Not all entrepreneurs have the time to handle all the accounting functions related to their business. These functions can be time-consuming and it may keep them from performing their main tasks. Let’s face it, not every business is good at crunching numbers. They dread the thought of preparing trial balances, income statements, and other financial documents.
There are many accounting functions you need to handle when managing your business. However, letting your in-house team handle all those functions can overwhelm them. This is why most businesses choose to outsource accounting functions. While outsourcing is a good option for your company, you may not be sure which accounting function to outsource. This article will guide you on the accounting functions you can outsource to a provider:
Which Accounting Services Can You Outsource?
- Accounts Receivable/Accounts Payable
- Records Management
- Financial Reports Preparation
- Bookkeeping Services
- Controller Services
- Financial Planning and Analysis
- Fraud or Forensic Accounting
- Tax Reporting and Filing
- Payroll Processing
Which Accounting Services Can You Outsource?
According to a survey by Clutch, 37% of small businesses outsourced their accounting functions to a provider. But while outsourcing accounting functions can save you time and money, not all can be outsourced to a third-party provider.
1. Accounts Receivable/Accounts Payable
Keeping track of payments to and from other companies can be cumbersome. This type of accounting service ensures that customers pay on time. It also includes other services, such as expense reporting, payment approval, order management, financial reporting, debt management, customer billing management, and forecasting.
Outsourcing AR/AP to third-party providers means you will transfer the responsibility for efficient management. If you are still using paper invoicing and optical character recognition (OCR), you may find processing AP and AR challenging. By outsourcing, you get access to better tools such as computer systems, customized invoicing, expense management, and other software.
Aside from ensuring timely payments of your accounts receivables, the outsourced professional can also do other functions related to the role, which include the following:
- Reconciling of customer accounts
- Commission calculations
- Financial sales reporting
- Preparation and processing of monthly journal entries
- Maintaining the billing system
- Maintaining accounts receivable files and records
- Investigating and resolving any irregularities or inquiries
- Working with required accounting software such as MYOB, Quickbooks, or Xero
2. Records Management
Record management and bookkeeping is another popular outsourced accounting service. This task is continuous and repetitive, which can consume much of your time. Records management involves ensuring that all documents are in order in preparation for tax season or an audit. Outsourcing frees your team from having to do such mundane tasks.
Outsourcing gives you access to cloud technology software, making record management much easier. It gives you access to thorough and accurate reports to help you make smart decisions related to your company. It will allow you to use the available financial data, which could have a future impact on your business.
Outsourcing records management gives you access to professionals with experience in what they do. It can be an excellent option if you plan to retain your records for a long period of time. Just think of the savings you can get by not hiring an additional staff to maintain records as well as the expense of getting record management software. In addition, you will not sacrifice the availability of the records when you need them.
3. Financial Reports Preparation
Preparing financial reports for external and internal use can be time-consuming for your in-house team. In addition, it may require the expertise of a CPA to consolidate your expenses and earnings through financial statements. The outsourcing provider can also help you track your cash flow.
An outsourcing provider will help maintain your accounting books by recording and updating all pertinent information while ensuring the accuracy and security of your financial data. They can prepare the financial report for full disclosure of financial performance with board members, stakeholders, or the general public.
The outsourced provider can review your organization’s financial conditions so they can prepare a thorough and reliable financial report. As a result, you get reliable and timely results from your outsourced accounting team. Outsourcing gives you access to independent and professional advice to solve the cash flow issues of your company and ensure its smooth functioning.
4. Bookkeeping Services
Bookkeeping entails a lot of time-consuming activities such as balancing ledgers, processing employee expenses, time and expense management, invoice processing and payments, multi-entity and multi-currency consolidation, order to cash management, and others. These tasks are essential in keeping your business organized.
Outsourcing bookkeeping services will help you keep your books up to date. By working with an outsourced provider, you will have all the numbers needed to fill out tax forms quickly so you will stay compliant with the IRS. Outsourcing can also help you ensure timely payments of salaries. They can also help you with other payroll-related functions such as withholding taxes, time tracking, and others.
With outsourcing, you get access to comprehensive reports that can increase visibility and lead to an informed decision-making process. More importantly, if you see red on your tax documents during the season, outsourcing your bookkeeping will help you glide through tax time. Finally, you will have easy access and view the right documentation for you, your employees, and CPA.
