When is the Right Time to Outsource Your Accounting Function?
In recent years, the practice of outsourcing corporate operations has grown in popularity in the business world. Technology, as well as some difficult economic times, have altered the way business executives view the world. Among the many activities a business can outsource, accounting is one of the most common ones we’ve seen, with 37% of SMEs getting their accounting outsourced.
Before you take the leap and outsource your accounting function, it’s critical to assess the advantages and drawbacks so you can make an informed choice about outsourcing or keeping your operations in-house. So let’s dive straight in:
Why Choose to Outsource Accounting?
- Reduce Payroll Headcounts
Full-time employees are super helpful to firms, but they can be costly. Aside from the expenses of benefits and pay, internal turnover results in a loss of expertise or account-specific history. Outsourcing is a great alternative since it delivers competent teams of specialists without the additional training involved.
- Strengthen Core Competencies
Outsourcing helps companies to concentrate on their core strengths, increasing their competitive edge while strategically focusing on what their internal resources excel at.
When to Outsource Accounting?
You might be ready to outsource when you have the buy-ins needed, the budget, and the paperwork required. Don’t worry too much about the time of year or the fiscal year in which you want to start. Outsourced accounting services can reconcile your tax returns regardless of when you complete implementation.
Basically, it might be the right time to outsource if and when:
- You’re an SME or a startup that doesn’t require a full-time bookkeeper but still needs someone with more skills to handle your books.
- You’re a company of any size that cannot find a full-time employee with the right skills.
- You’re a growing company that wants to scale but struggles to expand the accounting department.
- You need temporary accounting help within a short period such as the end of the year reports, maternity leaves, or other help needed.
- You do not plan to maintain an internal finance team for your subsidiary in each local country.
Whether or not you will engage with an outsourcing service provider anytime soon, it’s still important to be aware of your options. As you examine potential outsourcing partners, start defining who among your teammates should be involved in the implementation process, which team member should get financial reporting, and how that information will be distributed.
Depending on your needs and workflow, reports can be requested on a daily, monthly, quarterly, and annual basis. Consider the kind of reports that will meet the demands of your specific organisation when you investigate outsourcing choices.
What to Look for In an Accounting Outsource Provider?
- Track Record
When looking for a potential accounting outsourcing partner, consider the number of years they’ve been in service. You can also look at their past clients and read the case studies to understand how the firm has delivered clients’ needs.
- Process & Communication
Outsourcing partners should be skilled at building and managing procedures, and they should be able to add value through a superior set of processes and effective communication. Do they have a process for their workflow which you can understand? Are they responsive, helpful and eager to assist?
- Range of Expertise
Of course, a professional accounting service provider should be fluent in setting up and maintaining accounts, reconciling, and other accounting skills. But what other skills and services do the firm offer? Many service providers stick to typical accounting activities like bookkeeping, while other providers are capable of handling more tasks, such as financial analysis for decision support. In the end, you’ll be better off hiring someone who can manage a wider range of vital tasks.
- Wide Regional Coverage
It’s wise to opt for a service provider that has a wider regional coverage in more than one major city, especially for businesses with operations and offices in multiple locations. Outsourcing with a partner who already has an established presence in all your operating locations saves up the time and cost, as well as ensuring accuracy and compliance. It is better in the long-term than having to work with multiple independent accountants across different countries.
When it comes to deciding whether or not to outsource your company’s bookkeeping, accounting, and controller activities, there is no one-size-fits-all solution. Ensure that outsourcing would provide benefits and ROI to your business. And when you’re ready to collaborate with an outsourcing partner that can help your company streamline accounting functions, connect with Ledgen Group today.
We are a preferred accounting outsourcing partner with a presence in 3 key Asian regions; Singapore, Malaysia and Hong Kong. Our satisfied clients had seen us go above and beyond in delivering professional services and advice, helping them grow through all the complexities.