5 Top Accounting Services That Can be Outsourced

Many small businesses need help within their first year of operations because owners attempt to manage all tasks independently. Effective company management demands diligence and focus, with accounting posing a particularly complex and time-consuming challenge beyond the capacity of a sole individual. That’s where outsourcing steps in. Outsourcing accounting services offers numerous advantages for business expansion and operational efficiency. These services ensure legal compliance and foster growth and long-term success. Here’s our list of the top five accounting services that can be outsourced to allow businesses to thrive in competitive environments and achieve sustainable growth.

Accounts Payable & Receivable

What are accounts payable & receivable?

Accounts payable represent a company’s monetary obligations to its suppliers and vendors. In contrast, accounts receivable refers to the funds owed to the company, usually by its customers. In credit transactions between businesses, one party records the transaction as an entry in accounts payable, reflecting the amount owed, while the other records it as an entry in accounts receivable, indicating the amount owed to them.

Outsourcing Accounts Payable & Receivable

Efficient management of accounts payable and receivable constitutes a critical component in cash flow administration. Outsourcing these functions presents numerous strategic advantages.

• Firstly, professional oversight from accounts payable and receivable specialists facilitates the optimization of cash flow dynamics, thereby mitigating working capital requirements and enhancing financial liquidity.
• Secondly, adept accounts payable management can cultivate improved relationships with vendors, potentially resulting in favorable terms such as discounts for prompt payments, thus optimizing procurement processes.
• Thirdly, outsourcing minimizes the risk of costly late payment penalties by ensuring timely settlement of accounts payable obligations.

This proactive approach to financial management fosters financial stability and operational efficiency. Outsourcing accounts payable and receivable functions enables organizations to streamline cash flow operations, strengthen vendor partnerships, and avoid financial penalties, reinforcing financial health and sustainable growth prospects.

Bookkeeping services

What are bookkeeping services?

Bookkeeping is the cornerstone of all accounting functions, encompassing the meticulous and organized recording of financial transactions and statements. This process demands attention to detail and timely updates of financial records and can prove quite time-consuming for small businesses.

Outsourcing bookkeeping tasks presents several advantages.

Outsourced firms employ expert bookkeepers in data entry, ensuring precision and consistency in financial documentation.

• This accuracy can help you mitigate the risk of errors, thereby enhancing the reliability of financial reporting.
• Not just that, as we mentioned earlier, bookkeeping is one of those tasks that you need to do that can often eat into the time of day, taking away from all the time your team could otherwise spend focusing on other growth and strategy tasks. Outsourcing this mundane task can liberate valuable time and resources for your employees, enabling them to prioritize higher-level services, client engagements, and strategic business development.
• By entrusting bookkeeping responsibilities to external specialists, you can shift your focus to streamlining operations and improving core competencies.
• This approach, in turn, helps eliminate the need for hiring and training in-house personnel, presenting a cost-effective solution.

Controller Services

What are Controller Services?

Controller services encompass the pivotal role of overseeing financial record maintenance and ensuring the production of timely, accurate financial reports within an organization.

Controllers supervise your accounting staff, ensuring that financial protocols, rules, and regulations are followed. Additionally, they undertake tax-related responsibilities, ensuring compliance with tax regulations and optimizing tax strategies. Their comprehensive oversight facilitates financial stability, regulatory compliance, and informed decision-making within the organization.

Outsourcing Controller Services

• Outsourced controller services facilitate business growth through strategic guidance and management, offering precise and timely financial reporting and insights.
• These services include audit reporting, cash flow analysis, compliance management, and overseeing overhead expenses.
• External teams provide accurate cash flow analysis, aid in audit reporting, and offer financial enhancement and cost-saving strategies, supporting organizational expansion and economic stability.

Cost Accounting

What is Cost Accounting?

Cost accounting represents a systematic approach embedded within financial management, dedicated solely to analyzing a company’s expenditures, including fixed and variable costs.

Outsourcing Cost Accounting

Outsourcing cost accounting services facilitates the flexibility to adjust resource allocation to the evolving needs of a growing business.

