In today’s challenging economic climate, companies often struggle with ways to maximize their resources and reduce costs. Downsizing and “right-sizing” are everyday terms in many businesses. As a result, the same amount of work has to be done with fewer employees, who are often put in the position of doing several jobs at once, reducing their ability to specialize. Training budgets often have to be cut, making it difficult for employees to stay up-to-date on their technical and specialized knowledge. Companies are also faced with rising costs for the employees they still have, such as increases in benefit costs. As a result, many companies who traditionally maintained their own accounting and bookkeeping staff are considering the concept of outsourcing these important business functions.
Reducing and Managing Costs
Reducing costs is one of the primary reasons why a company may become an outsourced bookkeeping client. By hiring an accounting firm instead of maintaining an in-house department can save considerably on salary, benefit, management, and overhead costs. Training and hiring costs also become a thing of the past, since these costs are absorbed and managed by the accounting firm itself. As a result, expenses become more predictable and easier to manage.
Being able to leverage the expertise and specialized training of an accounting firm is another reason why many companies are considering becoming outsourced bookkeeping clients. Tax laws and regulations are extremely complex, and it can be quite difficult for a company to stay on top of things. Not only is it difficult and costly to find and hire employees who have this kind of specialized knowledge, but it is also quite costly to keep them well-trained. Accounting employees have to understand the various nuances of local, state, and federal tax laws, and possibly even the tax laws of other countries. A company could be hit with stiff penalties if taxes are filed late or incorrectly, which can easily happen with an inexperienced or under-trained accounting staff. Knowing which tax credits to take advantage, as well as how to best utilize them, is another issue that can save… or lose… a company thousands of dollars. As a result, many companies are realizing the benefits of leveraging the expertise of an outside accounting firm.
Focusing on Business
In the current business climate of needing to do more with less, companies are evaluating how best to use their limited resources. In many cases, companies are seeing the value of focusing their efforts on their core competencies, in order to maximize their effectiveness. Since bookkeeping is rarely considered to be one of a company’s core competencies, it is often an ideal candidate for outsourcing. By putting its bookkeeping tasks into the hands of an expert accounting firm, a company is better able to focus on its goals and business strategies. In addition to freeing up a company’s time, it also often frees up office space, which can then be used for business functions that actually make money for the company, essentially turning a cost center into a profit center. In the end, many companies become outsourced bookkeeping clients because it simply makes good business sense.