Accounting is a vital business function that every company, no matter its size, needs. Accounting is “the process of recording, assessing, and communicating financial transactions,” which helps individuals and organisations understand their financial health. Accountants do this process to keep track of an enterprise’s expenses, profits, and losses.
Finance managers and company owners then utilise the processed information to make sound financial decisions concerning the prices of their goods and services, assets to buy or sell, investments, and debts.
According to the latest outsourcing statistics for 2021, accounting and IT are the most commonly outsourced business functions. The report states that most small businesses outsource accounting because of the lack of in-house accounting proficiency and skills.
Business owners also outsource to improve efficiency and benefit from offshore or outsourced accounting services when scaling up because they don’t have to build a skilled team from scratch, which takes time, money, and energy. It’s reassuring to know, too, that 78% of global companies surveyed in the study express positive sentiments about their outsourcing vendors.
Of course, companies have the option to employ full-time accountants to do their accounting processes internally. But the compelling reasons below explain why many businesses know it’s better to use offshore accounting services.
1. To maximise offshore accounting costs.
Cost reduction of at least 15% is one of the major influential factors behind outsourcing. Outsourced accounting services can net similar cost reductions with the right offshore partner.
2. To eliminate expensive recruitment and training processes for new hires.
Finding suitable accounting talent is already a costly process in itself. An outsourcing vendor passes on the savings to their clients by screening, recruiting, and training accountants on their behalf.
3. To have access to skilled accountants and their expertise.
Businesses need educated and experienced accountants to handle company finances. Fortunately, there is no shortage of board-certified and seasoned accountants who already provide high-quality offshore accounting services.
4. To take advantage of advanced accounting software and solutions at a lower cost.
Besides the right skills, businesses rely on the various automation accounting software to minimise errors and maximise time. The majority of offshore accountants are familiar with QuickBooks, Xero, NetSuite by Oracle, and the like. Most outsourcing partners also provide these tools when businesses need to lease a skilled accountant or two.
5. To offset in-house labour shortages.
Outsourcing is the fastest way to address staffing shortages. The struggle to find accountants with the right skill sets no longer becomes an issue thanks to outsourced accounting services.
6. To balance seasonal workload spikes.
It boils down to flexibility. With outsourcing, business leaders finally have the flexibility to scale up when needed and scale down when the work plateaus.
7. To assist overworked internal employees.
Virtual accountants can lighten the workload of in-house accountants. Even if a small business does not have an internal accounting team, an outsourced accountant provides work relief by giving business owners a chance to pursue business matters other than the bookkeeping aspect.
8. To offload tedious and repetitive tasks.
Several accounting tasks (i.e., payroll, accounts payable, and accounts receivable) are routine but time-consuming. Assigning these repetitive tasks to an expert overseas allows businesses to concentrate on more complex responsibilities and strategise for the future.
9. To focus on revenue generation.
Administrative tasks, including accounting, are non-revenue-generating functions. Outsourced accounting services enable businesses to work on things that bring in income and sustain this focus on revenue-generating activities.
Accounting takes work, and it’s common for businesses to get caught up in this work—a critical but non-revenue-generating business function. The reasons above show significant advantages for companies who take the first step and decide to outsource their accounting tasks. The next step is essential, too: Finding and choosing the most reputable offshore accounting service provider.