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Accounting & Finance

How outsourced accounting functions can help grow your business

Posted by Shivali Anand

June 30, 2022

Running a business requires carrying out a multitude of repetitive tasks that also take up a lot of time. And as the business grows, you may need additional manpower to handle these recurring duties, from managing payroll and HR to handling the books.

To avoid the mistakes and burnout that can stem from continually handling a plethora of administrative jobs while simultaneously trying to run the business, make an honest appraisal of which aspects of the business are most effectively managed in-house and which ones could be outsourced.

Accounting, for example, is a critical responsibility for every company, albeit a time-consuming chore, and one that is often surprisingly a good candidate for outsourcing. As every business owner knows, accounting is more than just crunching numbers; it plays an essential role in your strategic planning process — which means you must carefully vet outsourced accounting firms before making a selection.

To take your business to the next level, you will need a highly experienced accountant who is familiar with the complex finances of a growing business. However, a professional with your desired pedigree may command a salary beyond the budget of most startups or smaller enterprises. This is another advantage of hiring an outsourced accounting service: You get access to an experienced team at a reasonable price rather than paying to bring on an in-house accountant.

Keep in mind that the practice of accounting also encompasses responsibility for bookkeeping, compliance, financial transparency and auditing, all of which are part and parcel of running a business. If, like most business owners, you strive to do more with fewer resources, having a qualified outsourced firm handle accounting can be a lifeline.

The top 5 benefits of outsourced accounting

1. Budget-friendly

Many companies outsource their accounting responsibilities to save money. An outsourced accounting service gives you access to experienced professionals who can deftly handle the work, but who are not on your company’s payroll. On the other hand, an experienced in-house accountant necessitates a salary and benefits that collectively are often too expensive for a small business to afford.

Regardless of your business’s size, hiring an in-house accounting team is a pricey proposition. Choosing an outsourced accounting services helps you save money on both direct and indirect costs. Accounting services provided by an outsourced firm allow you to save money that can be put to better use elsewhere.

Talk to us about how our back-office services can help your startup move and make decisions faster.

2. Skilled professionals

Be sure to thoroughly vet outsourced accounting providers before making a final decision. Start by identifying the services that your business will require, and then identify a list of reputable companies that can provide them. Next, probe each firm’s professional roster and credentials, request customer references and read all online reviews.

Once you have made a decision, it is helpful to remember that accountants at outsourced firms typically take their jobs very seriously and take pride in providing small businesses with bookkeeping and accounting services. Additionally, reputable outsourced service providers are required to continually enhance their skills and certifications to stand out in the highly competitive field.

In addition to having continual access to accounting professionals, the particular accounting services you need can often be tailored to match your demands. This can also be a great asset as your company scales up, giving you flexibility at different stages of development.

3. The latest accounting software and cloud-based systems

Another advantage of outsourcing your accounting services is that your business gets access to more sophisticated procedures and technology. The outsourced accounting service will offer the latest business-specific tools and software, which would often be prohibitively expensive to have in-house. Robust and scalable software and tools ensure a speedy and efficient workflow.

While standard software may be able to handle rudimentary accounting operations such as inventory management, revenue recognition and project accounting, via the third-party provider, you can access special software that integrates with other business apps you already use.

Most outsourced accounting firms rely on a fully online interface. Since everything is handled through a cloud-based management system, you will have access to your company's information no matter where you are or when you need it.

4. Enhanced security

Digitalization of most finance and accounting processes has produced troves of sensitive data. Companies are obligated to safeguard all the data they have, whether internal or relating to the client. Smaller businesses and startups often take only peremptory measures to protect their data, leaving them vulnerable to cyberattacks and data breaches. Many breaches are caused by nonexistent or insufficient protections in businesses’ accounting systems.

When it comes to outsourcing accounting firms, data security is of paramount importance. They are proactive rather than reactive to ensure that each operation protects their clients' confidential data.

Most professional accounting firms make use of private cloud servers that come equipped with a variety of continually updates features, such as:

• Encrypted transactions.
• Data stored on safe servers in the cloud.
• Improved data recovery.
• Accidents/crisis management.

5. Risk mitigation

Like most other industries, the accounting sector faces a continual challenge in terms of staying up to date with ever-changing tax and compliance-related legislation. This adds another layer of complexity to the accounting role. However, the risk of noncompliance is minimized when you choose a reputable outsourced accounting service with a proven commitment to continually staying abreast of compliance-related issues in your sector.

Want more?

Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, HR, payroll, insurance, and recruiting — and we can help yours too. Talk to an expert today.

Authors

Shivali Anand

Shivali Anand is a content developer at Escalon Business Services. Her expertise lies in creating consistent and relevant B2B marketing, SEO and social media content. She is armed with a PG Diploma in English Journalism from the IIMC Dhenkanal, Odisha. After starting as a travel writer, she embarked upon a career as a copyeditor, news content specialist, and researcher across organizations including Ministry of MSME, Vaco Binary Semantics LLP, Doordarshan News, and New Delhi Times.

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Accounting & Finance

How outsourced accounting functions can help grow your business

The top 5 benefits of outsourced accounting

1. Budget-friendly

2. Skilled professionals

3. The latest accounting software and cloud-based systems

4. Enhanced security

5. Risk mitigation

Want more?

Authors

Shivali Anand

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