Benefits of Outsourced Accounting for Business Owners

There was a time when I used to spend hours trying to balance my finances. Stayed up late and buried in spreadsheets, hoping I wouldn’t miss anything important.

Honestly, it felt like climbing countless mountains. All these tasks pulled me away from what I loved: growing my business.

I know you feel the same I once felt right? That’s when Outsourced accounting came to the rescue. It helped me earn more hours in the day, eased my workload and improved my finances.

How? 

Hang in there, get to the end of this blog and see how accounting outsourcing services are a game-changer for your business. 

Outsourced Accounting is when you partner with a team of accountants, experts or business accounting service professionals who take care of your accounting tasks.

Instead of handling all your accounting and bookkeeping yourself or hiring an in-house accountant, these professionals handle your accounts remotely.

These experts handle things like:

• Bookkeeping 
• Tax filing 
• Payroll management 
• Account management
• Financial report preparations
• Ensure tax compliance 
• Financial planning ( and more)

What more? As a business owner, you cannot do everything on your own. To run your company effectively, you require someone to handle complicated tasks like accounting. 

Of course, the role of technology in accounting has greatly changed how accounting is done, from manual paper-based to automation and AI. Nonetheless, achieving the right balance between human skills and technology is also a challenge. 

The valuable insights and accounting benefits these professionals provide can help you guide your business decisions. (It did for me.)  Apart from offering many benefits (keep reading for the benefits of outsourced accounting services), the accountants do what they do best so that you can focus on what you do best.

Are you ready to hand over your accounting to the experts? Okay, I will list the benefits first. 

500 hours of paperwork saved. 

Flawless, neat and tidy accounts. 

Perfectly managed transactions. 

This is the kind of impact outsourced bookkeeping and accounting can have on your business. 

No matter the size of your industry, many benefits (while some benefits may vary) of outsourced bookkeeping and accounting apply universally to every business. 

Let’s look at 9 bookkeeping benefits that are not just perks but benefits that will propel your business forward. 

Benefit 1: Cost Savings 

Outsource your accounting if you want to save money in the long run. In the start, it may sound counterintuitive. How can hiring an external service save you money?

But one of the main bookkeeping benefits precisely is cost savings. How does it work?

• Reduce overhead costs
• Savings on salary and other benefits for full-time employees
• Savings on office space, like desks and computers
• Reduced software and technological expenses, like software and advanced tools.  

The costs of hiring an in-house accountant can add up like a weed and strain your budget with necessities like salary and office space. However, with outsourcing, you can scale the services up and down based on your needs. So, you only pay for the services you need.

Benefit 2: Expert Support 

Recruitment, training and retention. Keeping up with the latest industry rules and best accounting practices. 

That's a lot, isn’t it? It is difficult to manage all this while running a business. Outsourced bookkeeping professionals specialize in this and take care of it all:

• Financial management 
• Tax planning and preparation
• Handling risk management 
• Regulatory compliance 
• Cash flow management ( and more) 

Outsourcing firms have staff who offer unparalleled expertise and help you make skilled decisions based on the latest regulations and best practices. 

Benefits 3: Accuracy and Compliance 

Accounting errors can be more than just a headache. They can spiral into losses and legal penalties.

I have seen how these mistakes quickly turn into big fines when there is a lack of in-house expertise or teams are stretched thin. 

Here’s how professional outsourcing firms make sense:

• Follow a robust accounting system for guaranteed accuracy and minimized errors.
• Use automated systems for accurate and error-free reporting.
• They are compliance experts.
• Guides you with tax codes, legal requirements and obligations.

They won’t let you face severe consequences of inaccurate finances or pay penalties for late or wrong fillings.

Benefit 4: Time-Saving

You are constantly putting out fires. Dealing with unhappy customers, handling employees or other urgent matters.

Then comes the end of the financial year. A stressful time when you want to handle the year-round business fire but also close annual accounts, collect records and documents and put everything in place.

Audits. Taxation. Anxiety. Panic. Your employees might feel overburdened, but accounting professionals are used to these situations. They handle it like a pro.

Without stretching your resources too thin and freeing your time to focus on other things, let professionals handle these tasks. It’s worth considering. 

Benefit 5: Scalability and Flexibility

Your business is bound to change. Your accounting needs are bound to change. Mine did. 

Managing an in-house team is not one of the most practical solutions when you are going through periods of growth, seasonal fluctuations or busy periods during expansions. It’s stressful and not really cost-efficient.

Your employees may feel overwhelmed and overburdened with all the changes. On top of that, you are spending more than you can with the changes.

What are the outsourced bookkeeping benefits? They will increase or decrease the level of accounting support you need. They are flexible and scalable. 

