It is a common misconception that business owners will lose control if they outsource the bookkeeping and accounting functions in their companies. In a properly designed system, only the owner decides what bills to pay and check to sign.
It is less expensive to hire an outside bookkeeper than a full-time employee. You only pay for the actual time the outsourced bookkeeper or accountant works on your books. Also, bookkeeping services are fully tax-deductible.
Outsourced accounting to bookkeeping and taxes, simply means hiring someone who is not a W-2 employee. With today’s technology, online business services are common and rapidly growing.
There are significant advantages to using an accounting resource outside of your company, starting with cost efficiency. You save expenses on office space, utilities and other overhead, benefits, and insurance.
What should you expect from using an outside bookkeeper or accountant?
Decreased stress. An accountant is up-to-date on the latest information and software. You can have confidence in knowing a skilled professional is taking care of the billing and invoicing. This will get your company paid faster.
Reduced late payments or double payments. Someone whose sole function is accounting makes sure the bills are paid on time and promptly gets monthly invoicing out.
Outside experience. An outsourced accounting firm brings experience from a variety of client situations. The work can be done in much less time without the normal distractions that an internal employee deals with, such as routine staff meetings.
Independent advice. An outsourced firm can coach you on sensitive matters, whereas an employee may feel the need to avoid topics such as confidential owner compensation issues. The firm is privy to all the intimate financial details and develops a relationship as a trusted professional.
Technology. Technology is the fastest-changing component and fundamental differentiator of outsourced accounting firms — the difference between simply offering outsourced services and doing them well. Look at the accounting firm’s technology options.
Easy access. An accountant-centric system is one in which you provide the timely information the accounting firm needs to make the relationship work. In turn, the accountant provides anytime access to your financial reports by using cloud computing. This also could be a dashboard customized to what you want and need to see, and ensures you feel in control over your business information.
Well-designed fee arrangement. The flat-fee engagement agreement should include a detail of the scope of services as well as exclusions. One recommendation is to include a statement that the flat rate is for a “routine that is within the parameters of XX hours each month.” If your business experiences an upsurge that results in a significant increase in accounting work, the agreement can be renegotiated.
Responsible provider. You are facing greater expectations when it comes to financial transparency and government compliance, plus managing day-to-day responsibilities alongside more complex and time-consuming finance, accounting, compliance, internal audit, and risk management tasks. Also, you may be trying to do more with fewer resources.
Knowledgeable firm. Accounting experts are up-to-date on the latest regulatory requirements. They are attuned to what is happening across multiple industries and carefully monitor relevant laws and regulations to stay current on processes.
Flexible arrangement. Firms have the ability to accommodate your cash flow realities and organizational risk gaps to ensure that you are getting the most out of your investment. Business owners can choose full accounting and bookkeeping outsourcing and specialized resource enhancement to help address temporary staff shortages.
Scalable model. You can downsize or upsize accounting needs without dealing with traditional personnel challenges such as the risks of unemployment claims or need for new-hire health care packages. Businesses also no longer need to allocate time or money to training and recruiting efforts, which are two tasks that typically add to in-house resources.
Usable data. Accounting tasks frequently include analytics to help you better understand budgeting concerns and business performance. Suspicious activity is reported to the business owner, which reduces the likelihood of fraud or government penalties.
Ease of management. With the right outsourced accountant, a business owner can plan better workload management. Accounting firms often provide help with a range of cash management tasks, working capital optimization, cash flow preparation, debt compliance monitoring, and special projects. This means business owners can delegate responsibilities and redirect their focus on what really matters to them: the future of their business.
We can help you evaluate your current and future bookkeeping and accounting resources and technology needs. Contact Jason A. Mattina, CPA for further details.