Outsourced accounting solutions have always been a significant part of a lot of companies for the past decades.
Although this practice has remained to be one of the leading outsourced services, there still has been debate about its functions to every organization.
In this article, we will be addressing the advantages and disadvantages of accounting outsourcing. Which businesses can utilize this type of outsourcing service? Is it applicable to your type of organization?
Outsourced accounting solutions
Outsourced accounting solutions refers to the practice of delegating some parts or your entire accounting processes to a third party. Other companies outsource their accounting processes to freelancers, while others choose to work with outsourcing companies like OP360.
In terms of hiring an outsourcing company, you have the option of choosing an outsourcing partner that is within your geographical location. Another option is an outsourcing company that is located from a different country or offshoring.
Freelancers may charge an hourly rate, or by milestone or projects. Outsourcing companies on the other hand usually have fixed prices for each package they offer. More so, outsourcing companies also offer services that are customizable to your type of accounting needs.
As for OP360, part of our bookkeeping and accounting services include the following:
- Credit card reconciliation
- Bank reconciliation
- Inventory
- Payroll
- Budgeting
- Cashflow
These are just a few of our outsourced accounting solutions, you may go through our accounting services page to know more about what we offer.
Outsourced accounting solutions disadvantages
There are always advantages and disadvantages to outsourcing your accounting. However, given its cons, why do businesses still outsource their accounting processes?
Let us start by discussing its disadvantages:
Lesser control
This has always been one of the top reasons why some companies remain to be cynical about outsourcing. However, you can always request for weekly updates or monthly reports regarding your outsourced accounting processes. Handing over control over your books can be quite uncomfortable.
This is why it is essential to discuss certain policies, roles and procedures with your outsourced staff during onboarding before anything else.
Hidden costs
This is sometimes true to other outsourcing companies as they may charge hidden fees that are not usually shown in their websites or terms. More so, it can be quite unexpected for one task to snowball into additional outsourced services.
As a business owner, note that you have to ensure that everything is clear, especially with regards to your overall costs during the onboarding process.
Remote work
Outsourcing means that your outsourced staff will not be working within your physical office. Compared to an in-house staff, you are able to ask certain questions and communicate with your employee instantly at all times.
Outsourcing providers, however, have good communications policies that ensure easy communication in both ends.
Outsourced accounting solutions advantages
Now that we have outlined the major disadvantages to accounting outsourcing, it is time to talk about its advantages:
Cost efficiency
Outsourcing in general enables companies to save on their costs. Accounting outsourcing helps you not just save on your overhead costs, but also in providing your staff with resources required for their job. Not to mention, your expenses will start from your job posting, and of course, it is also your responsibility to provide your employees with proper training.
Outsourcing companies have accounting professionals that are always ready to handle different accounting processes needed by clients.
Security
Outsourcing your accounting processes eliminates your chances of having fraudulent activities within your company. Further, part of the core of outsourcing companies is ensuring the safety and security of all information of their clients.
In outsourcing, you will have multiple sets of eyes that will ensure the safety and control of your accounting processes.
Technology
Aside from working with dedicated and experienced accounting staff, outsourcing companies are always updated with the latest in technology. Outsourcing companies do not just invest in having the right talents but also in having the best in technology.
Having to hire an outsourcing company also grants you access to the most advanced accounting software and tools.
Outsourcing offers a lot of advantages in terms of your business growth and development. However, you also have to remember that it may not work for all. This is why, before making any decision, you also have to evaluate whether it is a good option for your organization’s current state.
