Business is just not selling products and services. To run a successful business, you have to look after various operations and functions. One of these critical functions is accounting. Yet, many companies, entrepreneurs, and start-ups find it difficult to find an accountant. Mostly if the business owner has limited financial knowledge, it can be quite challenging to cater to accounting and finance.
Be it managing bank account operations or analyzing financial data, every business needs an individual with the right skills to deal with the accounting operations of the company. But hiring a full-time accountant is also a challenging task.
Today, more than 1/3 of small businesses depend upon outsourced accounting services in order to manage their finances. It might sound odd at first to outsource such an essential operation of the company to a third party. But outsourced accounting services come with many benefits.
Even if you feel that accounting and bookkeeping must be done by someone who is part of the company, you should consider whether you can afford to hire a skilful accountant and if you have the necessary skills already in the company to complete the job. Not convinced? In this guide, we will cover some services you can avail by outsourcing your accounting function. We will also shed light on the advantages you can get with these services.
Outsourcing is a process of recruiting another company or individual to undertake a business-related job instead of leaving it on an in-house team. In this way, outsourced accounting consists of hiring a service to manage accounting processes. This includes activities such as daily transaction coding, managing financial reports, and dealing with taxation.
Some companies use the term subcontracting for outsourcing since businesses sign contract with the services for a particular time. In some cases, outsourcing is also called Business Process Outsourcing (BPO), as the external company facilitates part or all of the business function. Here are some standard operations that can be performed by an outsourced accounting service:
Just like all the other forms of outsourcing, cloud accounting is also concerned with taking over the non-core activities of a business. The significant benefit of cloud accounting is that it uses state-of-the-art accounting applications in order to facilitate business operations.
These applications are usually integrated with bank accounts and other cloud-based systems like bill pay solutions. In this way, cloud accounting also saves a lot of time and cost. This is specifically beneficial for companies that have substantial financial operations, which can be burdensome to perform from desktop-based systems. On the other hand, cloud accounting can also help the company make sense of the accounting data.
Financial statements are crucial for all types and sizes of businesses. Accurate financial statements can decrease the interest rates on loans, keep track of the cash flow, and help the company in making data-driven decisions. Outsourced accounting services can make financial statement easy with the help of skilful individuals.
Many outsourced companies also use applications and other tech in order to reduce the risks of human error. Their services can be integrated directly into your bookkeeping systems. Outsourced accountants can also analyze your financial performance, evaluate the financial statements, and recommend solutions to improve it further.
Payroll outsourcing services can make it easier for the companies to manage the working capital, as well as cash flow, in an effective manner. In addition, payroll management services can help companies increase their organizational agility, maintain constructive vendor relationships, and determine areas for cost-saving.
It can be challenging to take appropriate decisions when it comes to managing finances. Therefore, payable outsourcing services can provide recommendations on how to deal with financial issues and fulfil strategic goals. In this way, these services can be particularly advantageous for businesses that have just started or don’t have a basic understanding of the finances.
A successful business relies on a significant cash flow operation. However, companies that have a limited understanding of financial processes can suffer substantially. In this regard, outsourcing accounts receivable can be very beneficial. For instance, businesses can reduce their cash collection shortfalls and Days Sales Outstanding (DSO) by outsourcing these operations.
Companies can also ensure more efficient credit control and maintain healthier accounts. On the other hand, companies can also get visibility into receivable transactions, increase the collections by providing extensive credit control, and enhance the overall productivity of the business operations.
Forensic accounting services are crucial if you want expert reviews in investigating and analyzing specific accounting situations. From regulatory scrutiny to anti-corruption measures and financial reporting, it can be very challenging for businesses to prevent suspicious monetary activities. This is where a forensic accounting service can prove to be useful.
With these services, investigations related to regulatory compliance, such as healthcare, can be performed. Investigations regarding bankruptcy can also be undertaken in order to prevent fraudulent activities. Claims of fidelity, misappropriation of assets, and employee fraud are also some areas where these services can be of great help.
