What is Outsourced Accounting?
Outsourced accounting refers to the practice of hiring an external accounting firm to handle the financial tasks and responsibilities of a business instead of having an in-house accounting department. Companies can outsource their accounting needs to a professional service provider which usually comes at a reduced cost than hiring a full time accountant.
By outsourcing accounting functions, businesses can benefit from the expertise and resources of an accounting firm without the need to hire and manage their own accounting staff. Allowing companies peace of mind that their accounting needs are taken care of, reducing their costs and allowing them to focus on their business and strategic goals.
Who Are Outsourced Accounting Services For?
Outsourced accounting services are suitable for almost anyone that need support with their accounting. However, these kinds of services are more commonly used by startups, owner-managed businesses and medium-sized enterprises. It is particularly beneficial for businesses that do not have the resources or expertise to handle accounting functions internally.
Additionally, suppose you ever have questions about your accounting or need advice on your business’s finances. In that case, you have a fully qualified accountant as a resource to ask any questions you have.
What are the Benefits of Outsourced Accounting?
There are lots of benefits that can come from outsourced accounting. It offers numerous advantages, including cost-effectiveness, expertise and accuracy, enhanced focus on core business activities, scalability and flexibility, and access to advanced technology.
The main benefits from outsourcing your accounting needs is the benefit of getting professional accounting services and the expertise of an accountant for less cost than employing a full time accountant.
By understanding these benefits, businesses can make informed decisions about whether outsourced accounting is the right solution for their financial needs. We have listed all of the benefits below:
Cost-Effectiveness
As with most outsourced services, it is generally much more cost-effective to outsource your accounting needs. Hiring and maintaining an in-house accounting team comes with costs and the need to manage those employees. With outsourced accounting services, businesses can avoid expenses related to employee salaries, benefits, training, and infrastructure.
Another benefit of outsourcing is that it allows businesses to pay for only the services they need, whether it’s bookkeeping, tax preparation, payroll processing, or financial reporting. This flexibility provides cost savings and allows businesses to allocate their financial resources more efficiently.
Expertise and Accuracy
When you choose to outsource your accounting, your business will gain access to that firm’s professionals. If you choose to outsource your accounting through CN Chartered Accountants your business will be looked after by our experienced team of professionals.
Having professionals look after your finances gives business owners peace of mind. Professionals will stay updated with the latest accounting regulations and best practices, ensuring accuracy and compliance in financial reporting. This reduced the risk of errors, financial discrepancies, and non-compliance with tax laws.
Frees Up Time and Resources
Outsourcing accounting functions allows businesses to redirect their time and resources to other areas of the business. By relieving the burden of financial tasks, businesses can concentrate on activities that directly contribute to their growth and success.
The accounting firm takes care of day-to-day financial operations, such as bookkeeping, invoicing, and accounts payable/receivable, allowing business owners and managers to focus on business development, customer acquisition, product/service innovation, and other critical areas.
Scalability and Flexibility
Another benefit of outsourced accounting services is that it offers scalability and flexibility. As the business grows or experiences fluctuations in financial activities, the accounting firm can easily adjust its services to accommodate the changing needs.
Whether it’s handling increased transaction volumes, expanding into new markets, or adapting to seasonal fluctuations, the accounting firm can scale its resources and expertise accordingly. This scalability enables businesses to maintain financial stability and adapt to changing market conditions.
For businesses that have rapid growth plans, choosing an accountant that is able to scale with your business is important. If you start off with outsourcing but out grow your accountancy firm, it can then become a huge task to transfer that to another firm or set up a team in-house.
Access to Advanced Technology
Outsourced accounting firms often utilise advanced accounting software and technology to streamline financial processes and enhance efficiency. By outsourcing, businesses can gain access to these technologies without the need to invest in expensive accounting software or hardware.
The software enables faster and more accurate financial reporting, automated data entry and reconciliation, secure data storage, and real-time financial insights. These tools and systems can significantly improve the efficiency and effectiveness of financial operations.
Is It Better To Outsource Accounting?
In some instances, yes. Outsourcing your accounting allows your access to a fully qualified accountant as a much reduced cost. Perfect if your company is new or you don’t have the budget or needs for someone full time.
Our outsourced accounting serviced can be tailored to your businesses needs, so you only pay for what you require. You will also benefit from having access to specialists across tax planning and management, management accounts, statutory accounts, payroll, VAT and more.
How Much Does It Cost To Outsource An Accountant?
Generally speaking you can expect to pay anywhere from £100 – £300 per hour for outsourced accounting services. Cost will vary depending on the tasks you require. For example payroll may cost more than a one off tax return.
Is It More Expensive To Outsource Accounting?
For short-term projects or specialised accounting tasks, outsourcing often provides better cost efficiency and flexibility. However if your business requires an accountant for core functions that require close integration with your company culture and long-term stability, investing in an in-house team may yield better results and bring down costs.
Common Mistakes With Outsourcing Accounting
While outsourced accounting services offer numerous benefits, there are a few common mistakes that businesses should be aware of.
Misaligned Values & Goals
Finding an accountancy firm that aligns with your business values and strategic goals is important. As we mentioned earlier, if your business is going through rapid growth, it’s important to make sure your accountant can meet the demands of that growth and support you throughout your journey.
CN Chartered Accountants model allows us to do just that. Out firm not only covers the day-to-day accounting services that businesses require, but we also have a team of tax, corporate finance, accounts and audit experts who are able to support you on your business journey. We can even support you in the selling of your business or acquisition of other businesses should you ever need it.
Picking an Accountancy that Doesn’t Understand Your Business
Your business is important to you and has required a lot of sacrifices to get it to where it is today. When choosing an accountant, you want to make sure that they share the same drive for your business’s success as you do.
As an owner-managed business, CN knows the importance of running a business and we thrive off helping other businesses to grow and succeed. Our accountants will take the time to understand your businesses, the challenges you face and how your operations work, so that we can help provide you with advice and guidance that we would use ourselves.
To avoid these mistakes, businesses should conduct thorough research and due diligence when selecting an accounting firm. It is essential to clearly outline expectations, goals, and timelines to ensure a successful partnership. Regular communication and feedback are also crucial for maintaining a strong and collaborative relationship with the outsourced accounting team.
Need Support?
If you need help with outsourcing your business’s accounting task, get in touch with one of our chartered accountants. We offer outsourced accounting services for all businesses across all sectors. It is the perfect solution for businesses needing professional accounting and financial guidance without having to hire a full-time accountant.