Should You Outsource Your Accounting?

Should You Outsource Your Accounting?

By admin , 6 de May de 2021

 

The global business process outsourcing market worth is projected to reach an all-time high of $405.6 billion by 2027. That’s an unfathomable amount of money directed towards outsourcing services. It’s also a good indication that many businesses choose to outsource one or more of their business processes to an outside entity from their own.

 

So if you’re considering outsourcing the bookkeeping or accounting services of your small business, take a look at what you need to know down below before making a decision.

 

What is Outsourcing?

Simply put, outsourcing is the action of one company hiring another company to perform its specific internal services. When you consider external accounting or bookkeeping services, you want to hire an outside service to fulfill all of your small business accounting and finance responsibilities.

 

Benefits of Outsourcing Your Accounting

There are many reasons companies choose to hire external services for their internal practices. The benefits of accounting outsourcing for your small business include the following:

 

Saves your Company Money: Outsourcing could be the most cost-effective way of covering all accounting responsibilities without having to hire a full-time employee. A professional accountant knows the ins and outs of the financial system, meaning they could also find more tax breaks and save you more money in the long run.

 

Saves you Time and Resources: As the owner of your small business, your time is invaluable. It could be better spent on other aspects of the company without worrying about getting financial documents in order.

 

You’ll have an Expert at Your Disposal: Hiring an experienced accountant or firm to take over your company’s finances means you have extensive knowledge and expertise working for your business’s best interest.

 

A Professional will Streamline the Service for You: Where it could take you weeks of stressful planning to put together a financial report, an expert could do it in days.

 

Things are Less Likely to Fall Through the Cracks: If you are pulled every which way, looking after every department in your business, you could miss important deadlines. Having one set of eyes, and a focused brain on the project will ensure a higher standard of work with lower financial risks.

What a Bookkeeper Does for Your Business?

A bookkeeper helps with the day-to-day financial activities for your business to free up more of your time. It’s always a good idea to oversee the activities and check in with your bookkeeper through regular updates and reports. But letting a bookkeeper do the actual work is usually more efficient and lets you focus on handling your business.

 

What does a bookkeeper do? A good one does more than just input your monthly expenses and income, although that’s certainly an important aspect of the job. Your bookkeeper should be your part-time partner and keep you up to date, providing most if not all of the following:

 

  • Accounts payable
  • Accounts receivable
  • Bill payment
  • Detailed general ledgers
  • Payroll and check registers
  • Bank reconciliation
  • Financial statements
  • Customized reports
  • Budget preparation
  • Business and workers’ compensation insurance
  • Employee health insurance
  • Payroll services
  • Payroll cheque writing
  • Payroll tax returns
  • Monthly, quarterly and annual payroll reports
  • Federal, provincial and local tax reports and filings
  • Business tax returns and tax planning
  • Income tax returns
  • Tax representation in the event of an audit

 

Many of these capabilities overlap with what your accountant does, although the bookkeeper provides your financial foundation. Much of the bookkeeper’s work feeds into a larger, comprehensive accounting function that your accountant completes – the most important part are your corporate and personal taxes.

 

When Should You Consider Hiring External Services?

The first question you have to ask yourself is whether outsourcing your accounting needs realistically works for your business. Hiring a large accounting firm to cover the full service of all accounts can take a considerable hit from your small company’s net profits. However, it still could when hiring an in-house, full-time employee.

 

Therefore, considering cost efficiency and the standard accounting or bookkeeping fees of these services is a vital aspect of when to outsource. If you’re losing money on this service, it could be in your best interest to pass on external hiring. However, if you can find accounting or bookkeeping services that can save you time, stress, and overall resources, it could be a perfect fit.

 

Which accounting package is best for a small business?

The financial service packages you can hire out will depend upon the entity you are working with. It is best to research the individual accountants and bookkeeping services offered around you, with those provided by small, medium, and large accounting firms. Typically, outsourced services provide full coverage of all accounting and financial services for the company.

 

Source: Intuit Quickbook-QuickBooks Canada Team

https://quickbooks.intuit.com/ca/resources/finance-accounting/should-you-outsource-your-accounting/

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