The outsourcing of accounting services refers to the handling of the accounting operations of any organization by an external company specializing in such projects. Earlier, accounting services were outsourced by large enterprises and mid-market companies, but today, smaller and smaller businesses are jumping the bandwagon regarding the outsourcing of accounting projects.
According to a survey in 2020 led by Deloitte, one of the prestigious Big Four, 70% of the businesses who opt for outsourced accounting projects cite that the primary reason for their decision is the reduction in cost as compared to the hiring of staff to do in-house accounting for the company.
In the same survey, 40% of the respondents, opting for outsourcing services for accounting, cited their reason being the ensuing flexibility.
This flexibility can be examined in the various aspects as shown below:
1. Flexibility to the finance of the company
In order to have the financial reports of an organization through in-house accounting, the organization is required to hire individuals specializing in the same.
As the individuals are considered to be the employees of the company they are obligated to receive the salary benefits, incentives, additional perks, PTO, sick leaves, etc.
Outsourcing accounting services are noted to be competitive, especially when it comes to prices. It has been noted that the cost incurred for the hiring of the external services for accounting projects is much cheaper than the hiring of in-house staff for the same.
2. Flexibility with respect to the number of employees
The hiring of additional individuals to maintain the bookkeeping and the financial statements may or may not result in the expected outcomes. With the help of outsourcing services for accounting purposes, the number of employees can be optimal and those who are slacking off or being deadweight in general can be dealt with accordingly.
3. Flexibility to accommodate the changes
With time, many changes with respect to the rules surrounding bookkeeping are made. The in-house staff may find difficulty in accommodating these changes; however, an external party who is well-versed in dealing with such unexpected situations can provide better results.
Apart from this, the outsourced accounting services are well-equipped to deal with unexpected situations within the company which include a sudden rise or fall in the financial health of the company.
4. Flexibility with respect to handling the internal operations
By outsourcing the accounting services, the company can divert most of its attention towards the core operations of the company, while leaving a skilled external party to do the bookkeeping.
The outsourced accounting services usually recruit trained professionals with a lot of expertise to solely cater to these matters. So, even if the company has a sudden rise in the demand for its products, a sudden rise in revenue, or a sudden fall. The employees of the company can deal with it on their own while the bookkeeping is left to the experts.
Rather than burdening the staff with the preparation of financial reports and such, the company can mainly focus upon the regular operations being conducted in the company. The company is left to deal with the major as well as minor aspects of the internal management while leaving the accounting services to deal with the payrolls and auditing and such.
5. Flexibility to pursue competition
The outsourced accounting services offer a competitive advantage to the company as compared to the other companies hiring in-house staff for the same. With a team of specialists to prepare the financial reports, the company has the freedom to focus on operations. And has the advantage of speed to observe the market conditions as compared to that of the other companies lacking the same.