Say, during an expansion or tax season, ask them for more support. Conversely, when things are slow, ask them to reduce the level of support. 

Indeed, a very smart way to keep your business running smoothly, no matter the stage you are in your business. 

Benefit 6: Advanced Tech and Tools 

Who doesn’t want to stay competitive in the current market? Staying on the front foot, however, comes with a price to pay.

You have to keep up with the latest technology and tools which becomes difficult for SMEs because investing in high-end software adds up to become a major expense.

That’s one of the major bookkeeping benefits when it comes to outsourcing. They already have access to advanced tools. They use cloud-based systems, real-time financial dashboards and other cutting-edge platforms to keep your finances secure and up-to-date.

Without paying the hefty price, you gain access to these tools while keeping ahead of the competition.

Benefit 7: Better Cash Flow Management

I agree. Poorly managed cash flow causes serious financial problems and puts your business at risk.

How do outsourced bookkeeping accountants help? They provide you with timely reports that are easy to understand.

Based on these reports, you can make timely smarter decisions. Where to invest, what to prioritize and when to take on new projects or opportunities.

Bookkeeping gives you the confidence to run your business while ensuring that your finances and cash flow are nicely managed. 

Benefit 8: Work on Your Business 

I know from experience that while accounting is necessary, it’s not the only factor that drives your business forward. You also need to focus on delivering the best product or services, providing exceptional customer experience and pushing through the competition.

Therefore, one of the biggest benefits is that you get to focus on the bigger picture. You get to focus on the strategic side of things rather than being stuck only in the details. 

Benefit 9: Better Decision Making

Risks like fraud, mismanagement, and non-compliance can easily set you off track. That’s another major bookkeeping benefit. You don’t have to worry about these challenges.

Benefits of business accounting services also include accurate financial data, tailored insights, better budgeting and performance analysis. The result? You get to make better-informed decisions.

Moreover, these experts also act as strategic partners. They offer advice on cost reduction, financial planning, revenue optimization and more to keep your business running.

What more? If you are looking to expand internationally, outsourced firms are equipped with global expertise. They make the process of cross-border transactions and local requirements easy.

The next question that might come in your head. Who to hire? Is it okay to hire any outsourcing company? Well, no. I have some wisdom for you. Keep reading. 

There are plenty of benefits of outsourced accounting, but outsourcing companies can cost you a dime. What’s worth considering is you should not get stuck with the wrong one.

Consider the following factors when choosing an outsourcing company or consulting firm.

• Security 

Minor violations can lead to disasters. Do not select a firm that can get into activities that can bring your company down. Check the security features they offer, get it in writing and understand the measures that they offer when it comes to confidentiality. 

• Cost 

Every firm has and offers a unique pricing plan. Understand their pricing and how much they would pay to the accountant. Are there any hidden costs? Are they transparent with the pricing?

Finally, choose a provider who offers value for the money and is just economical because quality also matters.

• Expertise and Knowledge

The provider you choose should have the expertise and knowledge, especially for your industry. Ask about their knowledge and industrial experience.

Is the accountant experience enough to handle your growing business? Can they scale as your operations scale and manage the extra work?

• Customer Reviews and Ratings 

Check for reviews and ratings from current and previous customers. Do you have someone who can give you reviews about the provider? Reputation matters, so consider the number of years they have been providing the services. 

• End-to-End Accounting Services

Is it payroll management? Is it taxing? Is it accounts payable and receivable? What kind of accounting service are you looking for? Can they provide the service you are looking for? 

Discuss your needs with your current accountant or manager if you have one. Plan and select an outsourcing company that meets your needs.

In the end, you know your company and your finances better. Just make sure that they get back what you expect and need for your business to grow. 

Let me be very clear. You really don’t need a whole village to run or manage your accounts. 

You just need someone who can give you quality work in a secure and efficient manner. Augmented Systems has certified accountants with years of experience, proven track record and costs that justify your requirements.

1. Why do companies outsource finance?

Outsourcing your finance and accounting functions can provide numerous benefits, including cost savings, scalability, improved efficiency, and a reduced risk of fraud. 

By utilizing the expertise and tools of third-party service providers, your company can achieve a strategic advantage in a competitive market.

2. Why is outsourcing necessary?

Outsourcing can help you avoid the one-time costs of hiring and training full-time employees, such as salaries, benefits, and office space. 

Outsourcing also allows you to avoid the capital costs of purchasing and maintaining equipment and software needed for specific functions.

3. What is the basic concept of outsourcing?

Outsourcing is a business practice where a company hires a third party to perform tasks, manage operations, or provide services.

4. What is a risk framework?

The Risk Management Framework is a template and guideline companies use to identify, eliminate and minimize risks. 

It was originally developed by the National Institute of Standards and Technology to help protect the United States government's information systems.