What if your current accounting team is not abreast with recent changes related to Income Tax / GST or not trained for a situation like sudden attrition in your accounting team? You continue to trust their skills and availability to manage the basic accounting functions, only to realize later that there are errors, which are now irreversible due to strict Tax and other accounting rules. To face an attrition like situation you may struggle for weeks or even months to get a reliable and experienced accountant within your budget and what about the day-to-day responsibilities related to banking, tax, invoicing, payroll etc. during this gap of hiring? All this is very stressful, right?
Don’t worry!! Your answer lies with us. A well-managed experienced Team of outsourced accountants who has the experience of dealing with multiple clients on national and international levels. Such arrangement can provide you continuous accounting services without any attrition mess. Their global reach and extended customer base not only create trust and assurance but brings out the true essence of reliability one can experience after their deployment. Let’s see how outsourcing your accounting/finance function can help you tap different opportunities in the market.
But first, what is outsourcing?
Outsourcing refers to entering into a contract with a third-party service provider who will carry on your business functions against a fee that may be fixed or fluctuating depending upon the services rendered by such a third party. Such an outsourced model is a common choice among small and medium-sized businesses that want to lessen their overhead expenses without impairing efficiency.
Your accounting and finance function — own it or outsource it?
Outsourced Accounting covers 3 main areas:
Comptroller functions – A controller’s duties involve assisting in planning the operating budgets, managing financial statements, and carrying out essential payroll responsibilities but majorly involves closing the books every month, preparing financial statements, and assessing key metrics like accounts receivable, payables, and managing schedules, profit margins, etc.
Financial accounting – covers systematic processing and recording transactions for the business according to the government guidelines and accounting standards, including shipping invoices, managing receivables, tracking collections, paying vendors, etc.
CFO activities – The Chief Financial officer has similar duties as that of a controller but has additional responsibilities with regards to creating and updating budgets, forecasts, analyzing key hacks of profitability, creating a financing strategy, supporting lender relationships, providing financial data to the board and optimizing the overall financial performance of a company, its reporting, liquidity, and return on investment.
They say Master your strengths, rest can always be delegated hence it’s always wise to outsource. Hence outsourcing your business operations render greater benefits. Right from getting an expert team without having to hire one full time is the best decision you will ever make, a lot of overhead expenses will be saved, without any baggage to establish an entire unit in-house. Let’s find out what advantages an outsourced expert team can render at minimum cost and requirement.
Hiring and Training
Hiring the perfect employee is a big task! Right from crafting the perfect JD, to spending time & money on marketing & promoting the recruitment process and then making sure that the employee’s skillset & values fit perfectly with yours, this is not only difficult but also worthless if the same employee you invested in, decides to leave the organisation abruptly without giving any prior notice. Hence you need a more reliable & assured team of professionals that are committed to delivering their services as articulated in a contract.
The outsourced team of professionals are very well trained & are aware of the systems, rules, regulations, client’s expectations and requirements and hence you save a lot of time, energy and cost on their training and maintenance.
Work Authenticity
As an accounting and finance professional one need to be abreast with all the accounting principles and standards and apply them at the right time. The need to stay updated with the latest amendments and also the automation in accounting and finance is certainly the need of an hour. During such times the in-house accounting team can fall short of the required knowledge base where the ultimate opportunity costs will have to be borne by you.
Hence we need a team of outsourced accounting and finance professionals who have supervisors to administer the groundwork and who have tried and tested all the knowledge bases and systems and are the most vigilant to changes and updates. This will assure accuracy in all the accounting and finance reports and save you from the cost of cleaning expensive mistakes of your in-house professionals.
Greater Productivity
You pay an in-house accounting professional every month with a fixed package irrespective of the services he provides. This means sometimes you pay him for services he otherwise can procrastinate. Hence with an outsourced Accounting team, the contract mentions the exact services and the time within which the services will be rendered. You can also customize the package by giving the specifications of the exact services you need, eliminating the rest. This can lead to tremendous cost savings and increase the overall productivity of your accounting and finance functions.
Minimized Risk of Theft and Fraud
We trust our employees, especially the ones who have been in the company for an extended period, but we ignore the fact that employee dishonesty has been identified as the number one cause of loss in any business and is, unfortunately, a common behavior in multiple industries.
Hence one cannot simply ignore this fact and function in denial. As a business, it’s important to take precautionary measures to minimize the risk of theft. If you are appointing one single person in charge of all your accounting functions, he may misuse his position to manage funds, leading to embezzlement and other white-collar crimes. One good way to avoid this situation is to establish the required internal controls to detect and prevent fraud and mismanagement.
The outsourced accounting team brings this assurance by facilitating the timely, accurate and correct flow of information with proactive checks and balances in place. These outsourced accounting professional’s help you detect red flags and help you combat irregularities in nicks time.
The Cost Factor
Taking into consideration all the above factors, one can simply analyze the cost difference between an In-house Accounting team and the outsourced accounting professionals. Businesses usually spend 10-12% of their revenues on hiring and training, staffing and maintenance. Besides the salary you need to pay, the other overhead expenses like insurance coverage, office space and equipment, holiday pay, ongoing training cannot be avoided. Hence it’s better to hire an outsourced accounting team at a flat rate with an all-inclusive monthly fee structure while others may charge for services hourly.
Did you know Legaljini team of experienced accountants supervised by qualified Chartered Accountants n manage your complete day-to-day accounting matters On-site or Off-site under the Outsourcing model?
Legaljini Accounting Team is ready to take over your load and responsibility to keep your entire accounting updated for smooth functioning including matters related to banking, tax payments, billing, recovery of dues, payroll, audits, overall tax compliance load etc.