As the name suggests, these outsourcing services are provided with chartered accountants. These services are full-fletch and comprehensive, dealing with a wide range of activities. Be it bookkeeping, payroll, or general accounting, these services can ensure that your company maintains a healthy financial condition.
Chartered accounting services can also help businesses in complying with the general regulations. Matters such as withholding tax returns and VAT can also be dealt with by these companies. Advisory services are perhaps the most essential feature of these companies, as they can help the business in understanding its financial conditions and make efficient decisions.
Tax preparation services are also well-known in the world of outsourcing. Compliance with tax laws and regulations is crucial for businesses in order to survive. However, taxation is not an easy matter to understand. Companies are usually lost when it comes to tax. They don’t even understand what regulations they need to follow when first establishing their operations.
In this regard, tax preparation services can help companies in managing their accounting and financial operations efficiently. The services can help the company achieve its financial targets, maintain profitability, and fulfil the taxation needs as required by the local and state law.
Businesses require accurate and efficient financial information in order to continue their operations. Access to detailed and constructive information requires reliable reporting and analysis. However, many companies are unable to undertake this function, especially when they don’t have enough time or skills to do so.
In this regard, managerial accounting and reporting services can help companies in accessing financial information and making effective decisions. This information can allow the management to identify risks, assess business financial performance, and formulate more effective business strategies.
Outsourced accounting and bookkeeping services rely on top-notch technology in order to handle financial operations. Be it accounts payable, management financial reporting, or daily transaction coding, these services use a variety of accounting systems in order to facilitate such operations.
Usually, these systems can be integrated into the existing processes of the companies. In this way, the accounting operation becomes much more efficient and cost-effective. For instance, if a payment has been made recently, its information can be updated on the system, which can then make the relevant changes in the system.
Every company is different and has varying needs. However, accounting and financial operations are critical to the success of every company. There are various reasons why a company may choose to outsource such an essential process to a third party.
Many companies are unable to spend time on each and every operation of their business. Regardless of the size and goals of the business, there are various operations that have to be considered every day to continue the company in a smooth manner, such as customer service, employee management, human resources, and dealing with vendors. Among all of these operations, it can be challenging for businesses to spend time managing their accounting activities.
Even if a business has time to deal with the finances, it might not have enough knowledge and skills to conduct the operation in a meaningful way. Companies tend to suffer, especially when it comes to reporting financial information and making sense of the data to strategize. In this regard, an outsourced accounting service can bring value on the table. These services are usually backed by experienced accountants who understand the dynamics of accounting.
Many businesses prefer to have an in-house accountant or accounting team. But it is apparent that extra cost has to be reserved in order to hire talented accountants and then retain them. Businesses that cannot afford to recruit more individuals can rely on outsourced accounting services since they are much more affordable. The cost can also be saved by freeing the limited resources available to the company.
If the business is growing substantially, its sales and cash flow must be boosting as well. With this, the business might need more resources to handle the revenue and deal with financial work. This burden can be effectively managed by an outsourced service if the company does not have enough resources to manage it.
The individuals who provide outsourced accounting services are not only experienced in their work, but they are also trained and educated in the field. They understand how businesses can leverage their financial performance and improve it further. In this way, it is always advantageous to hire an outsourced accounting team, as it can help the company understand its finances and make intelligent financial decisions.
Accounting services for small business in Singapore are becoming very prominent. One of the most significant benefits of these services is that they can help businesses in managing the workload. You won’t have to hire another individual for the accounting function as well. Outsourcing companies have talented people in their teams, which ensures that you will be receiving professional services only. In case of any issue, the outsourced company can provide help in making informed decisions as well.
There are other operations of the business that can be outsourced. For example, many companies rely on a human resource services company to provide support in functions such as payroll and health insurance. On the other hand, some individuals rely on virtual assistants to manage their daily activities. Customer service is another operation that can be outsourced and managed by professionals in the fields.
If your business wants to manage its financial performance effectively, outsourcing is a good option. Let us know if you have availed such services or looking forward to doing so.
When you are going to start your business in Singapore, a competent company secretary is...Read More
To properly run your business, you must have an experienced corporate secretary. You could already...Read More