US small businesses face challenges every financial year when it comes to accounting. In a 2015 survey, 71% of business owners said they outsource accounting services. In the same report, 50% said they would outsource accounting services. In a 2013 report, 38% of small businesses revealed they spend more than 80 hours dealing with finances. This translates to two full work weeks a year spent on bookkeeping and taxes. If the 80 hours a year went into marketing the business, think how much growth the business would experience. As a business owner, you know there is a better way to help your business make more money and grow faster. We are talking about outsourcing accounting services. This article highlights the outsourcing pros and cons of outsourced accounting services. We hope the information contained here will help you make a smart decision.
The Pros of Outsource Accounting Services
As an entrepreneur, spending your time bookkeeping translates into a costly hourly rate. To find time to grow your business, you need to outsource your bookkeeping services. Here are pros of doing so.
A small business is as an enterprise with less than 500 employees. In the US, there are almost 28 million small businesses. 22 million are self-employed and lack employees or payroll. For the rest, they have an established accounting department with full-time employees. To enjoy financial savings, small businesses need to outsource accounting services. By doing so, the business will avoid employee expenses like payroll taxes.
Easy to Scale
Start-up businesses have smaller needs when it comes to accounting. As they grow, their needs grow too. Outsourcing financial services to a firm with oversight allow the business to scale.
Ready Financial Documents
Accounting firms specialize in preparing financial records and this makes the IRS happy. As a business owner, you don’t have to concern yourself with balance sheets or a statement of profit and loss. Your time is useful in growing the business.
invest in accounting software and apps to manage your financial documents. These apps are compatible with tablets, smartphones, and PCs. Not only do these apps capture all your financial data but you have access to the data round the clock.
When you have an in-house accounting team, fraud can happen. For instance, an employee can manipulate financial records for their benefit. This can go unnoticed. Outsourcing reduces fraud. How? The company has a dedicated team and oversight to prevent fraud.
The Cons of Outsourcing Financial Services
Outsourcing your bookkeeping functions allows you to keep tabs on your cash flow. Problem is, it has challenges. Here are the cons of outsourcing your accounting functions.
A business with an in-house team means answers to questions are available immediately. With a service provider, the answers may take a while. The good news is that with the right service provider, this is not an issue. They have a dedicated support team ready to answer all your questions.
Language difference makes it hard to communicate. To avoid this, hire a service provider who can converse in your language.
Still on the Fence About Outsourcing Your Accounting Services?
When you outsource accounting services to a service provider, it frees time for you. Now, you can focus your energies into marketing and growing your company. Choosing a reputable service provider assures you of quality work and trust. Want to streamline your payroll, invoice, billing, and bookkeeping services? Contact us today!