Early-stage startup owners often wear multiple hats, from developing new products and making sales to hiring staff members; they barely have time to manage the ledgers. However, handling the books is an essential responsibility in order to keep a company afloat.
The finance function of any company is complicated yet critical. While one can always hire an in-house accountant or CFO, outsourcing all finance-related responsibilities to an organization that specializes in accounting, bookkeeping, financial benchmarking and reporting can offer several benefits.
Here are 10 key benefits an organization will enjoy by shifting to outsourcing.
-
Significant cost savings
: Outsourcing the finance team comes with benefits such as access to expert CPAs, accountants and chartered accountants at a much lower cost, without compromising on quality. It also helps companies save money on employment taxes, infrastructure fees and other overhead costs.
-
Enhanced data security
: An established outsourcing finance and accounting services firm can put measures in place to handle the serious data security threats that exist because they invest in expensive and impenetrable security systems. This can help mitigate the odds of compromised security programs as well as data breaches.
-
Flexibility and scalability
: An outsourcing organization that specializes in finance services can offer solutions that are customized based on specific requirements. Entrepreneurs can also scale up or down the financial processes as per their needs.
-
Stay abreast of the latest policies
: A specialized outsourcing company will always stay updated with the latest financial and compliance policies and other accounting rules.
-
Access to state of the art tech
: A financial outsourcing company invests in cutting-edge software and technology in order to be competitive; and if finance is not a business’ core function, this type of investment does not make sense for them to take on by themselves. With an outsourcing partner, startup owners can benefit from having access to the latest technology at no additional cost.
-
Reduced fraud
: While deception can never be ruled out completely, a committed outsourced team with expertise in finance best practices keeping an eye on every transaction is far more likely to spot an anomaly than someone whose focus is on building sales and growing a company.
-
Round-the-clock service
: When a company outsources its financial services to a third party, they can keep their operations running 24/7 with a time-zone advantage. They can be assured that all important tasks will be done on time and in a scheduled manner.
-
Protection in down economic times
: As situations change economically, firms tend to change their workforce, which can be a challenging and resource-intensive undertaking. However, since the responsibility of managing the talent assigned to a project lies with the outsourcing company, they do not have to make any decisions regarding its internal workforce or pay to retain staff members.
-
Security and confidentiality
: Because finance is their core offering, a finance outsourcing services partner ensures that all information remains confidential and secure. Entrepreneurs can ask the outsourcing firm to sign a nondisclosure agreement for their peace of mind.
-
Focus on core activities
: Last but not the least, with genuine back-office support, startup owners can stay focused on value-added, revenue-generating tasks such as making strategic business decisions and business development.
