Instead of maintaining large and expensive in-house accounting departments, many large as well as small businesses are turning to outsourcing. Although some people immediately think that outsourcing means sending jobs overseas, this is simply not the case. There are many companies in the United States that offer accounting outsourcing services. In a nutshell, “outsourcing” just means that a company is utilizing an accountant who doesn’t work directly for their company. There are many reasons why outsourcing could be right for your business.
Access to Highly Skilled Accountants
It can often be difficult for companies to recruit, hire and retain highly skilled accountants, especially in the case of smaller companies. The recruiting and hiring process can take up valuable time, money and other resources. There is a high demand for skilled accountants, which means that companies are usually competing for the most desirable employees. Especially in the case of smaller companies, this often means that access to the most highly skilled accountants could be limited.
Companies who already have in-house accounting departments are also not immune to problems. In some cases, accounting department staffs have to be cut, due to budget restraints. When this happens, companies can find themselves without the skilled employees they need to ensure that their accounting needs are being expertly handled.
When a company utilizes outsourcing for their accounting needs, these problems can be eliminated. Through outsourcing, a company can have access to a skilled accountant – or even a whole team of accountants – who have the experienced and knowledge needed to get the job done. If a company has a need for a particular accounting skill, they won’t have to provide in-house accountants with the required training. Instead, they simply outsource the tasks to an accountant who is already an expert in the desired field. By utilizing highly skilled accountants, a company is less likely to make accounting mistakes, some of which could be quite costly or damaging to their business.
There are many different costs associated with maintaining an in-house accounting department. It can cost a company a significant amount of money to initially recruit and hire an accountant. Then, once they’ve hired one or more in-house accountants, the expenses continue to grow. Training, benefits, salary and a variety of overhead costs can make maintaining an in-house accounting department quite expensive.
When a company doesn’t have an adequately staffed and trained accounting department, there can also be other expenses. If taxes are not filed properly in a timely fashion, expensive penalties and fees could result. Inexperienced accountants could also overlook valuable programs and tax credits, some of which could save a company money. Not only can these kinds of problems waste a company’s money, but they could also cause other business issues as well.
Through outsourcing, companies can eliminate many of these expenses. Recruiting and hiring costs are eliminated, saving the company time as well as money. Instead of the ongoing cost of salaries and benefits, companies can simply pay for the services they actually need. Training costs are also eliminated, since any training needs are taken care of by the accounting firm itself. Without the need to devote valuable office space to an internal accounting department, companies can also save on overhead costs such as electricity, office equipment, computers and software. As a result, accounting expenses are more manageable and predictable, thus making budgets easier to maintain.
Focus on Core Business Functions
In today’s business environment, companies have to focus on the most important factors in order to remain competitive. By focusing on their core competencies, business can be much more efficient and effective. Since bookkeeping and accounting are rarely considered to among a company’s core competencies, utilizing outsourcing for these functions will free up valuable corporate resources. A business that outsources its accounting tasks will have more time, money and space to devote to other important functions. By utilizing outsourcing, a company can be secure in the knowledge that their accounting needs are being handled by experts, thus allowing valuable resources to be focused on other business-critical factors.
By choosing an outsourcing firm instead of an in-house accounting department, these problems as well as many others are eliminated. Many companies don’t even realize how expensive it is to maintain in-house accounting functions, until they take the time to look at the advantages that outsourcing can offer.