According to recent statistics, 37% of businesses spend more than USD 5,000 for the administration of finances and 33% of these firms devote more than 81 hours on finances every year.
Whether you run a real estate business, textile firm, a digital marketing agency or any other industry, every small business needs to manage its books. Some entrepreneurs handle it themselves and others hire an in-house professional.
However, with an increased need for quality accounting services to fulfil business demands, outsourcing accounting activities are gaining popularity in recent times. You won’t have to look after monthly expenses, spend too much time every year on taxes or pay hefty prices for hiring skilled professionals.
Let’s consider some pros and cons of outsourcing accounting activities. These will help you make an informed decision while looking for an accounts outsourcing partner.
Pro: You Can Save Money Spent On Your Financing and Accounting Activities
Even if you can hire a resource for handling accounts, it is hard to employ expert professionals, since small businesses have financial limitations. The outsourcing partners, however, work with various clients and have a highly experienced team along with the latest tools and technologies. They can handle your books, maintain regulatory compliance and reduce costs of business in the longer run.
Con: You Will Have Comparatively Less Control on the Operations
With an in-house team, you can get information anytime you want. You just have to walk down the hall, get updates and get things done in your own way. While handling books yourself gives you full control of the functioning, the same might not be the case when you opt for outsourcing services.
Pro: You Can Receive Enhanced Support for Finance and Accounting Activities
The outsourcing providers have a full team working on your books, and additionally, they keep brushing up their knowledge of finances, accounting and compliance. This leads to an increased quality of work, accurate books and reduced compliance issues.
Con: You Can Face Communication Challenges due to Physical Distance
With in-house financing professional, you can communicate easily in minutes. However, communicating with your outsourcing partner can be a challenge. You can’t communicate face-to-face always, and at times, entrepreneurs don’t even know who exactly is working on their books.
Pro: You Can Utilize Saved Time on Other Business Operations
Since someone else will be handling your accounts, you can use this extra time for other important business operations. You can align your company’s tasks, solve difficult matters and avoid the headache of financing. Moreover, you can seek advice from your outsourcing partner for enhanced decision-making.
Con: You May Encounter Issues Related to Sensitive Information Security
While hiring an outsourcing accounting partner, you trust this firm with your data, your employees’ sensitive information and other such data crucial to your company. This poses a risk of your data being misused by the outsourcing partner or any member of their team.
Choosing the Right Accounting Outsourcing Provider
You can easily reduce your burden of accounting and finances by choosing the “right-fit” outsourcing partner. Although some cons of outsourcing accounting do exist, all these can be eliminated if your outsourcing firm has enough experience in the field and can cater to your needs efficiently. Hence, outsource your accounts for enhanced decision-making and heightened business operations.