Growing businesses require an effective use and allocation of resources because they don’t have access to the same amounts of cash and loans as big enterprises. They might have to delegate multiple tasks to a few employees that lack the skills and experience in doing them. This is a short-term solution to a long-term problem. As employees continue to shoulder work they lack skills and experience in, they begin to make mistakes more frequently and may disengage. This leads to lower productivity and inefficiency. This has a wider negative effect on a growing company that needs to sustain profitability.
Tasks related to accounting and bookkeeping require attention to detail. Handing accounting and bookkeeping tasks to inexperienced employees may lead to several errors. Mistakes in accounting books result in poor financial decisions because of inaccurate data and penalties. A solution you should consider is outsourcing.
When should you outsource accounting and bookkeeping tasks?
Your Team Lacks the Experience and Skills to do it Properly and Effectively
You’ll need updated accounting books whenever you decide which strategy to implement, create a budget, identify costs, pay suppliers, financial planning, and compliance with local laws. Mistakes in your books may lead to erroneous decisions that have long-term financial consequences. Your company might incur fees and penalties, miss tax incentives and deductions, spend more money on processes you could avoid, reduce profits because of higher spending, and slow and/or poor decision making because of outdated financial information.
Inexperienced employees handling and updating your books may make costly mistakes. It also takes them away from their expertise. You’ll spread your team thin while they also do tasks beyond their job description. In such cases, the ideal option is to outsource accounting. One of the advantages of outsourcing accounting is that it provides a secure option because you’ll work with experienced accountants with certifications. They’ll do the tasks you need them to do such as payroll processing, accounts receivable and payable processing, creating financial statements and reports, and others. You can count on an outsourced team to beat your deadlines and deliver first-rate output.
Disorganized Accounting Records and Data
Your team might already be collecting and storing financial data. However, their approach is disorganized and has no clear objectives for grouping sets of data. Numbers have little to no value if you have no goals in mind and if they are disorganized.
Disorganized financial data can create problems such as:
1. Mistakes in data entry.
2. Late and erroneous records for tax filing.
3. Redundant and erroneous accounting processes.
4. Misleading information about your company’s financial position.
5. Difficulties in getting loans and grants.
One of the advantages of outsourcing accounting is that a partner can organize your financial data for you. They can set up a cloud-based system using software such as QuickBooks Online, Xero, or others. Automated systems simplify and reduce some of the accounting tasks your business requires. It’s also simpler to organize financial data in a cloud-based system. You can categorize data sets so that you can access them at your convenience. Your data is secure online because you can limit access to a certain number of people. Organized and accessible financial records allow you to make real-time decisions.
Your In-house Team Needs Support
Your company may already have its own in-house and full-time accountants and/or bookkeepers, but the work they receive is more than they can manage. Long hours at the office updating accounting books, processing transactions, scheduling payment notices, and other accounting related tasks may drain them and lead to recurring fatigue. Before your in-house team reaches this point, consider outsourcing some of your accounting and bookkeeping tasks. One of the advantages of outsourcing accounting is that it can fill gaps in experience and certifications. An outsourced team can perform tasks your team lacks experience in. They can also do simple bookkeeping tasks if these are all you require. Negotiate and establish the number of hours your outsourced accountants will work. Delineate tasks to them so that your in-house team can work on higher level auditing and accounting tasks.
Concentrate on Your Company’s Strengths
Delegating multiple tasks to your employees may save you money in the short-term because you won’t need to invest in hiring, onboarding, and training a new employee. However, as your team continues to multitask, it takes time, effort, and energy away from their area of expertise and experience. They might miss certifications, training, and programs to update their skills because they’re taking on a heavier workload. This has a negative effect on their productivity and your core business. This is when outsourcing accounting and bookkeeping might work for you.
Outsourced service providers will take the accounting and bookkeeping tasks you need accomplished. Delegate work to them and establish a deadline so that your company can comply with local laws, pay taxes on time, use tax incentives and deductions effectively, and pay suppliers and business partners on time.
Cost-effective Option without Hiring Full-time
Companies balancing their costs and profits can consider outsourcing tasks like accounting. Recruitment, hiring, onboarding, and retaining costs money. You must offer a competitive package to entice talent to join your company and stay. You’ll need to combine monetary and non-monetary compensation to obtain the talents of first-rate employees. Some companies can afford this while others may push themselves over their budgets.
Outsourcing is a cost-effective option for businesses that want to maximize their resources and accomplish accounting tasks without overspending and investing in new employees. Screen the outsourced service providers to determine if they meet your requirements and if they have the skills, experience, and certifications that you need. Once you’ve made your choice, discuss the specifics of the work such as payment terms, schedule, work hours, and other details. You don’t have to pay for an outsourced team’s training, incentives for retention, overtime pay, days off, and other benefits you give your full-time staff. This strategy allows you to not only save money but also make sure your accounting books are updated with no mistakes.
Outsourcing accounting is a cost-effective and viable solution for growing businesses. This approach solves your need for expertise without hiring a full-time staff. Outsourced service providers provide your team with additional support.
One of the advantages of outsourcing accounting is that your business saves money and meets your accounting and bookkeeping needs.If you’re looking for a reliable team, Robookkeeper is the one you need. We offer first-rate outsourced bookkeeping services. Our team has the experience and skills to get the job done.