As a business owner, you are probably asking yourself a lot of questions like: What are my main priorities? What should I do myself and what should I outsource?
Having healthy finances is of course always a top priority: your business needs cash to continue growing, and the investors - including yourself - expect to get a return on their investment.
Yet trying to manage all your finances and accounting yourself can actually be harmful.
Your time may be of better use elsewhere like developing your products or services, finding new customers, etc. Also if accounting issues start to pile up, managing everything can quickly become overwhelming. Finally doing your accounting and taxes yourself - or with an inexperienced finance person/team - may lead to errors and expose your company to compliance issues and significant tax exposures.
In this article we will see why outsourcing your accounting is probably the best solution for your growing business!
What is Outsourced Accounting?
Outsourcing refers to hiring a third-party service provider to perform one or multiple business tasks in order to upgrade your operations and achieve your business goals.
Businesses often decide to outsource business processes that are outside of their core business like Accounting. Getting a competent Outsourced Accounting service provider will ensure smooth finance operations by allowing you to properly :
Manage payroll and ensure correct remittances to government agencies
Reconcile your books monthly with your bank account(s) and business credit card(s)
Track expenses and help you take advantage of tax deductions
Maintain comprehensive Financial Statements and Reports to help you make sound business decisions
Prepare and file tax returns and ensure overall tax compliance
Forecast your Cash-Flows
You can decide whether you want to outsource all of these accounting-related activities or only a specific task or process. When contracting with an Outsourced Accountant, it is essential that you agree on a clear scope of work.
Benefits of Outsourced Accounting
1. Save Time and Money
Hiring an employee is a rigorous process. It takes a lot of time to find someone that fits your job requirements and your company culture. Also hiring employees is costly as you need to consider purchasing laptops, allocate a portion of your office rental, increase your HR and supervisory requirements, etc.
With Outsourced Accounting, you eliminate this tedious recruitment process. The monthly costs are also fully predictable and most of the time lower than recruiting an internal employee or team.
Also, Outsourced Accounting brings high flexibility (provided that the service agreement contract is well-prepared). While it’s hard to significantly lower or increase the workload of an internal employee/team your Outsourced Accountant should be able to do so quickly with fair fees variation. Also in case of termination, letting an employee go is usually way heavier and more costly than terminating a service agreement with your Outsourced Accountant.
2. Access to Expert Advice
If you are not an accounting professional yourself - or if you hired an inexperienced person/team due to budget constraints - there is a high probability of errors and financial reporting mistakes being made. This can lead to high penalties and even put the entire business at risk.
Also, there are chances you are not maximizing all your tax deductions and benefits!
By teaming up with an Outsourced Accounting firm - that is up-to-date in every latest regulatory change and requirement - you will be able to minimize errors and tax payables.
3. Automation and Cloud-based Technologies
Using the services of modern Outsourced Accounting providers will give you access to your real-time financial performances through automation and cloud-based technologies. Some of the smart tools include:
Invoice automation using Optical Character Recognition (OCR) engine
Automated Bank statements synchronization with your bank
Smart Bank Reconciliation tools
Automated Financial Reports
Proseso Consulting - Your digital accounting and finance consultant focusing on growth
Proseso Consulting provides tailored business advisory and finances managed services (bookkeeping and accounting, outsourced and automated payroll, tax compliance, financial reporting, etc.). We are implemented in the Philippines and in France and our objective is to support the projects of ambitious companies and professionals. We are here to help you achieve your long-term business goals!
Ninoy Salmon is a seasoned business and finance professional with extensive experience working with both fast-growing startups and companies in the Philippines and around the world.
This blog article does not constitute professional or legal advice. It is only intended to provide general information on a subject.