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Wednesday, August 27, 2014

Benefits of finance and accounting outsourcing

Finance and accounting outsourcing
Consistent bookkeeping is vital for accurate financial records
By Phil Steel 

The health of a business is often determined by the health of its business processes, including the finance and accounting branches. A business owner is only able to make educated decisions for his business if he is aware of the current situation of his business.

Knowledge of the payroll, invoicing or monthly bills, the capital flow, risk management and other financial markers will help a business owner determine whether he is in a place to grow his business, to explore new avenues or new opportunities, or if he needs to batten down the hatches, restructure the business processes, tighten the capital use, and seek new financing or partnerships.

One of the greatest challenges a business owner will have in this process is finding the time to ensure that the finances, accounting, and bookkeeping are up-to-date, organized, and filed appropriately. To help ensure this happens, many small business owners will need to consider finance and accounting outsourcing –this is one of the fastest growing outsourcing areas.

Finance and accounting challenges are intense and time consuming in any industry. No one will argue that finance and accounting is the heart of any business, and all potential growth will be reliant on the strength of the processes developed around these areas. Following are a number of benefits of finance and accounting outsourcing.

Effective, consistent bookkeeping

Perhaps one of the most time consuming aspects of a business’ paperwork is the bookkeeping. Bookkeeping is defined as the recording of all day-to-day financial transactions of a business. This includes purchases, sales, receipts and payments. Bookkeeping can be as simple as inputting all activities into a basic ledger, creating excel sheets to capture information, or using defined software programs to capture the same information. This information is then used by accountants to file pertinent forms and such to government, to pay payroll and corporate taxes as well as to find out the financial health of your business.

Bookkeeping is an essential service—it is important for business owners to know their own limitations and accept that there are many benefits of outsourcing bookkeeping for fast growing companies (one of them being the consistent amount of time that can be put into the bookkeeping by outsourcing this service to another organization or company). A business owner does not have to tack this on to the end of the day or week’s activities and hope to find the time or energy. They can be assured that someone’s full attention and energy is focused on this task.

Financial expertise

Whether we want to admit it or not, we often need the help of those with more expertise than us – this is quite common when it comes to the specific areas of finance and accounting that make the option to outsource that much more viable.

Outsourcing to an organization or company with such expertise gives you immediate access to the knowledge, experience and management of that team without having to take the time or resources to build it. You gain a comprehensive multi-disciplinary team focused on strengthening your own business processes – you also have access to a highly skilled team with access to the latest technology.

Most businesses will immediately realize the impact of having access to the functional expertise noted above, but the benefits will also include having access to improved market information and trending, business cultural growth, better change management, and a more strategic view of the business status and potential growth.

The gift of time

If a business owner is content that the finance and accounting processes of his or her business are sound through effective outsourcing, he or she then can appreciate the newly acquired gift of time. By removing the ongoing day-to-day work associated with maintaining the bookkeeping, a business owner can focus on what he wishes to achieve most – the growth and stability of his company.

The time consuming daily processes of bookkeeping are removed; there is no guess work in whether the accounting is being done effectively since you have vetted the company you have hired and they have a good reputation. They are keeping you alert to the financial stresses or risk management. This is what a business owner wants to have – comfort in their processes so they can shift their attention to creating growth and exploring opportunities.

The bottom line is that the benefits of finance and accounting outsourcing can be felt immediately by many business owners, and these will have the potential of creating stronger business processes and a greater focus on growth.

About the author: This article was written by Phil Steel, an outsource consultant who offer services like bookkeeping, accounting, audit, payroll management, and much more, for fast growing companies to meet their financial needs.

Image license: Royalty Free or iStock source: http://pixabay.com/en/calculator-accounting-number-404000/