Many businesses are used to working with full-time accounting, which reflects the natural desire for control and the ability to call an accountant to their office at any time. Nevertheless, external accounting has been developing successfully for a long time. Another thing is the still low coverage of potential customers by such services.
Outsourcing means taking non-core functions out of the company, and entrusting accounting processes to professional service providers. More than a decade ago, 86% of companies in Western Europe used the services of accounting firms, and in the USA - 92%. Most often, it is considered a way to optimize current expenses like the organization of a workplace, payment for accounting computer programs and reference systems, costs for training and advanced training of an accountant, and remuneration for an accountant.
But if earlier accounting outsourcing was considered solely from the point of view of saving on full-time accounting services, now people are turning to it in order to achieve competitive advantages and reduce financial risks.
Benefits of accounting outsourcing
2. The transition to outsourcing frees the business from total dependence on the full-time chief accountant. With outsourcing, there are no situations when a full-time specialist is sick or goes on maternity leave when there is no one to calculate the salary, i.e. The company has no personnel problems.
3. The main feature of outsourcing companies is the quality of accounting and reporting. But it should be borne in mind that only large organizations can guarantee a “high standard”. The quality of service consists of several components: highly qualified employees, distribution of functionality, automation of accounting processes, and even a proactive position regarding tax planning.
4. In addition to maintaining tax and accounting records and preparing reports, outsourcing companies monitor the level of the tax burden, conduct an inventory of receivables and payables, and monitor the absence of cash gaps.
5. The client of an accounting outsourcing company always clearly understands what service and in what volume they ordered, how much it costs, and what they will get as a result.
6. Leading outsourcing companies insure their professional liability. Insurance is needed in case the client loses their money due to an outsourcer's mistake (in the form of fines, penalties, etc.). This is one of the key advantages of accounting outsourcing over full-time accounting.
7. Due to the optimization of business processes, the owners and management of the company get the opportunity to concentrate on the development of the main line of business.
Secondly, really worthy players remained on the market - those who, during quarantine and restrictions, managed to provide customers with an uninterrupted service process. Thirdly, during the period of self-isolation and daily changes in work, business owners and company executives soberly assessed the capabilities of regular accounting in terms of prompt reconfiguration of accounting processes, as well as its weaknesses.
Is it difficult to switch from in-house accounting to outsourcing?
If necessary, they should be ready to contact the accounting department directly. The accounting company should fix all agreements with the client in the contract and regulations of interaction. Thus, the manager clearly understands what set of services they receive and how much it will cost. The courier service should also be ready to facilitate the process of delivering documents to the office for the director.
It is also important to know how to take over the affairs of the previous accountant, and what documents to sign so that in the future the areas of responsibility between the previous and current contractors are clearly separated.
Before transferring accounting functions to a third-party organization, it is necessary to develop a plan for the transition to outsourcing. One of the most important points of this plan is the choice of an accounting service provider.
If you decide to switch to accounting outsourcing, we recommend that you study the scale of the provider company:
It is worth asking for a sample contract for accounting outsourcing and checking the limits of the provider's liability and the number of damages, as well as detailed regulations for the provision of the service. The level of manufacturability of the company and the protection of accounting databases, the availability of information security certificates that guarantee the confidentiality and security of data are essential.
It is also important to check the expiration date and terms of the company's insurance policy. You should also know that there is no single standard for the “accounting outsourcing” service on the market. Therefore, even for outsourcing companies close in rating and size, the service may have the same name, but the content may differ significantly.
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