Organizations these days are always under intense time and cost constraints. Therefore, it is important to focus on the core business aspects rather than non-core activities like accounting and payroll services. Accounting services form an integral part of an organization’s capabilities and systematic functioning. One of the most effective ways of managing the accounting aspect of a business is to outsource it to organizations that are better equipped and competent in the field.
While opting for outsourcing as an option, an organization would look for cost-effective solutions to systematically run non-integral activities like accounting, but also expect to achieve better control and understanding of cash flow and thereby make informed decisions. One of the most reliable options is to hire a Virtual CFO for the business to manage the accounting and finance requirements of the business.
Things to keep in mind while outsourcing one’s accounting obligations are:-
- Cost Savings
Hiring, in itself, is a time consuming and costly process. Outsourcing work to an outsider saves one money they would otherwise spend on employee benefit expenses like salary, allowances, perquisites, etc. It would also help save the time consumed in handling accounting within the organization.
2. Expert Services
Third party service providers specialize in the work they do and possess the necessary skills to increase the quality of work and keep up with the competition. This means that when you go to a bookkeeping service, you can trust that your accounting will be handled well.
- Focus on Core Business Services
By outsourcing accounting services a company can save on time, resources and operational costs and direct it towards the core business processes. This enables the organization to channelize its resources towards the achievement of the main objectives, for which the business is set up.
- Professional competency
While outsourcing, an organization shall make sure that the Service provider possess the education qualifications to be competent to handle the accounts of the company. Accounts, in India, can be handled by persons who are have done their Bachelors in Commerce, Masters in Commerce, Chartered Accountancy etc
An Organization shall outsource its accounting services to third parties who possess at least 1 years of experience in this field. Bookkeeping is an essential aspect of any business and shall be handled only by persons who have a thorough knowledge of it.
- Software Use
They must also have appropriate knowledge of the accounting tools and software programs such as:
- Profit Books
The service provider must have relevant experience in the same segment or industry the organization deals in. Every industry has certain accounting standards exclusive to it. This makes it important for the service provider to have experience and knowledge about the particular industry the organization operates in.
Outsourcing of accounting services ensures that the Books of the company are prepared on time. Generally, an organization is required to present its books of accounts, to the users of accounting information, at the end of each accounting year.
- Shelling out Information
Outsourcing requires a wide range of information to be provided to the third party vendor. It is essential for the organization to disclose all relevant information to the service provider in order to display a true and fair view of the state of affairs of the company. Some of the details a third party vendor may require to include:
- Loans and bank statements
- Purchase and Sales Invoice
- Cash details
- Cheque books
- Employee details
- Unbiased Advice
In times of financial crises, tough decisions need to be made. An outsourced firm will be more impartial in providing unbiased advice regarding these decisions. Also, due to their expertise, they also provide genuine and better advice as and when needed.
Therefore, outsourced accounting services help streamline core business operations of an organization in addition to saving of time, cost and efforts.
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