Outsourcing accounting: Is it good or bad for your small business?

Outsourcing is a bit of a dilemma to many small businesses. Small business owners wonder whether outsourcing non-core functions can bring them enough benefits or whether it is too great a risk to take. A major issue for small businesses is to decide whether outsourcing accounting and bookkeeping, which takes up a major chunk of their time, is the right step for their business. In order to determine whether outsourcing accounting to a professional accounting firm is the best step for a small business, it is necessary to analyze the advantages and risks associated with it. If you are one of those small business owners facing the same dilemma, read on.

The advantages of outsourcing accounting for small businesses are many:

Focus on revenue-generating activities
The main advantage of outsourcing accounting for a small business is that it allows the small business owner to focus on the core business activities without worrying about the state of books of accounts. The major problem faced by many small business owners is the inability to dedicate enough time to revenue-generating activities. With an accounting firm taking care of all accounting and bookkeeping functions, the small business owner can rest assured that business finances are being taken care of, and can hence dedicate his/her full focus on business activities.

Leave the accounting functions to experts
Outsourcing accounting to a professional accounting firm ensures that experts are working on your accounting. This reduces the chances of errors in your books of accounts. This also means that your books will remain up to date at any given point of time, so that you get the true picture of your business profitability and can take business decisions accordingly.

Save costs
Outsourcing accounting to a professional is cheaper than hiring in-house resources. By outsourcing accounting, small businesses can save up to 40% of costs. This is a significant amount of saving for a small business. This amount can be re-invested into the business. With the many accounting firms in the market today, you can select a service provider who has experience in your industry.

Customized accounting services
Accounting firms provide customized accounting services, which meet specific small business requirements. You can ask for specific reports at regular intervals so that you get the correct picture of your business’ profitability. You can also omit those accounting services your business doesn’t require. Outsourcing accounting functions hence ensures that your business has the solution most suitable for it.

There are also certain disadvantages of outsourcing accounting that need to be taken into consideration:

Confidentiality
Outsourcing accounting means that you have to send confidential accounting information to the accounting firm. If proper security measures are not taken by the accounting firm in question, confidentiality of the accounting information may be breached. Small business owners need to double check on what security measures are being taken to protect their confidential information to avoid a breach.

Inexperienced accounting service providers
Inexperienced accounting firms are a major issue for outsourcing accounting. Outsourcing accounting to an inexperienced service provider can damage the profitability of your business as well as take up extra time for correcting the mistakes that accounting firm makes. While outsourcing accounting, check the experience of the accounting firm and talk to past clients in order to get an idea about the skills of the firm.

The advantages of outsourcing accounting far out-number the possible disadvantages of the same. If small business owners select the accounting firm carefully, their business can prosper steadily even in a tough market.

Accounting Services: A Means For Focusing More On Your Small Business

Using accounting services has become a common practice with small and mid-sized businesses, which have fewer resources to manage their business with. A professional accounting service provider has the potential of saving small businesses up to 40% in costs, which can be used to develop the business further. However, using an accounting firm to maintain books of accounts is not just a way to reduce costs; it has many other benefits also.

Focus on your main business activity

The most important reason you should use accounting services from a professional is that you can then focus on your main business activity. Maintaining your books of accounts is not your specialty, and you should hence not spend time doing that. If you have an accounting firm taking care of all your accounting and bookkeeping, you can stop worrying about it and spend more time on core activities which can increase business for you. Handing over all your accounting tasks to an experienced accounting service provider will free valuable time for you which can be a crucial factor for making your small business successful.

Reduce employee-related issues

Many businesses face a lot of issues related to hiring, training and retaining in-house employees. Sometimes, in case of bigger problems, businesses face employee-related lawsuits, which are time consuming. When you use accounting services from a service provider, you don’t have to worry about any issue related to employees, as you are using services and not employing people directly. An accounting firm hence ensures that you save on time and resources of hiring in-house employees.

Experts at your service

Using accounting services from a professional ensures that your books of accounts are being taken care of by experts in the field of accounting and bookkeeping. Accounting firms hire experts who are efficient and experienced at what they do and will work better than an in-house accountant. With such experts working on your accounting, there will also be less likelihood of mistakes in the work that is completed. You hence not only save cost of hiring an accountant, but also get a much more experienced staff to complete your accounting.

Save on office space and resources

The space that your in-house accountant would utilize for maintaining your books of accounts can be saved if you use outsourced accounting services. Accounting firms generally provide online accounting, which eliminates the requirement of any office space. You hence save on rent of an office or the space occupied by your accountant, which you can utilize elsewhere in your business.

No last minute problems

An accounting service provider updates transactions in your books of accounts on daily basis. You can hence stop worrying about pending tasks or last minute glitches at the time of tax filing and annual audits. Your books will be up to date at any given point of time, which eliminates the hassles of last-minute problems which are typically faced at the time of filing of tax.

An experienced accounting firm can reduce your burden of everyday activities, so that you can develop your business according to the vision you have. You may benefit even more if your accounting service provider has some experience in dealing with businesses similar to yours.

