5 Reasons why accounting outsourcing is essential for your businesses
Introduction:
Are you tired of spending long hours poring over financial statements, dealing with bookkeeping, and managing tax preparation for your customers? As an accounting firm in Australia, you know the drill - handling your clients' finance function is crucial, but it's also time-consuming and complex. That's where accounting outsourcing comes in - it allows you to focus on your core activities, and business success and leave the financial tasks to the experts.
But is outsourcing worth it? In this article, we'll be exploring five new reasons why accounting outsourcing is essential for your business given the current market changes. From specialised expertise to data security and better business insights, outsourcing your financial tasks can provide numerous cost-effective advantages for your business. With an outsourcing provider at your side, you can provide the best service to your customers, free up resources, and stay competitive in a crowded market to find success.
So, if you're ready to take your business services to the next level with the help of outsourced accountants and explore the benefits of outsourcing, keep reading to discover why outsourcing could be the solution you've been looking for.
Key takeaways
Outsourcing to specialised providers can improve the overall business performance of accounting firms
You can get access to numerous benefits by outsourcing your accounting functions to outsourced accounting services
Accounting firms who are looking to leverage their scalability and profitability should definitely consider in investing for an outsourced accountant
Access to specialised expertise
As an accounting firm in Australia, you understand the importance of having access to specialised expert services in the finance function. However, the employer faces the challenge of retaining experts in every area of accounting. This case is especially true for small to mid-sized companies. This is where an outsourced accountant comes in.
Outsourcing companies are typically staffed with professionals who have extensive experience and training in specific areas of accounting. By outsourcing your tasks, you can tap into their expertise and gain valuable insights into your client's financial affairs.
For example, outsourcing your bookkeeping services can help ensure that your customer's financial transactions are recorded accurately and in compliance with accounting standards. Bookkeeping experts can also provide valuable insights into your client's cash flow, expenses, and revenue, helping you to identify potential cost savings, improve business performance and revenue-generating opportunities.
Similarly, outsourcing your payroll management services can help ensure that your customer's payroll is processed accurately and on time. Payroll experts can help you stay on top of changing regulations, calculate employee taxes, save time, and manage benefits administration.
Cost savings
Outsourcing accounting functions in Australia can help reduce your overhead costs. By outsourcing services, you can avoid the costs associated with hiring and training an in-house accounting team, purchasing accounting software and equipment, and providing employee benefits. Additionally, outsourcing firms can offer competitive pricing due to their economies of scale and lower labor costs.
In addition to the cost savings outlined above, outsourcing solutions can also help you save on indirect costs such as office space, utilities, and equipment maintenance. Moreover, outsourcing services can help reduce the risk of errors and fraud, which can result in significant costs if not identified and corrected early. Many organisations also reap huge savings on the high recruitment costs that come with the job hoppers leaving the job within one to two years.
Here is a quick comparison of in-house and accounting outsourcing services' back office costs to help you understand the difference.
| Cost Item | In-house Team | Outsourcing |
|---|---|---|
| Salaries | When hiring an in-house team, you will need to pay salaries to each employee, which can be high, depending on the experience and qualifications of the staff you need. | With outsourcing, you pay a flat fee or hourly rate for the services provided by the outsourcing firm. The cost is often lower than hiring an in-house team, as outsourcing firms have economies of scale and can take advantage of lower labor costs |
| Employee Benefits | In addition to salaries, you will need to provide benefits to your in-house team, such as healthcare, vacation time, and retirement plans. These benefits can add up and increase the cost of hiring an in-house team. | Outsourcing firms typically do not require you to provide employee benefits, as they are responsible for their own employees. This can result in significant cost savings for your accounting firm. |
| Training | When hiring an in-house team, you will need to provide ongoing training and development to ensure that your employees are up-to-date on the latest accounting standards and technologies. This can be a significant cost, particularly if you have a large team. | Outsourcing firms are responsible for the training and development of their employees, which can result in significant cost savings for your accounting firm. |
| Equipment & software | When hiring an in-house team, you will need to provide equipment and software to your employees, such as computers, accounting software, and other tools. These costs can be high, particularly if you have a large team. | Outsourcing firms typically have their own equipment and software and are responsible for maintaining and updating them. This can result in significant cost savings for your accounting firm. |
| Office space | When hiring an in-house team, you will need to provide office space for your employees, which can be a significant cost, particularly if you have a large team. | Outsourcing firms do not require office space in your accounting firm, as they have their own offices. This can result in significant cost savings for your accounting firm. |
| Utilities | When hiring an in-house team, you will need to pay for utilities, such as electricity and water, for your office space. These costs can add up, particularly if you have a large team. | Outsourcing firms do not require utilities in your accounting firm, as they have their own offices. This can result in significant cost savings for your accounting firm. |
| Errors and fraud risk | With an in-house team, there is a risk of errors and fraud that can be costly if not identified and corrected early. | Outsourcing firms typically have processes and systems in place to reduce the risk of errors and fraud, which can result in cost savings for your accounting firm. |
Scalability
Scalability in accounting refers to the ability of a company to adjust its accounting services to accommodate growth, changes in business operations, and other factors that impact its accounting.
