While the debate about outsourcing or continuing with in-house resources will continue for long, the undeniable fact is that outsourcing has helped businesses achieve huge cost savings without compromising on deliverables. It is the same with outsourcing accounting services, where specialized services are available at a fraction of the costs without having to maintain an entire department with its associated costs.
Accounting involves compliance issues apart from the vital inputs required for monitoring expenses and revenue, for the purpose of strategic planning. Accounting is pivotal to monitor the financial health of a business. Every business is established for the twin objectives of expansion and earning decent revenues. To achieve both, prudent financial planning is mandatory. Here are a few points worth considering why outsourcing is a good option compared with an in-house accountant in most scenarios.
Businesses get the benefits of the latest software resources
When a business decides on outsourcing accounting services, it automatically gains the benefit of access to the latest software resources. This is because an accounting service will invest in the best resources and remain updated to offer better services and to be competitive.
This will work for aggregators, because of the extent of operations where they handle multiple clients. With an in-house accountant option, this may not be possible as the funds for the latest resources will be limited and this will reflect in the quality of the output, when volumes are high.
With Server Based, Remote Access and Application Service options offered by accounting services, a client can expect to have updated books when the business commences work in the mornings as outsourcing partners work overnight to update the same.
Expertise of seasoned professionals without employing them
A business gets to use the professional expertise of the outsourcing partner, without having to employ them. Using the services of experts in the industry as employees would involve considerable costs. With the outsourcing route, a business gets to hire the services of the best experts at reasonable costs.
To look for similar service in-house, a business would need an entire team and this would not be the best ROI, if the scale of operations do not cover the CapEx or OpEx. And accounting, per se, does not earn revenue for a business. However, accounting helps a business to cut costs, to strategise and helps in maintaining the overall financial health of the business.
Meeting compliance requirements
Accounting involves meeting compliance and regulatory requirements. A business which fails to meet the regulatory requirements face the prospect of stiff penalties. And claims for a relook will involve protracted rounds of negotiation. An in-house accountant may sometimes find it difficult to meet the deadlines. This could be because of the work load which may fluctuate. This could be because of other multi-tasking requirements.
In the midst of all this, it is quite possible that deadlines will be missed. And any attempt to counter it, would involve hiring more people for a task that may not require a full team all the time. This effectively means that the outgo towards achieving compliance would be heavy. In comparison, by outsourcing accounting services, it is possible to meet all regulatory and compliance requirements within the specified deadlines, because outsourcing partners possess the resources required to meet scaled up and last minute requirements.
Major benefits of outsourcing
- Reduced manpower requirements
- Businesses can re-direct energies and resources towards core business activity
- Access to full services of expert teams
- Security of data
- Teams with required credentials and certification
With the right accounting service partner a business can flourish and focus on core business activity leaving the highly specialized tasks to specialists. And outsourcing partners take great care in ensure that the data of the clients they handle is safe, because compromised data can mean a loss of reputation and business revenue. Hence an accounting partner will be fully compliant in these aspects.
Whereas with an in-house team, processes will rely on the budgetary allotments and the expertise of the small team. Outsourcing, for the record, is an option that is also chosen by large conglomerates when it comes to certain aspects of accounting, because of its cost effective-cum-specialized nature.