Optimize business cost with accounts outsourcing
Optimize business cost with accounts outsourcing
Decisions related to business growth should be taken wisely, considering real-time and accurate business information. While already burdened with the task of managing the core business operations, you must consider the option of outsourcing your accounting requirements to the experts.
At first instance, you may consider outsourcing accounting functions as an additional cost. But, in reality, it can be considered one of the most excellent investments a business can make, offering you quality, non-monetary benefits to manage the business effectively and monetary benefit in the long term.
This article will help you understand how outsourcing accounting functions can save your business cost rather than treating them as an additional cost burden.
The unnoticed costs of managing accounting functions in-house
If you decide to manage your accounting and other back-office functions on your own, there is a vast imbibed cost that you might have to pay without even apparently noticing the same. Thus, in-house management of accounting functions for a small and mid-size entity comes with an unnecessary cost – commercial and non-commercial.
To save on this unnoticed additional monetary burden, the role of outsourcing accounting activities come into the picture.
We have highlighted two such major additional expenses that come with the in-house management of the accounting department:
1. Additional overhead expenses
Training
Hiring a full-time employee is costly for a small or medium-scale business. Further, in case the entity appoints a dedicated professional to look at the business’s accounting, bookkeeping, taxation, and compliance needs, there would be an additional hidden cost to train the employee to be familiar with the accounting style and methodologies of the company, specific to sector or location.
The expertise of One vs Team
It is also a practical challenge to find an all-rounder person who could take care of the entire back-office function – bookkeeping, accounting, MIS reporting, taxation and regulatory filings. As a result, businesses end up hiring a team of professionals and experts into respective domains – ultimately exponentially surging the cost of managing back-office departments. Further, most of the time, these teams of various professionals also stay under-utilized, not offering the adequate return on investment made by the entity in its accounting and back-office functions.
Further, as the regulations are evolving every day, it may be an additional cost and time burden for the in-house team to stay updated on this on a real-time basis, which may have a much more significant impact in terms of inaccuracy and non-compliance with regulatory requirements.
Lack of technological support
As a business at the initial stages of growth, you may not wish to spend on the technology or software applications to support the in-house team to properly manage the accounting, bookkeeping, financial records, and tracking of all payments and receipts. Too many manual dependencies may prove overwhelming for businesses as the chances of error increase, and there is the possibility of compromising the quality and accuracy of the data. It has the potential to cost you a fortune.
While on the contrary, if you decide to outsource all your back-office and accounting requirements to outsourcing agencies, who are proficient, well-experienced, and decked up with the most advanced technology and systems, they will help make everything fall in place with efficiency and complete effectiveness.
The industry experts are also well updated with the latest developments and industry trends. If there are any changes in the rules and regulations, they will immediately execute the changes without wasting a minute. It saves much time and cost and is also legally and ethically correct. It is one of the most effective ways to manage your finances without having to dig big holes in your pocket.
2. Potential risk and scope of internal fraud
Suppose you have an internal team for managing your back-office operations and financial transactions. In that case, there is a high possibility of manipulation in recording accounting transactions. This manipulation can either be intended or unintended. If intentional, it can transpire into a fraudulent scam, where your business is bound to suffer adversely. Thus, keeping control of the entire back-office function in a single hand to save the employee cost may cost you more than the savings expected in terms of monetary cost and reputational damage.
To avoid such undesirable circumstances, it is recommended to outsource your accounting, bookkeeping, and taxation requirements to a third-party consulting agency to leverage their expertise, diverse experience, real-time updates, etc. It can be one of the best decisions for a business to safeguard from penetration of internal fraud, focusing on getting their job done most effectively and efficiently without compromising accuracy, productivity, and digging dramatic holes in your pockets.
How do you decide – whether to outsource the accounting function or manage it in-house?
Every business is different in its ways, and you must make your decision after thoroughly analyzing the situation, considering the nature of the business activities, the growth potential, availability of resources, desired outcome, etc.
After answering all these questions, you can decide which option to select – hiring an in-house accountant or bookkeeper or outsourcing all your financial accounting requirements to a third-party firm.
Final words
Hiring an individual or a professional team to work for you from your office is undoubtedly an expensive and mentally exhausting task. Instead, you can always plan to outsource the complete accounting requirements to a consulting firm like CFO UAE, who knows their job back and forth. They will not compromise on the accuracy and quality of deliverables, allowing you to focus on your core business activities and supporting you in making informed business decisions conducive to your growth.
