5 Reasons to Outsource Your Bookkeeping
Running an organization is challenging. Staff can end up prioritizing core business operations — such as managing employees, serving customers and bringing in new funding — over tedious accounting and advisory tasks. Plus, the accounting rules can be overwhelming.
However, access to timely, accurate financial data is critical to your organization’s success. Could outsourcing accounting tasks to a third-party provider be a smart business decision? Here are five reasons why the answer might be a resounding “Yes!”
- Lower Costs and Scalability
Your organization could hire a full-time accountant, but the expenses of hiring an employee go beyond just their salary. You also need to factor in benefits, payroll taxes, office space and equipment. It is one more employee for you to manage — and accounting talent may be hard to find these days, especially for smaller organizations. Plus, your access to financial data may be interrupted if your in-house accountant takes sick or vacation time — or leaves your organization.
With outsourcing, you pay for only the services you need. Outsourcing firms offer scalable packages for these services that you can dial up (or down) based on the complexity of your business at any given time. Outsourcing also involves a team of accounting and advisory professionals, so you have continuous access to accounting and advisory services without worrying about staff absences or departures.
- Enhanced Accuracy
Do-it-yourself accounting can be perilous. Mistakes in recording transactions can have serious consequences, including tax assessments, cash flow problems and loan defaults.
Professional accountants are trained to pay close attention to detail and follow best practices, minimizing the risk of errors. Outsourcing firms work with many organizations and are aware of common pitfalls — and how to steer clear of them. They’re also familiar with the latest fraud schemes and can help your organization detect anomalies and implement accounting procedures to minimize fraud risks.
- Expanded Access to Expertise
The accounting rules and tax regulations continually change. It may be difficult for you or an in-house accountant to stay updated.
With outsourcing, you have experienced professionals at your disposal who specialize in accounting, tax, and other services. This helps ensure you comply with the latest rules, accurately report financial results and minimize taxes. In addition, as you encounter special circumstances, such as a sales tax audit or a merger, you can quickly call on other professionals at the same firm who can help manage the situation. If your provider lacks the necessary in-house expertise, the firm can refer you to another reputable professional to meet your special needs.
- Improved Timeliness
Timely financial data helps you identify problems before they spiral out of control — and opportunities you need to jump on before your competitors do. Outsourcing professionals typically use cloud-based platforms and set up automated processes for routine tasks, like invoicing and expense management. This improves efficiency and gives you access to real-time financial data to make better-informed decisions.
- Reliable Security Protocols
Cyberattacks are a serious threat to any business. Stolen data can lead to monetary losses, operational downtime and reputational damage.
Many organizations are understandably cautious about sharing financial data with third parties. Reputable outsourced accounting providers use advanced security measures, encryption and secure software to protect your financial data and client records from hackers. However, not all providers have the same level of security. So, it’s essential to carefully vet outsourcing firms to ensure that your organization’s data is adequately protected.
Work Smarter, Not Harder
At any given moment, organizations are being pulled in multiple directions by clients, employees, lenders, investors and other stakeholders. Outsourcing your accounting helps alleviate some of that stress by ensuring your financial records are up-to-date, accurate and secure. DZA and its team of advisory and accounting specialists have a special nonprofit and governmental organization focus — contact us for more information on how to facilitate the outsourcing process or to learn more.
