Outsourcing Accounting – What You Need To Know

As small business start to grow, the need to separate the different business function arises. Separating business functions will enable the business to increase its efficiency offer better services and at the same time enable seamless transition as the business grows to become a large company. In today’s business environment outsourcing have become a popular way to separate the different business functions, increase the business efficiency at low costs. Outsourcing accounting services is not only common to growing business, but it is also popular with the large business organizations, it offers numerous advantages that help business achieve its goals and objectives efficiently, some of the benefits of outsourcing accounting services are

– More time to focus on other business issues. Accounting duties can consume all your time and leave you with no time to manage or attend other business functions, but outsourcing accounting services will eliminate this problem.
– Increased efficiency. When you hire professional accounting services, efficiency in the business will increase.
– Reduced risk of fraud and corruption.

These are some of the benefits of outsourcing accounting services. Accounting is a sensitive business function thus when a business is looking to outsource accounting services it is crucial to be equipped with sufficient information required to hire the best firm to offer these services. This article will explain 8 things you need to know when outsourcing accounting services.

1. The cost
Cost is one of the major factors you ought to consider when hiring accounting services. It is imperative for you to know the cost involved in outsourcing accounting services and ensure the set budget will cover the expenses involved. Numerous firms offering accounting services will charge different prices; you should strike a rational balance between the service quality and the cost of these services. You should not compromise the service quality due to the reduced expenses, in the long run, the cheap accounting services might turn out to be more expensive as it might be an avenue to fraud and corruption hence outsource competent and reputable firms to offer the accounting services.

2. The industry experience
Accounting is an art that requires highly qualified personnel due to the complexity and importance of the area, for the business to thrive it is imperative that the accounting matters are treated with due diligence. When outsourcing a firm to offer accounting services it is crucial to check how long the firm have been offering these services, competence in accounting does not result from mere certification, one has to have some experience dealing with real world accounting duties hence it is important to hire a firm with highly experienced staff. Hiring a firm with has experienced staff is an assurance that your business will receive high-quality services, and you will not have doubt when spending your money to hire the firm’s accounting services.

3. Certification and qualification of the company’s personnel
To practice accounting in the field (real world) one has to be certified by the relevant accounting bodies. Certification of accountants helps enforce a certain standard of the accounting services; the accounting bodies ensure that the accountants going in the business world to offer accounting services meets certain qualifications and can offer the said services. When outsourcing accounting services, it is important that you check the certification of the firm and the staff to ensure you will get the value of you money. Qualification for accountants are on different levels, it is ideal to outsource accounting services from a firm with highly qualified accountants, accounts who can offer wide range of accounting services, this will act as an assurance that the services you are outsourcing are of high quality and will contribute to the growth and effective management of your business.

4. The technology applied by the firm
Everyday technology continues to play a bigger and bigger role in the management of the business. Today technology is at the “heart” of accounting, most of the accounting operations have been automated allowing for a high accuracy, security and speed in completing accounting operations increasing the overall efficiency in accounting. When outsourcing, accounting services ensure to hire a firm that utilizes the recent technologies in offering the accounting services. Automation in accounting will guarantee the security through cloud backups and data encryption, this increases the efficiency and security of business data, it also minimizes the likelihood of fraud and corruption hence it is essential to outsource accounting services from a firm that utilizes the technology.

5. Range of services
Accounting firms offer different financial services when outsourcing accounting services you should check the range of services provided by the accounting firm. The range of services is matters a lot because it is important to outsource accounting firm that offers comprehensive accounting services that will provide all the accounting services needed by your business.

6. Industry reputation
Knowing the reputations of accounting firms is essential, outsourcing accounting firm is entrusting the funds of your business to another firm/person thus you have to be sure that the accounting firm has a good reputation. Some accounting firm has a bad industry reputation associated with fraud and corruption hence it is imperative to check the reputation and ensure you are hiring credible and accountable firm that will take good care of the firm’s funds.

7. The duties to be delegated to the accounting firm
When outsourcing accounting services, it is always ideal to ensure that the tasks of the hired firm are clearly stated as and put in writing form. This will help you and the hired firm act within the agreed scope and hence avoiding the misunderstandings and enabling smooth flow of business.

8. A viable insurance cover
Besides the written agreement it is essential for the accounting firm to have a valid insurance policy for civil liability for losses that could arise in the course of delivering the services. The client should assure that the amount to be covered is enough regarding the complexity and scale of its business.

These are the factors that every business consider and know about when outsourcing accounting services to get the desired quality of services and help in achieving the set goals and objectives.