5 Signs That Indicate You Should Outsource Your Company’s Accounting Operations

Companies often outsource some of their processes to cut down on costs, to devote their limited time and resources on activities that improve their productivity and help them grow. Operations are no doubt the most important aspect of any business, but one cannot undermine the importance of maintaining accounts. This is because accurate financial information often plays a pivot role in making business decisions. Unless you have a clear understanding of cash flow, available deposits and margins, you can’t think of expanding or taking steps, which enable the company to grow to the next level.

Here are a few signs that can help you decide whether you should keep the company’s accounting operations in-house or outsource them.

1. If your company is small and you don’t have enough work that keeps a full-time accountant occupied, then it is futile to keep one on your rolls. The basic functions like entering and paying bills, issuing invoices, monthly close process, performing payroll etc. should be outsourced.

2. The accounts managed by a professional firm look completely different and are devoid of any obvious inconsistencies, errors etc. This is important if you have plans to raise capital from financial institutions for expansion of your business.

3. If you feel that you are missing on potential tax savings as the expenses are not classified under proper heads, it’s time to outsource the accounting operations. This happens if you do not have a tax professional preparing your accounts and some deductions go unreported due to improper classification.

4. A small business with less than 100 employees is more prone to fraudulent activities as they generally don’t have a controller or a CFO. In absence of these, any abnormal activity happening in either transactional or billing data goes unnoticed. If the accounting operations are outsourced, there are fair chances that external audits can result in detecting the fraud signs. They can then be taken care of by implementing proper fraud protection control methods.

5. If you need a complete accounting team that comprises of staff, controller and CFO but your budget doesn’t allow you to hire them, then also you should go with outsourcing.

Outsourcing the accounting operations is increasingly becoming popular among the organizations. This is because it helps them in optimizing their operations and at the same time they don’t have to allocate resources for it, which helps in reducing the overhead cost.