Nice, short, to-the-point article in Accounting Web this week that I wanted to share encouraging folks to outsource their accounting function.
Accounting and finance are often among the first set of duties to be outsourced. These tasks, which require considerable attention to detail and expertise, can help businesses protect themselves from financial and legal hazards while also finding creative methods to improve their bottom line. An outsourced accountant can help your business organize (or reorganize) your books, prepare its taxes, generate long-term financial projections, establish an eCommerce platform and much more.
They illustrate how opportunity costs should factor into your decision, using a simplified example:
Suppose that your business’ accounting responsibilities require 100 hours of work per month. If you consider each hour of work to be worth $40 (or whatever number you deem fit), this means your business’ total accounting costs will amount to $4,000 per month ($48,000 per year). However, if your business could generate $50 worth of revenue for every operational hour that it gains, this means you are missing out on $5,000 per month ($60,000 per year) in positive cash flows.
They do a nice job of outlining the benefits to outsourcing as well:
- Cost-effective
- Access to expertise
- Access to new systems, structures & technologies
In fact, according to Deloitte, two of the most common reasons for outsourcing include improved performance (62 percent) and reduced errors (53 percent). Because only a fraction of business owners have accounting or financial experience, these functions are often among the first to be outsourced.
It makes sense that tasks that call for a great deal of skill and attention to detail may help organizations safeguard themselves against financial and legal risks while also coming up with inventive ways to boost their bottom line. I also like that you said that an outsourced accountant may assist your company with a variety of tasks, including bookkeeping, tax preparation, long-term financial predictions, setting up an online store, and much more. This is so smart considering how tax accounting services will help employees and managers focus on much more important work that needs more prioritizing. Thanks for sharing.