Outsourcing your Accounting function
Should I hire or should I fire? Or let us rather ask, should I appoint an in-house accountant or outsource the entire accounting function? As every business differs, there is no concrete answer to this, however certain factors need to be considered in deciding a desirable approach.
Due to a growing competitive business environment, different stages of growth within each business as well as the advancement of technology, business owners are faced with major decision-making factors in managing day-to-day business activities. These strategies do not only determine whether companies remain a competitor amongst their rivals, but also becoming market-leaders within their industries. One of the approaches that need to be decided upon, is whether to outsource the accountant or not
5 Benefits of outsourcing your accounting function
1) Reduced cost of services
Small businesses often find it difficult to employ a full-time accountant due to the cost thereof. The employment of full-time accounting staff members can soar employment cost by taking leave days, sick days and other employee benefits into consideration. The employment of staff also gives rise to additional matters such as hiring Human Resources staff, renting office space, rising office expenses etc.
Outsourcing the #accountingfunction can often lead to a cost-benefit, especially if it is negotiated and agreed upon in a feasible manner.
2) Flexibility of services
Appointing the appropriate person for a specific role will always be up in the air until output can be measured. Incorrect decisions can cause massive frustration and lead to unmeasurable losses.
Unless otherwise, an employment agreement is permanent and is subject to the Basic Conditions of Employment Act, whereas services outsourced can be replaced based on the need and requirements of the business.
Changing the terms of a Service Level Agreement is often more straightforward than amending an employee agreement with a fixed job description. To be able to change and adapt based on required services remains a massive advantage for any growing business. #Flexibility is key!
3) Increased knowledge and expertise
Most #outsourcedaccountants consist of teams that have provided services to a variety of clients within different industries and sectors. Outsourcing the accounting function often gives access to specialised services tailored exactly for each business’ needs, whereas a permanent staff member may have limited experience in theory and practice relevant to the business. This can greatly enhance compliance requirements.
Accounting firms often have access to a variety of software tools as well as business solutions that are beneficial in #simplifying services rendered to the business. Financial information can be tailored and delivered specifically for Business needs.
4) Owner set at what really matters
Owners are often caught up with many responsibilities within the business which do not necessary form part of tasks in which they are good at – selling themselves and their products to their clients. Being caught up with administrative burdens, ensuring adherence of complicated finance requirements as well as sourcing and managing staff members can cause frustration and massive time costs.
Outsourcing an accountant often enables the business owner to remain increasingly #involved in the business processes directly associated in the output of the product/service the organisation delivers.
5) Reduced risk of fraud and data mismanagement
In-house accountants and staff are often entrusted with company assets, thereby imposing a risk of mismanagement thereof.
It is very seldom that external accountants have access to client assets. Most accountants belong to professional accounting bodies with relevant code of conducts that enhance #accountability and #professionalism.
In the event of retaining the payroll function in-house, business owners need to ensure that sensitive information such as payroll information are kept in a #confidential manner. By outsourcing the payroll function, the risk of leaked data is greatly reduced.
By taking the above into consideration, it is evident that in certain circumstances it can be beneficial to outsource the accounting function. This often includes the external accountant to provide a full, extensive finance function.
There are also certain additional factors that need to be kept in mind when appointing an external accountant.
As a business owner, it is important to make fitting decisions in the management of your business. One of these decisions is the selection on whether to outsource your accounting function. It should be beneficial, practical and enable you as the owner to do what you are best at – steer your business to #success.