations are turning to outsourcing firms that use cloud-based tools and advanced automation. By including a business continuity plan in the service agreement, the customer can also require the provider to meet specific service delivery deadlines.
7) Outsourced CFO
When necessary, a company can hire a third-party accountant to work for the Chief Financial Officer (CFO) role. Businesses will benefit from this since they will get a more thorough understanding of their financial situation.
8) Enhanced Data Protection
Most accounting and finance processes are computerised, creating significant confidential data. A corporation must protect such internal or client data. However, small enterprises and startups often take minimal data security measures, leaving them susceptible to cyberattacks and data theft. Security errors can damage the company’s reputation and lead to penalties.
Professional accounting organisations employ secure cloud servers with enhanced features like:
- Secure transactions
- Secure cloud data storage
- Provides better data backup and handling of emergencies
Businesses seek to outsource accounting services without doing their investigation due to their appealing advantages. Consequently, the vast majority of companies are unable to benefit from the arrangement fully.
9) Reduced Errors
As the owner of a company, they don’t need to have extensive knowledge of the many accounting services available. Hiring an internal bookkeeper, though, can cause issues.
Businesses that employ outsourced financial services get access to a staff whose only source of income is their accounting services. Moreover, the best accountants will manage companies’ financial assistance because they can’t afford unqualified applicants.
A trained staff of accountants dedicated to smooth financial procedures lowers the risk of an inexperienced accountant. These professionals can incorporate digital bookkeeping software into your infrastructure to reduce human mistakes.
10) Latest Innovation and Technology
The best-in-class outsourced accounting services use advanced technology and software. Modern finance technologies that provide real-time reporting are available to firms without requiring them to invest millions of dollars in recruiting and establishing an internal finance department.
The Future of the Automation in Accounting Industry
The utilisation of increasingly sophisticated technologies within the realm of accounting is witnessing a notable surge in years to come. The technologies, namely AI and cloud computing, possess the potential to enhance productivity significantly. Consequently, the demand for accountants to improve their interpersonal abilities shall arise. Nevertheless, it is imperative to consider certain factors as the accountant’s role expands beyond that of a mere strategic advisor.
- Instead of replacing accountants, technology will help them.
- There will be improvements in efficiency, precision, protection, and time management.
- Better insights will be available from accountants.
- Those accountants who are adaptable will be the most successful.
Will technology replace accountants? No, but as time goes on, their roles will alter. In order for accountants to stay relevant in the field, they should embrace technology. This includes keeping up with technological changes and adjusting accounting software to match firm needs while understanding advanced technologies.
How Can RecordMe Help?
You may be concerned with back-office management because of the time it takes away from more crucial business tasks. Hiring an experienced outsourcing firm is the smart step, and RecordMe, an automated accounting platform, fits into this context. You can get customised outsourced financial services at a reasonable price.
Do you still have questions regarding whether you should employ outsourced accounting services? Contact us, and our experienced accountants can assist you in making a decision.