Outsourcing accounting in Australia can be a game-changer for businesses looking to scale their finance functions. When you outsource process-driven tasks, you have access to a pool of talented professionals who can help you handle your accounting service, no matter how big or small they may be. These professionals can provide you with the expertise you need to ensure that your accounting services are scalable and flexible enough to accommodate company growth.
Check out the below examples to see how accounting outsourcing services can indeed level up your business' competitive advantage in the market.
- As your business grows, you may find that you need more specialised accounting services like accounts payable, accounts receivable, write-offs, bookkeeping services, etc. When you outsource services, you can find professionals who have experience in the areas you need, such as tax planning, financial analysis, and compliance.
- Outsourcing solutions can also help you keep up with the increased demand for accounting services. As your business expands, you may need to process more invoices, reconcile more accounts, and generate more reports. By outsourcing some of these services, you can free up your in-house staff to focus on more strategic initiatives, while ensuring that your accounting needs are met.
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Improved data security
Outsourcing accounting to a reputable company in Australia can significantly improve data security. The outsourced accounting company typically employs specialised security measures to ensure that clients' financial data is protected. These measures may include regular system updates, encryption, password protection, two-factor authentication, and secure data storage. In addition, outsourcing firms also use secure communication channels to transmit financial information between clients and the business, which reduces the risk of data interception by third parties.
While in-house accounting teams may have some security protocols in place, outsourcing services often have more robust and specialised measures in place to ensure the safety of sensitive financial data. Outsourcing services typically invest in cybersecurity technologies and provide regular training to employees to ensure that they are up-to-date with the latest security practices. In-house teams may not have the necessary resources or expertise to handle security risks effectively.
For example, some firms in Australia use firewalls and antivirus software to protect against malware and other cyber threats. Others use intrusion detection systems to monitor their systems and identify suspicious activity. Moreover, outsourcing accountants often have backup systems in place to ensure that data is recoverable in the event of a data breach or system failure.
Better customer services
An outsourcing provider can help businesses improve the quality of their customer services by providing more efficient and effective communication with clients. By outsourcing routine accounting functions, an in-house team can focus on providing more personalised and timely responses to client inquiries, which can result in increased customer satisfaction and retention.
Outsourcing firms in Australia can help businesses respond to customer inquiries by providing timely and accurate information. For instance, if a client has a question regarding a tax-related issue, an outsourcing business team that specialises in tax accounting can provide an immediate and accurate response. This can enhance the client's satisfaction with the service provided and build trust between the accounting business and the client.
When comparing the quality of customer service between outsourcing companies and in-house teams, it's important to consider factors such as response time, client satisfaction, and overall customer experience. While in-house teams may be more familiar with the business's operations, outsourcing firms often have the advantage of specialised expertise and resources dedicated specifically to providing quality customer service.
Outsourcing firms in Australia can offer a range of benefits such as around-the-clock support, trained accountants, streamlined team communication, and customised reporting that can improve customer satisfaction and loyalty. Additionally, outsourcing firms can help businesses scale their customer service operations quickly and efficiently, resolving all the typical issues without the need for additional team, advice, or infrastructure.
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Conclusion
As demonstrated in this blog post, accounting outsourcing is essential for your accounting business and can have a huge positive impact on its overall efficiency and potential for growth. In addition to providing more time for you to focus on the core matters of your business, accounting outsourcing services free up resources efficiently and help keep your finances organised. This in turn can lead to greater cost savings, improved customer service and better collaboration between departments.
From helping streamline daily operations to increasing profit margins, there are many advantages that arise when businesses outsource their accounts. All things considered, it’s clear there is so much that businesses can benefit from utilizing accounting outsourcing services, making it an attractive option worth considering.
AccountGlobal is dedicated to providing personalised outsourcing solutions that are specifically designed to meet the needs of your business. Our solutions help you effectively manage administrative tasks for your clients, allowing you to provide them with the highest level of service possible. You can rely on AccountGlobal to deliver exceptional services that optimise your business operations and help you achieve your full potential.
For all these reasons and more, we at AccountGlobal invite you to contact us today so we can get started on transforming your business’s processes into one unified workflow.
