Knowledge can transform lives. Wise use of accounting procedures can transform lackluster performance into outstanding leadership in its industry. If you haven’t given your accounting department much though, and have been content to keep your books clean as a financial record and not a living system, then it might be time to rethink your ways. With financial engineering and new technology these days, you can bring about order from numerical chaos; deliver keen business insights that can be translated into plans, actions and powerful new systems. Then, you can focus on what owners and managers do best: growing your business.
Not everyone is a whiz at math, however. And many a wise entrepreneur or businessman has wept at managing the numbers. Take heart! Why not try out how effective an outsourced accounting department can be? Once you find knowledgeable people with the best practices, people who utilize the power of information technology, you can streamline your financials faster, and growing your business can be a breeze.
Bookkeeping is often viewed as a necessary task that creates no value for businesses, but it is still the core function of every financial department in any business. Without proper bookkeeping, meaningful business analysis cannot be delivered for management to make informed decisions.
Accounting delivers useful business insights to business owners, presenting all the information that is most relevant, in different forms. Empowering you with reports that access your key performance indicators allows you to evaluate your choices and decisions in your operations. When done for the right reasons, outsourcing the back office functions of your business offers many advantages.
Consider these Advantages. During periods of rapid growth, the back-office operations of a company, especially bookkeeping and accounting, often experiences a greater volume of transactions. Seasonal changes and surges in demand may be good for the bottom line but it can also use up the human and financial resources at the core of your business. You won’t want to sacrifice the success of your own business. Outsourcing bookkeeping and accounting activities will allow your managers and key personnel to refocus their business talents on activities that contribute most to its growth.
Expensive operational costs are a clear signal urging managers to consider outsourcing services. If the overhead costs of doing your bookkeeping and accounting in-house are extremely high, outsource these functions if it is no longer viable to do it at a reasonable cost. This reduces overhead and simplifies processes, which translates to reduced cost and increased efficiency.
Companies plagued with a high turnover see outsourcing as a way to provide continuity to the company while reducing risks of mistakes in its operation. It is another way to bring in better management skills to your company via your outsourced partners, in times when your staff does not possess the required skill set.
If one considers advantages, you may wonder what the disadvantages are. The downsides to outsourcing your accounting department have to be considered before making your decision on which service provider to choose.
A major disadvantage of outsourcing the accounts of any business, is the staff are not situated onsite with the rest of the core operations of the business. This could be disruptive to business operations where clear and prompt communication mechanisms do not exist within the business between staff and outsourced accounts personnel. Overcoming the communication dilemma is the single biggest hurdle to having any outsourced accounts operation function efficiently. The best way to do this is to ensure expectations are clear from the beginning between both parties and to make sure there is a strong flow of organized information in the form of regular reports being issued as well as status updates of key business objectives being fed back to business management.
Data security and confidentiality is also a core issue of the outsourced accounts initiative. Expectations once again must be made clear by both parties. However, any outsourced accounting operation should have procedures and systems in place to ensure the integrity of all data is maintained. But even beyond this there is a sensitivity which is associated with the finance function of any business which must be addressed and preserved especially the payroll aspect. Outside of having strong information technology systems and confidentiality agreements in place there is a strong element of trust that exists in these business arrangements, as such both the business and the outsourced accounting personnel need to be comfortable working with one another.
Though physical distance and data security may pose an initial hurdle, consider this: how do you feel about the prospect of having your back office have the accounts up to date and processed by professionals who are qualified and experienced at a minimal cost?
These are some of the key considerations wise business leaders have resolved for themselves in making a choice to outsource their accounting department. Once you’ve found possible partners, weigh carefully the advantages that they bring to your company. You may just find outsourced accounting departments to be the best solution for your needs!