Outsourcing of accounting services is the transfer of the functions of full-time accounting services to third-party specialists. The meaning of outsourcing is to take non-core functions out of the company by entrusting accounting processes to professional accounting service providers. In this article, we will tell you about all the advantages of outsourcing accounting and its benefits for business owners and the company as a whole.
Why should you outsource bookkeeping and what are the benefits?
Accounting outsourcing is often seen as a way to optimize ongoing accounting costs. But if earlier accounting outsourcing was considered solely from the point of view of saving on full-time accounting services, now they turn to it in order to achieve competitive advantages and reduce financial risks. Most importantly, outsourced bookkeeping allows business owners to focus on the business.
The main advantages of bookkeeping outsourcing are:
1. Operational efficiency
Accounting outsourcing is a mechanism consisting of highly qualified employees: chief accountants, accountants, internal auditors, treasurer, and other specialists. Well-established internal control in all areas of accounting eliminates errors and the risk of additional charges.
2. No staffing problems
The transition to outsourcing frees the business from total dependence on the full-time chief accountant. With outsourcing, there are no such situations as the chief accountant becoming ill, the accountant going on maternity leave, or the payroll calculator being on vacation.
3. Quality of accounting and reporting
The main “trick” of outsourcing companies. But keep in mind that only large accounting firms can provide quality. The quality of service consists of several components: employees, distribution of functionality, automation of accounting processes, and even a proactive position regarding tax planning.
4. Pay for what you get
The client of an accounting outsourcing company always clearly understands what service and in what volume he ordered, how much it costs, and what he will receive “at the end”.
5. Financial guarantees
Leading outsourcing companies insure their professional liability. The sums of insurance are calculated in tens of millions of rubles. Insurance is needed in case the client lost his money due to an outsourcer’s mistake (in the form of additional charges, fines, penalties, etc.). This is one of the key advantages of accounting outsourcing over an in-house accountant.
Types of accounting outsourcing
The list of accounting services offered by market participants is not limited to tax and accounting. The provider can completely take over all the functions of full-time accounting service, or it can serve only specific areas. In addition, ordinary accountants can be left in the company, and the management and control over their actions can be transferred to professionals. Lots of options. The larger the client and the outsourcer itself, the more different combinations of cooperation are implemented within the framework of accounting outsourcing.
1. Consulting
Even the most advanced chief accountant, from time to time needs professional advice. For example, when you need to understand some narrow issue or clarify the specifics of processing specific transactions (for example, when exporting or importing). Often, company executives resort to consulting in order to control the work of regular accounting from the outside.
2. Accounting outsourcing of sites
Not all bookkeeping can be outsourced, but only a part of accounting functions. This approach allows the CEO or owner to retain control over accounting processes, relieve employees from routine work and perform similar operations that do not require high qualifications, and also reduce the accounting staff. The most popular areas for accounting outsourcing:
- Payroll
- HR records management
- Cash transactions
- Primary processing
- Settlements with accountants
- Expense reports
- Export-import operations
- Mutual settlements with contractors
3. Comprehensive accounting outsourcing
With the “complex”, the company completely abandons regular accounting, transfers the accounting database to the provider, and receives a full range of services: accounting, calculation of taxes and payments to employees, tax reporting and funds, preparation of payments in the client bank, processing, verification and storage of all primary documents.
Additionally, outsourcing accounting can provide the client with related services: tax optimization projects, management training, implementation of electronic document management, and finalization of the accounting system. All these services are not included in the comprehensive package, so you will need to pay extra for them.
4. The provider performs the functions of the chief accountant
Sometimes the owners decide to leave ordinary accountants on the staff, as good performers, and to transfer only management in the financial service to accounting outsourcing. The outsourced chief accountant helps to correctly set up and formalize accounting processes.
The choice of one or another type of accounting outsourcing depends on the specifics of the company, its finances, and the willingness of the management to release the financial “heart” of the company – accounting – from total tutelage.
The first red flags: when to think about accounting outsourcing
Astute and advanced businessmen don’t wait until the situation becomes a stalemate. They begin to think about accounting outsourcing as soon as they realize that in-house accounting is “cemented” and hinders business development. This is evidenced by the following signs:
1. The accounting department doesn’t want to take responsibility, the accounting function is understood narrowly: keep accounting records, calculate taxes, and salaries, submit reports to the state – that’s all!
2. Accounting works “for the tax”, and not in the interests of the company. In dealing with inspectors, he takes a passive position, he is more likely to fulfill any insane requirement of the Federal Tax Service, rather than defend the interests of business.
3. Accounting has turned into an accounting “appendage”, and it is impossible to get help from it outside of accounting and tax accounting. For example, expert advice on safe tax optimization options.
The accounting department does not have time to restructure its work to the changes taking place in the company, and prefers to work “the old-fashioned way”, sabotaging innovations.
It is almost impossible to find a universal specialist who understands not only taxes and accounting, but also related issues, and, moreover, with a proactive position. It is easier to choose a good outsourcer and get a team of professionals who will work in the interests of the business.
