5 Myths About Outsourced Accounting
Outsourcing can scare off a lot of small business owners. Letting go of some of your control can be daunting and there will always be certain risks attached to it. But, if you choose the right expert, the payout can be great.
Many of the apprehensions surrounding outsourced accounting are misconstrued. Many are scared merely because they misunderstand. Outsourcing can actually help maximize financial processes and optimize business expansion. In this article, we discuss some misconceptions regarding outsourcing.
A lot of people will lose their jobs
The first thing that comes to people’s minds about outsourcing is the idea of downsizing. But instead, it will free some time for you or your management to focus on more value-adding activities such as a sustainable expansion of business. They allow your employees to focus on their core responsibilities and prevent them from spreading themselves too thin.
Getting outsourced help doesn’t directly mean axing off your entire finance department. Outsourced accounting can be used to supplement the in-house finance team. After all, outsourced accounting offers more than just bookkeeping.
Outsourcing only provides bookkeeping
What outsourced accounting provides is more than just data entry, it is a comprehensive assessment of your business’s financial position. By outsourcing your accounting, you gain access to consulting services you would not have been able to get from in-house accounting. Through industry-specific experience, you gain access to their pre-established systems and procedures. They are able to generate complex reports and make meaningful interpretations from them.
Smaller businesses often tend to overwork their one bookkeeper, who may have more responsibilities than they can handle. Your bookkeeper can focus more on producing accurate data by handing over some of the responsibilities to an outsourced accountant.
Finally, they can also provide guidance on some tax breaks that could be applicable to your business. By removing the friction between the ones who prepares your books and the one who prepares your tax return, you are also reducing the chances of missing some great tax credits and deductions.
It’s too expensive
The truth is, their services will depend entirely on the needs of your business, you don’t need to take on services you don’t need. You can choose to make add-ons later. The fact that you won’t be hiring full-time employees spares you so you don’t need to pay for FTE benefits.
Correspondence will be too difficult
There isn’t a bigger misunderstanding in this list than this. One thing that sets outsourced accounting apart is all the free time you get. Because they have well-established systems in place and ample experience in your specific industry, you don’t need to correspond with them often. Honestly, an introduction to your business model is necessary, but constant checking-in is not.
All the time you save from supervising a finance team will be redirected to more core business values. Outsourced accountants can handle routinary work, offer great consultation, while you, focus on activities for company-wide growth.
I can DIY my books
Don’t even attempt to go down this road. It will only lead to a messy pile of books with unorganized, miscategorized records. Tax compliance will be a nightmare and it is not something you want to be cheap with because you often end up with more expenses if you don’t do it right the first time.
By taking on an outsourced accountant you buy yourself freedom and flexibility you can’t get anywhere else.
Outsourcing can be perceived as too risky because not a lot of people do it. There is a general fear of the unknown. Therefore, you must attempt to understand the unknown to stop the fear. In layman’s terms, no pain, no gain. For anyone looking to maximize their operations and ROI, it is a reasonable risk to take.