Outsourcing Accounting: The Truth About What Many Get Wrong
Outsourcing a business’s accounting needs is often met with many preconceived notions. This is understandable given that outsourcing any part of the business to a third-party entity comes with inherent risks. Nevertheless, many of these misconceptions are largely misunderstood. In truth, outsourcing accounting and other corporate needs like taxation, audits, and a company secretary in Singapore offers extensive advantages that promote business growth and optimises its financial processes. Below, we shall investigate many of these mistruths and explain why they are simply not the case when you choose to outsource your accounting.
1. Outsourcing to experts is far too expensive
In contrast, outsourcing is a more cost-effective solution than recruiting and keeping in-house accountants. Since accounting does not require full-time employees most of the time, the flexibility and scalability offered by outsourcing services save more money. Businesses only need to pay for the services they need and nothing more, and they will not be overcharged for features or skills they do not require just yet, generating significant savings.
2. It poses too high of a security risk
It is understandable to have reservations about handing over a critical part of your business’s operations to another company. However, outsourced accounting firms also take on a great responsibility by working on the data of many other clients from various industries. Thus, with their reputation on the line, it is always a given for them to invest in nothing less than the latest state-of-the-art data security systems, infrastructure, and accounting software that guarantees the safety of all the data they handle.
3. Corresponding with outsourcing firms distracts from core business tasks and principles
One of the main advantages of outsourcing to an accounting and audit firm in Singapore is that they do not require extensive correspondence to do their job. As experts in their field, they only need minimal supervision so you can have more time and energy to focus on what matters most, like increasing revenue, developing sound strategies to make that happen, and more. Of course, it is natural to expect them to issue timely updates and be readily available whenever you need them.
4. The CFO/Controller department needs to be in-house
In the wake of the current pandemic, it is already proven that businesses do not need their employees to be in the same room or building to function. Outsourced accounting services take advantage of the capabilities of modern networking to conduct their tasks anywhere and at any time.
Besides, most companies already outsource some areas of their business infrastructure like marketing, IT, and sales, so there is no sense in limiting the business’s capabilities to its immediate graphical location. And most importantly, outsourcing business accounting does not mean your financial advising team will not be present; on the contrary, they become an extension of your team and can be available whenever you need them since they work on your schedule.
5. There is no longer a need for the in-house finance department when outsourcing
Relying on an outsourced accounting firm does not mean businesses no longer need to retain their in-house finance department. This move aims to supplement their current workforce instead of completely replacing it. What’s more, businesses can choose to either completely outsource their accounting or opt for a more hybrid model, the latter meaning keeping a couple or more accounting employees on staff. In this type of structure, the in-house team will be the ones advising working together with the outsourced accountants instead of the business owner themself, resulting in the best and most efficient arrangement.
6. Outsourced accounting is no more than data entry
Accounting tasks like bookkeeping do indeed require a significant amount of data entry work, but what outsourced accounting offers is a far more comprehensive solution than just that. Outsourcing also gives businesses access to invaluable consulting services from highly certified accountants with years and years of experience.
In addition, they understand how to generate complex financial reports and derive key business initiatives from them for the business owner’s benefit. Their assistance is certainly helpful for SMBs with just a small accounting team tasked with too many responsibilities to tackle.
7. Bookkeepers are only good for tax purposes
Tax filing and preparation is a complex and confusing task, no matter the company’s size. Moreover, many small business owners typically possess multiple income streams but are not knowledgeable about claiming exemptions, tax credits, and itemising deductions that could boost their profits. Outsourced bookkeepers help in this regard by ensuring business owners make the most out of these beneficial processes as well as straightening out their tax information.
8. Accomplishing accounting responsibilities can be done without help
While it is true that any determined business owner can learn to do their accounting work, the reality is that it is not the best and most effective use of their time. More importantly, bad time management is only one of the few negatives of DIY accounting. Business owners generally start up their ventures to make their ideas come true in products and services that benefit their target market.
By choosing to go the DIY path, they become bogged down with tedious administrative tasks that, although important for business continuity, do not exactly propel growth. In short, they sign up to become the leader of their business, not take on the tasks of a certified public accountant.
Conclusion
For those not used to the world of outsourcing, it may seem unheard of to delegate something as important as accounting to another firm. But with each passing year, this process is proving to be more relevant and beneficial for businesses looking to further improve operations and maximise ROI. The scalability and expertise offered by outsourced accounting serve as an ideal alternative for companies that need to constantly stay on top of their financial reporting and strategize for the future.
So if you’re ready to go the outsourced path, reach out to us here at OneStop Professional Services. Our professional corporate services, such as accounting and bookkeeping, nominee director services, taxation, and company secretary services in Singapore, ensure time and cost savings so you can focus on what matters most － growing your business.