5. Controller Services
Outsourcing accounting services can help you grow your business through strategic guidance and management. In addition, the outsourced provider can help you with accurate and timely financial reporting and insights. Controller services usually include the following:
- Audit reporting
- Management reporting
- Compliance management
- Transactional processing oversight
- Employee and vendor communications
- Cash flow analysis
- Key performance indicators reporting
- Policy and procedures guidance and adherence
By outsourcing, your chosen provider can draw up cash flow projections for a certain period. This will help you see what changes need to be made and when. This will help you predict slow periods and plan what to do with them in advance.
Outsourcing controller services can help you predict future costs and revenues to make a well-informed decision. This way, you will be able to identify your most valuable clients or customers, business profitability, determine future investments for your growth plan, and how to minimize expenses.
6. Financial Planning and Analysis (FP&A)
Financial planning entails a comprehensive evaluation of your company’s financial condition which can be time-consuming. As a business owner, you need to understand the current financial condition of your business and the direction it is headed. Financial planning helps predict the probable success of various paths or projects and considers all the factors that can affect your company, such as the economic market and business conditions.
Through financial planning & analysis, you can determine which projects are likely to succeed and the possible investment for each project. Outsourcing gives you access to professionals who can help safeguard your assets and your employees. These professionals are knowledgeable in interpreting financial data and translating them into less technical terms.
Outsourcing FP&A allows you to work with experts who advise you on which model or assumption best fits your business based on the problem at hand. They know the best practices you can implement to benefit each customer and your business.
7. Fraud or Forensic Accounting
Fraud or forensic accounting deals with companies that have been victimized by fraudulent activities. It also works with companies whose accounting contact has left with inaccurate books. This type of accounting can help reconstruct the records of a destroyed business, restore missing documents, and others.
Aside from that, this accounting service helps analyze internal processes to ensure productivity, improve security, and protect assets from future fraud attempts. Outsourcing fraud or forensic accounting helps you mitigate the impact of a data breach, compromised security programs or internal fraud.
The outsourced provider will help sort out your accounting and bookkeeping records. They will scrutinize every area of your business and identify possible loopholes to prevent future errors. The outsourcing company can help optimize your accounting process and eliminate unwanted recordings.
8. Tax Reporting and Filing
As a business owner, it is important that you also stay compliant with local, state, and Federal tax laws. Non-compliance may subject you to stiff fines and penalties from government regulators. It may be difficult to monitor your tax payment schedules and pay the corresponding fees on time.
By outsourcing to a third-party provider, you can minimize vulnerabilities to various accounting and financial computation errors that could impact your business operations. You will work with a CPA who can submit and declare your taxes properly before the deadline. They will help you avoid tax penalties and maximize your benefits through compliance with tax laws.
The outsourced provider is knowledgeable about the changing financial and tax regulations when it comes to city, state, and Federal laws. They will help you stay on top of new tax or accounting requirements and possible changes looming on the horizon.
9. Payroll Processing
Timely processing and payment of payroll is important for employee satisfaction and lower churn. By outsourcing payroll processing, you can be sure that your employees will be paid on time and correctly. You can spare yourself from any liabilities related to mistakes in payroll or income tax returns, which can subject you to stiff penalties.
Outsourcing firms have access to the latest payroll software, which can automate your payroll process. This can make your payroll functions more efficient and reliable. Outsourcing payroll also allows you to stay updated with state or Federal regulations. A National Small Business Association study revealed that business owners pay over $83,000 in regulatory costs during their first year of operation.
The outsourced provider will integrate data to time, attendance, and benefits into other HR software. This will help improve data accuracy so you can easily access information through a single sign-in.
Accounting is a time-consuming task that may cause your in-house team to be away from what they should be doing. Outsourcing saves you time and money so you can focus on the actual tasks you should be doing.
Why Should You Outsource with airisX?
Outsourcing allows you, as a business, to focus on your main competencies and operations and forget the hassle of sharp learning curves when the task falls outside your company’s core area of business.
By outsourcing to a leader like airisX, you will be able to scale up quickly by getting the right resources, processes and technological infrastructure. No matter what your scaling requirements are, airisX will give you the best optimised solution and you will be able to focus on satisfying your customers. Your back office operations will be simplified, giving your users a high-quality experience.
Contact us at contact@airisx.com to get a customized solution tailored to your business needs.