Businesses are not always sure what it means to outsource their accounting or bookkeeping. In this short article, Sarah Daly explains what’s involved.
Outsourcing your accounting is where you hire an external service provider to carry out certain tasks for your business. Usually the tasks involved are administrative, repetitive and time-consuming. Often, they require specialist skills. Bookkeeping, payroll, HR and IT support are examples of tasks that businesses often outsource.
Why do businesses outsource their accounting or bookkeeping?
There are several reasons why businesses decide to outsource their accounting or bookeeping. At GroForth, the most common reasons that we come across include:
- Your accountant has recommended that you outsource your bookkeeping
- You do not have the necessary skills or knowledge to carry out the tasks yourself
- You have a backlog or are struggling to keep up to date because you are too busy with other, more urgent priorities
- You can’t afford to hire an in-house accounts staff member
- The person looking after your accounts is unable to cope as your business has grown and/or become more complex
- You want to reduce costs
- You don’t have the resources to invest in the technology needed for certain tasks
- You are not confident that you are carrying out the tasks correctly
- You have high turnover of staff members
- You are struggling to keep on top of changing legislation and regulation requirements
- You are incurring penalties or fines due to filing late returns
What should you think about before deciding to outsource your accounting or bookeeping?
Business owners who decide to outsource tasks like accounting or payroll need to be confident that the service provider they choose is competent, reliable and has the necessary knowledge and skills to comply with regulatory requirements.
Key areas to look at when choosing a service provider include quality control, confidentiality, data management and control. It is important that scope of the outsourced activities is included in the service contract and that the responsibilities of each party are clearly set out. (Previously, we provided more information on what you need to think about in this article on outsourcing your finance department.)
What are the main benefits of outsourcing your accounting or bookkeeping?
For many GroForth customers, a key benefit of outsourcing their accounting is that it frees them from time-consuming administration and allows them to concentrate on the value-adding areas of their business. Outsourcing also increases efficiency and reduces costs for many customers as they can save on staff costs and equipment. (For more information on this, see our earlier blog on why businesses outsource their financial management).
Many of our customers say that they gain in other ways too. Customers cite benefits such as timely raising of invoices which can help improve cashflow and the regular reports that GroForth provides which help them to be better informed when making business decisions.
If you are interested in finding out more about outsourcing your accounting or bookkeeping and how GroForth’s outsourced finance services could benefit your business, why not give us a call? We’d be happy to have a chat and explain more about our services and how we can help save your business time and money.