• This approach enables precise customization of service provision, ensuring optimal resource utilization while accommodating fluctuations in business demand.
• Outsourcing aligns expenditures with specific requirements, as payments are based solely on time and services, offering cost-effective scalability.
• Furthermore, this model allows seamless resource allocation adjustment as the business expands, ensuring alignment with evolving operational demands.
• Consequently, outsourcing empowers organizations to efficiently manage financial operations while maintaining responsiveness to changing business dynamics.

This strategic approach optimizes resource utilization and enhances operational efficiency, enabling businesses to navigate growth phases with enhanced adaptability and cost-effectiveness.

Tax Returns

What are Tax Returns?

A tax return constitutes a formal submission to a tax authority documenting an individual or entity’s income, expenditures, and relevant tax details. This comprehensive form or set of forms serves as a declaration of financial activities for a specified period, facilitating the assessment and regulation of tax liabilities. It encompasses crucial information for determining taxable income and ensuring compliance with statutory tax obligations.

Outsourcing Tax Returns

Filing of tax returns is a fundamental task that is tedious and daunting. It demands excessive paperwork with an immense focus on tiny details. For small businesses to file taxes and stay on top of regulatory changes is nothing short of an absolute admin nightmare. That’s where outsourcing tax reporting to a third-party agency steps in. The strategic decision to outsource these tasks brings with it several advantageous outcomes.

• Firstly, outsourcing such accounting services enables access to tax experts who are proficient and well-versed in navigating intricate tax regulations and tax-saving opportunities and devising optimal tax strategies tailored to specific client needs. This expertise enhances the overall quality and effectiveness of tax-related services provided.
• Secondly, outsourcing ensures heightened tax return preparation and filing efficiency, culminating in accurate submissions within the requisite timeline. By taking this immense burden off the shoulders of in-house accounting teams, firms can better allocate resources and focus on core competencies.
• Lastly, entrusting tax-related functions to external specialists ensures stringent quality control measures, fostering the maintenance of successful delivery of the tasks at hand.

Payroll

What is payroll?

Payroll is a comprehensive record detailing the compensation owed to employees within a company. It encompasses wages, salaries, bonuses, and other forms of remuneration earned over a specified period.

Outsourcing Payroll

Managing payroll entails the intricate process of computing and disbursing employee salaries, administering tax withholdings, and upholding adherence to labor regulations. Outsourcing payroll processing yields multifaceted advantages.

• Firstly, professional payroll service providers possess the requisite expertise to meticulously calculate payroll, thereby mitigating errors and potential legal ramifications.
• Secondly, it enhances operational efficiency by liberating internal resources from labor-intensive payroll duties, allowing staff to focus on strategic initiatives.
• Thirdly, outsourcing payroll ensures compliance with dynamic tax legislation and regulations, safeguarding the organization against non-compliance penalties.

This strategic approach to payroll management fosters accuracy and efficiency and bolsters regulatory adherence, thereby fortifying the enterprise’s financial integrity and operational resilience.

Benefits of Outsourcing Accounting Services:

Outsourcing finance and accounting services provides:

• Access to specialized expertise and knowledge accumulated over years of industry experience.
• Facilitating tax management.
• Asset oversight.
• Strategic decision-making.

External firms offer enhanced data security and confidentiality through updated cybersecurity measures, alleviating staffing concerns and ensuring legal compliance without personal biases. Additionally, outsourced accounting enhances scalability and flexibility, aiding growth management and profitability assessment while saving time and improving efficiency by handling bookkeeping and financial tasks. Expert accountants deliver detailed and accurate financial reporting, leveraging advanced technology and tools to optimize financial operations. Moreover, they offer valuable insights and counsel from collaboration and continuous professional development, ensuring regulatory compliance and fostering business growth.

The Final Word:

Regardless of business size or service, financial responsibilities necessitate attention. Opting for professional external accounting services over hiring an in-house part-time or full-time accountant can yield substantial cost savings annually. Entrusting financial management to external experts ensures timely access to expertise, enhanced security measures, and superior-quality outcomes compared to in-house accounting. This strategic decision minimizes financial burden and optimizes resource allocation, fostering economic stability and operational efficiency within the organization.

Want to know more about adopting a skills-based hiring approach? In addition to taxes, accounting, bookkeeping, and CFO services through its FinOps, Escalon’s Essential Business Services include PeopleOps (HR, benefits, recruiting, and payroll) and Risk (business insurance). Talk to an expert today.

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.