Advantages and Disadvantages of Opting for Outsourced Bookkeeping Services
Posted by Mark
from the General category at
17 Sep 2024 08:22:14 am.
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Many small and medium-sized businesses have reached a point in their development and have advantages for using outsourced bookkeeping services, asking, "How can they lower costs and increase revenues?" If you are also in this situation, have you thought about outsourcing? While this may not suit every company, most can significantly benefit from partnering with an outsourcing company and their bookkeepers to help reduce costs and allow them to focus more on their core business. For several reasons, financial services have become a good choice for small and medium-sized companies to outsource.
Any company needs one or more people (depending on the volume of activities and the size of the company) to deal with the financial part. For the good functioning of a company, the financial department must work flawlessly, regardless of whether an internal department or an outsourced one provides this service. Through outsourcing you gain some time, which can be used on other things you have to do. Outsourcing services to a professional firm means nothing more than hiring a team of experts.
Use Outsourced Bookkeeping Services for Your Benefit
A professional bookkeeper knows all the tax codes and laws from A to Z - after all, it's his job. He will work non-stop for your business to keep up with the latest tax information, all at half price. With outsourced bookkeeping services, you will spend less because you will not need to pay an employee for an expensive benefits package. When opting for such financial services, you pay for them and nothing else. That reduces your salary costs, too. If you compare what you pay and the benefits you get, you will see that you will save up to 40% of your monthly expenses.
Only the most experienced and qualified bookkeepers will be involved in your financial services. Also, did you know that the most frequent victims of fraud are small private companies? That is because most companies do not have the means to interpret KPI values and metrics that show if something is wrong in the transactional activity. Financial audit operations help with the detection and prevention of cases. By outsourcing financial services, small companies will afford specialists to look for signs of fraud and implement appropriate safeguards.
Considering all your benefits, you will see that it matters a lot to have a team of financial specialists rather than only one. No matter how you look at it, having one employee to take care of your financial issues is essential. Whether you work as a bookkeeper occasionally or you have a company that offers financial services, the activity cannot be given the proper attention. The laws have hundreds of loopholes and exemptions; more than one individual is needed to find them all for you. Outsourced bookkeeping services ensure you have many specialists to ensure everything is in order.
A Team of Bookkeepers Can Help Your Business Grow
Only with an in-house bookkeeper is it harder to track what departments in your company buy or spend money on. Thus, cracks appear in the delivery of services. With a team of bookkeepers, things are entirely different because you will have enough people to follow in detail what is happening in each department. Plus, expanding and growing your business or reducing expenses becomes simpler. Financial firms can offer you lots of options, through valuable feedback and suggestions that will eventually increase your income. The responsibility for wrong application of financial regulations rests with the person authorized to perform this function and the subordinate staff.
Whatever your long-term goals are, surely the fact that you will earn more money - or that you will reduce costs after outsourcing - will help you achieve them. In essence, outsourcing gives you flexibility and many other options. According to the law, there are two possibilities for keeping a company's finances:
1) either internally, through separate departments, led by the economic director, or another person authorized to perform this function. These people must have higher economic studies.
2) be through outsourced bookkeeping services based on financial service contracts offered by people authorized according to the law.
Outsourcing Is Not Beneficial for Any Company
This phenomenon of outsourcing financial services does not always suit any company, in the sense that if the volume of activity is complex and high, then it is advisable to build an internal department (hiring people with individual employment contracts who have higher education in the field) dedicated in this field. If there is a small volume of transactions to process, you can choose to outsource this service by searching the market for companies in the field that could help you.
The outsourcing of financial services is based on a service contract that should contain at least the following elements:
- data regarding the parties to the contract
- the object of the contract - the services that the bookkeepers will provide are detailed here
- the price of the services rendered
- the obligations of the parties
- any other clause.
In the object of the contract section, the services that the companies could benefit from may differ depending on what was negotiated when the contract was signed.
Advantages and Disadvantages of Outsourcing Financial Services
The advantages of opting for such services:
- lower costs for society - unlike having employees with individual employment contracts to do these activities
- lack of other additional costs for staff (work equipment – computer, printer, licenses, consumables, etc.)
- the larger team could offer you better solutions for your company in terms of tax optimization (more diversified expertise)
- the confidentiality of financial information and implicitly of the employees' salaries is ensured
- lack of worries for the manager regarding staff turnover and their re-employment
- the firm that offers outsourced bookkeeping services assumes responsibility for the reports without the inspectors in the case of fiscal controls.
The Disadvantages of such services:
- communication is more complex; information circulates more difficult than if the person were permanently inside the company (employed bookkeepers)
- monthly collection of financial documents and delivery to the financial firm for their introduction
- the documents have a gap of one month when they are registered in the financial register, compared to the situation in which an employed bookkeeper would have registered the documents up to date.
As there are more advantages than disadvantages, you can agree that outsourcing financial services is a great way to help you with the economic part of your company.
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