Financial and Accounting Services accuprosys

Financial and Accounting Requirements

Why More and More Companies are Choosing to Outsource their

Financial and Accounting Requirements

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INTRODUCTIONCompanies are increasingly focusing on enhancing the performance of their businesses. At this juncture, outsourcing major operations such as HR related business functions and finance related functions is of common occurrence. Business heads, especially those of startups and small enterprises, have realized that it is more prudent to focus on the strategic goals of the company while all the non-core activities are

handed over to third parties. While outsourcing other functions may not be a big issue, taking financial and accounting services might appear risky. That is because it requires giving sensitive financial data to third parties. However, companies have stopped being overly paranoid.






INTRODUCTIONStartups and small enterprises often need some type of accounting and taxation aid because devoting a part of their already limited resources to such matters strains their operations. Due to the smaller workforce and limited resources, such companies cannot afford a separate accounting department. They therefore outsource their bookkeeping requirements to financial and accounting service providers. This has many advantages as well as a few disadvantages. A large number

of accounts related operations such as transaction processing and payroll management are easily subject to automation and are non-strategic tasks. Such functions are of no utility in the strategic aspirations of a company and therefore, devoting the company’s machinery to such tasks is unwise. By outsourcing these functions, companies can relieve their own resources towards completing their core strategic functions.




ADVANTAGES OF OUTSOURCINGCompanies can reduce costs to a large extent by outsourcing their accounting tasks. This is because they not only save on workforce spending but also on infrastructural requirements such as software, hardware, office space, furniture, etc. Outsourcing bookkeeping tasks to financial and accounting service providers alleviates the need to hire or train employees specifically for these tasks.

Allowing others to take care of the accounts related functions gives companies more time and resources to focus on their core business requirements. In addition, the knowledge and expertise of professional bookkeepers helps companies save up more through advice on filing for tax deductions and avoiding late fees.

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By taking services from experts, it is possible to avoid costs that may result from non-compliance issues. These include penalties, taxes and overheads. If the entire machinery of a business focuses on the management of the daily core activities of the organization, it can increase productivity and therefore, increase revenue and business growth.Companies outsourcing their accounts related functions to

financial and accounting service providers also save time. The time that would otherwise have been spent managing an accounts team would be spent on the strategic aims of the company. Not only does this mean that a company is saving up time but also that a lot of unproductive work such as overseeing accounts related work is avoided.

ADVANTAGES OF OUTSOURCING






Organizations that offer financial and accounting services hire the best talent because they have to maintain their reputation in the field. As the company is specializing in the given function, it is expected to provide only the best of the best services. To meet this expectation, such companies ensure that their clients get professional services from experts in the field. Therefore, by availing the services of these companies, organizations can

rest assured that taking such services is more productive and beneficial than hiring and training others who may be qualified for the job but may not be experts in it.Another advantage of outsourcing bookkeeping tasks is that it gives more control over the management of staff. In startups and small enterprises, it is often seen that one employee handles two different designations.






While more employees may be required at one point of time, a business may have to eliminate some at another point of time. Organizations will be able to modulate their staffing requirements better if they outsource their non-core business functions. That is because instead of hiring workers when required, for instance in the case of audits and accounting tasks, they can simply seek financial and accounting services. Companies offering such

services need to stay up to date in their technical and professional expertise to stay ahead of competition. Therefore, clients can rest assured that such service providers are experts at what they do. Companies outsourcing their requirements do not have to spend capital on training their own workers or updating their technological resources for these functions.




ADVANTAGES OF OUTSOURCINGA better quality work can be expected from such service providers rather than from in-house employees. Companies can also avoid downtime while auditing and other related tasks are in progress. Business growth can be maximized because non-productive tasks are avoided and core functions are handled more smoothly. Moreover, by outsourcing the requirements, companies can choose only those services that they need.

Many companies that offer financial and accounting services let their clients choose the accounting services they require. A contract is charted out only for the services that are required for a client’s business. Moreover, clients are also given the option of taking lesser or more services as and when required.




DISADVANTAGES OF OUTSOURCINGThe fact that outsourcing of accounting tasks has immense benefits does not imply that it is free from risks. Company accounts and financial data is sensitive and confidential. Therefore, sharing such data could be risky. Companies outsourcing their bookkeeping tasks share sensitive information on vital financial aspects of their business which may come in contact with untrustworthy parties or hacker attacks. Outsourcing also reduces managerial control over such

functions. When a company outsources a function, it entrusts it in the hands of the third party. Because the service provider is an independent entity, the client cannot dictate or practice managerial control over it. Unlike in-house employees or departments that can be monitored by a company’s management, the same level of scrutiny and monitoring cannot be applied to these third party service providers.



Companies are increasingly focusing on enhancing the performance of their businesses. At this juncture, outsourcing major operations such as HR related business functions and finance related functions is of common occurrence. Business heads, especially those of startups and small enterprises, have realized that it is more prudent to focus on the strategic goals of the company while all the non-core activities are


DISADVANTAGES OF OUTSOURCING







Taking financial and accounting services from third parties has both advantages and disadvantages. However, these services do make sense for small enterprises and startups. While taking appropriate measures to avoid associated risks, companies can integrate business function outsourcing into their operations to enhance their productivity and optimize the use of their existing resources. While choosing a financial and accounting firm, it is important to find out its level of expertise and experience with the required type of business.





The contractual agreements signed by clients as well as service providers should be clear and comprehensive for both parties. Clients should also find out what security mechanisms are held in place by their service provider to ensure the safety and security of their financial data. Service providers generally maintain standard security protocols to avoid fraud. Therefore, security threats are not very common. Financial and accounting services cover almost all kinds of businesses, be it the health care or IT, or construction and real estate.





Companies are increasingly focusing on enhancing the performance of their businesses. At this juncture, outsourcing major operations such as HR related business functions and finance related functions is of common occurrence. Business heads, especially those of startups and small enterprises, have realized that it is more prudent to focus on the strategic goals of the company while all the non-core activities are









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