Major Pros and Cons of Outsourced Accounting Services
Outsourced accounting and bookkeeping services have become the ultimate solution for small business firms. It is very important to have a trained team to handle your accounts and books because the right management of finance is the backbone of every business. With outsourced companies, you can have trained professionals to handover your financial tasks without setting up the entire in-house accounts department. The perks of having outsourced accounts and bookkeeping services are endless, but there are few limitations too. So, let’s unveil the major pros and cons of outsourced accounts and booking services.
Pro 1: Cost-Effectiveness
With outsourced accounting services you get the services at quite lower prices. It surely costs you less than hiring and training the entire accounting team. By outsourcing the accounting services, you don’t need to pay the extra costs that an employee would demand such as PTO, health insurance, retirement, Workers’ Comp, vacations, and sick leaves. Also, spending the time and patience in training the team would cost you a lot. Therefore, with hiring an outsourced accounting and bookkeeping service, you just need to pay for what you order or require. There are no additional costs included when a service is outsourced.
Pro 2: Instant Response
Being head of the company, you have so much to focus on. You can’t oversee everything and thus experts who can give you timely response to your query and needs. With an outsourced accounting and bookkeeping company, you get the time to focus on the overall growth of your business. You get an instant and proactive response so that you can make an effective plan for your future. They can figure out the red flags and give you a hint of what is coming to you in the future in terms of accounting, cash flow, and expenditure. Thus, if you have the outsourced experts who are readily active, you can surely have peace of mind.
Pro 3: Reduced Fraud
If one person is handling the accounting and bookkeeping, the chances are high that your business faces fraud. This could happen because it is quite easy to manipulate the books and enter fake expenses in the accounts. It will take quite a while for you to notice the fraud that is happening below your nose. This could occur when the employee is in dire need of money and he can think of it as “Fraud”. It is very difficult to rely on and trust someone when it comes to money handling as fraud is becoming more and more common these days.
But the outsourced accounting services, you can track every little detail of processing and reports this way you can have the entire control in your hand. Outsourced services offer 100% transparency. A dedicated team will offer you expertise in accounting and bookkeeping. Also, it is quite simple to track their performance and authenticity as they have to maintain a reputation in the market.
Pro 4: Expertise in Accounting
The outsourced companies are already well-trained, well-experienced, and expert in their job. Hence thus you don’t need to worry about the quality. Also, they are serious and dedicated to their work, so you don’t need to worry about the devotion factor.
Pro 5: Contractual job
You are not bound to pay any amount to your accounts department every month or even when there is merely any work to do. You can hire the outsourced service when you need them and end up with them as per your needs. All you need is to give them the prior notification about ending the contract with them and you can again establish the contract whenever you want (or as per the company’s accords).
Pro 6: Complete Secrecy and Privacy
When you are hiring a professional outsourced service provider, they ensure you the complete secrecy and privacy of your accounts and monetary transactions.
Con 1: Hidden cost
With the outsourced service providers, there can be few extra taxes that you need to pay. There can be some additional costs that they might not tell you in the beginning. Hence make sure that you keep the things clear and ask for any additional charges before assigning the job. By gaining clarity about payment method and the hidden services charges, you can certainly overcome this con.
Con 2: Less Control
Another limitation of the outsourced is the lack of control over the work ethics of the company. You need to reach out to them whenever you have something to ask and meeting personally every time you have a query is not practically possible. If you have your in-house account team, you can call them anytime and discuss your concern in-person. However, this limitation can be removed if there is frequent communication between the business owner and outsourced services. Discussing every detail of roles, policies, and procedures, and expectations, in –advance would help you diminish this caveat.
Con 3: Not Native
You can have immediate communication with your in-house staff, but an outsourced company may not be available always to clear your doubts instantly. The outsourced company you are hiring would not be always local or native, therefore meeting them frequently can be quite an issue. Therefore, make sure you find a firm that is readily available to respond to your questions. This should be your highest priority while selecting an outsourced accounting firm.
If you are looking for an outsourced accounting service that has all the perks you are looking for and free from all limitations which are mentioned here, check our range of accounting and bookkeeping services. We understand all your concerns and focus on providing a communication platform that can be accessed anytime and anywhere.