Outsourcing Accounting Services: 3 Things you Should Know

Accounting and bookkeeping for small businesses had changed drastically in the past few years. The rules for accounting remain the same; however, paper-based accounting has been replaced by virtual accounting. Outsourcing accounting services is hence a popular choice of business owners now. Using an accounting service provider and outsourcing accounting functions saves costs as well as gets accounting done effectively. Using the services of a professional accounting service provider eases a lot of burden of business owners. However, as a business owner, you need to know some things before outsourcing accounting services. The following are 3 essential points you need to know before outsourcing accounting services:

Local or Offshore
The advantage of outsourcing accounting services is that you can select the service provider you want, according to your terms and conditions. If the accounting and bookkeeping service provider is based locally, it will be easy for you to get in touch with him/her in case you need to. However, the disadvantage is that local accounting service providers may not be as cost-effective as offshore ones. Offshore accounting service providers, on the other hand, offer significant cuts in costs, but may be unavailable personally when needs arises. The ideal company you can use for outsourcing accounting services is one which works virtually but has a local presence. That way, it will be able to offer cost-effective rates as well as be available personally.

Experience
If you are thinking of Outsourcing accounting services, you will obviously look for someone who has relevant experience and has expertise enough to handle your books of accounts. Even if the accounting service provider in question has years of experience in accounting and bookkeeping, ask whether it has enough experience in your industry and cross check the references. If the service provider has a good record with past clients, you can rest assured that outsourcing accounting services to him/her is a wise decision. The kind of staff the accounting service provider hires is also an important factor in the way your outsourced accounting will fare, so be sure to ask about the qualifications and availability of accounting staff.

Add-ons
As said before, accounting doesn’t involve only debit and credit anymore. Professional service providers for outsourced accounting services now provide management reports in addition to the standard accounting and bookkeeping reports like P&L statements and Balance Sheets, which can help you take care of your business in a more efficient way. Such accounting service providers have also started providing weekly reports instead of the monthly or quarterly reports which were prevalent before. These are valuable add-ons which are associated with Outsourcing accounting services, which will help your business do well and grow.

Tips For Selecting An Accounting And Bookkeeping Service Provider For Women Entrepreneurs

Women entrepreneurs are today running more small businesses than ever before and are poised to surpass the number of small businesses run by men. We were thinking since some time to include some accounting services related tips with a special focus on women entrepreneurs, as accounting and bookkeeping remains one of the few areas women face difficulties in. This post is hence dedicated to accounting and bookkeeping for women entrepreneurs.

There are certain differences in the way women do business and this needs to be kept in mind while planning to hire a company for accounting services:

1. Women are essentially different in the way they manage their business. It is observed in general that they like to balance all the other activities of their life alongside their business, whereas men tend to focus totally on their small business. Due to this necessity to divide their time in various commitments, women entrepreneurs need to rope in a strong advisor in the form of an experienced bookkeeping and accounting service provider to manage their business finances properly. Women are also likely to consult more often with the firm they hire for their small business accounting as compared to men for accounting and bookkeeping matters related to their business.


2. Women are also not very comfortable with the financial aspect of the business and tend to depend on a bookkeeping and accounting service provider for expert advice on managing their books. Due to this dependence, the accounting service provider becomes an integral and important part of a woman-owned business and also a base for the success of that business.

Due to these differences in the way women conduct business, they need a dependable and expert bookkeeping and accounting service provider, who can sit with them, understand their business as well as has some experience working with similar businesses. The accounting service provider should also be trustworthy, so that the women entrepreneurs can divulge confidential information without fear of leakage.

If you are a woman entrepreneur who is wondering how to find an ideal bookkeeping and accounting service provider for your business, read on for some tips to select one:

1. Choose an Expert - Cheap Can be Expensive

It's an industry known fact that outsourcing accounting and bookkeeping can save you cost. Since you don't need anybody in-house on your payroll, you can save yourself a lot of money. But many a times, in a bid to save cost, women entrepreneurs tend to compromise on the expertise and experience of accounting service providers. This can be a huge mistake for a woman-owned business. A company offering you a discount of up to 40% can be legitimate; however, don't take the discount thing too far by opting for "80-90% off" offers - such offers can be an expensive mistake. Experience in similar kinds of businesses counts the most towards good accounting and bookkeeping of your business. So when you are searching for a firm providing accounting services, ask specifically about their experience in your industry.



2. Check Out the Accounting Firm's Support Services

You might need to consult with the firm you hire for accounting services several times in a week. You hence need to ensure that he/she is available on phone, email, chat and even personally in case of urgent matters. Make sure that the accounting service company is based within the U.S. and not thousands of miles away, or else you might have a tough time contacting it when you want.



3. Make Sure their Services are Flexible

You may need to scale your bookkeeping and accounting services up or down according to your business requirements. Your service provider needs to be flexible enough to agree to this. Many women entrepreneurs tend to hire the first accounting firm or accounting company they interview. This is a wrong decision; interview several accounting service providers and check out the options they are giving you. Don't go for anything but the best amongst them.

Choosing the correct bookkeeping and accounting service provider is vital - if you go wrong it can make or break your dream business venture. You need to hence choose yours carefully, so that you can empower your business with strong accounting and bookkeeping and impeccable recordkeeping.