Issues in Outsourced Accounting and Bookkeeping
There’s no doubt in the fact that small and medium businesses are able to manage accounting and bookkeeping rather easily when compared to other organizations. However, there are more errors in accounting as well, such as transaction categorization, improper books, etc.
The reason behind these minor mistakes is insignificant processes. As a business owner, you can’t always keep track of books or stay updated with upcoming accounting norms and rules. As a result, the financial health of your business gets hampered.
If you continue making mistakes, then your financial health deteriorates – it starts impacting your business, revenue, and employees. So, stop before it’s too late. Check some common errors of accounting and bookkeeping.
1. Inability to Scale
As a small or medium business, the topmost reason to hire an accounting and bookkeeping service provider is the inability o scale. When you have an in-house accounting team, then this professional is wearing a dozen hats. This professional may not have the experience to manage the load, which may lead to issues as your business grows. But, you may not want to add to the team due to money and other constraints.
As a result, you have just one person or maybe two to look after the complex accounting of the entire business. This inability to scale ultimately starts impacting your accounting processes and employees handling these tasks. They are exhausted, overburdened, and over-pressured.
Outsourcing accounting and bookkeeping can easily fix the issue.
Hiring an entire team of accountants and bookkeepers in-house is a costly affair. In fact, hiring just one of each is also expensive. You need to do the following for these employees:
Every year, you even need to give some type of hike or appraisal to these employees. You also need to regularly reward them, retain them, and make efforts to keep employees happy. All these things cost money.
Outsource accounting and bookkeeping to save on this front. Hand over the management to the accounting and bookkeeping outsourcing company in India and enjoy accurate and reliable services.
3. Low Quality
Another major bottleneck of in-house accounting and bookkeeping is quality. Even when you spend a huge amount of money on the employee, you may not get the quality. This is because, as a small business, it may not always be possible to hire someone with 5-10 years of experience. These professionals require a lot from a job role.
Further, as you have a limited number of people in this department, your employees can be easily overburdened by too many responsibilities. This can eventually reduce the quality of the work being delivered. With a disturbed or tired mind, mistakes are bound to happen.
4. Bookkeeping Inefficiency
When you need accurate bookkeeping and accounting, it is imperative to record every single transaction of the business. From the smallest to the largest transaction, everything should be in your books.
Further, regardless of the size of your organization, this is a difficult task. If you miss, you miss maintaining the financial health of the business.
Other than this, you need to categorize liabilities and assets for your accounts and books. To create an accurate and efficient system, you need a strong structure. With a few employees in your accounting and bookkeeping department, that is not really possible.
5. Poor Communication Flow
Is your bookkeeper aware of the financial health of the business?
Do they track every transaction?
Is the accountant aware of the books and accounts?
You need to proper communication flow for books, transactions, and accounts. One small mistake can lead to a series of other mistakes, which means too much re-work and extra tasks at the end of the month.
Outsourcing accounting and bookkeeping can help you mitigate communication flow issues.
Benefits of Outsource Accounting and Bookkeeping
Outsource accounting and bookkeeping to receive a range of benefits. As a small business, if you are facing even one or two of the above issues, then you need to outsource accounting and bookkeeping.
If you are still trying to figure out why then read these reasons why:
Accounting and bookkeeping service providers are cost-effective than your in-house team.
For an in-house team, you need to:
- Manage payroll
- Provide health insurance
- Offer retirement benefits
- Provide vacation and other holidays
- Bear the cost of training
- Bear the cost of retaining the employee
Even with all these things, there’s always a risk of the employee leaving, which will lead to hiring costs.
When you are outsourcing bookkeeping and accounting, you are able to get rid of these financial expenses. Just pay for the services acquired.
2. Proactive Processes
As the owner of the business, you need to look after the business, its growth, and successes. With a robust accounting and bookkeeping service provider, you can stay proactive. This team can always help you stay on top of your expenditures and finances. Before making any financial decision, you can consult with experts on updated data to make better decisions.
This team will analyze your finances and give you a red flag for expenditures if you are going overboard.
3. Expert Advice
One of the benefits of outsourcing accounting and bookkeeping is the ability to receive expert advice. In-house, you may not be able to hire an employee who specializes in the field. But, with outsource accounting and bookkeeping, you have access to qualified and expert professionals. These professionals would give you objective and unbiased advice and various crucial matters.
Compliance issues are common when you are handling accounting and bookkeeping on your own. Your team might not have the time or experience to always stay updated and understand the new rules and norms.
However, accounting and bookkeeping service providers have provisions to always keep updated with new regulations and their implementation. This gives you an edge in compliance.
5. Reduced Chances of Fraud
When you have one or two employees looking after your accounting and bookkeeping, the chances of fraud are more. This person has the entire control over your books. Therefore, they also have the power to manipulate your books or data. It may take you multiple months or even years to detect this fraud.
With accounting and bookkeeping service providers, the chances are reduced. There’s an entire team looking after your accounting and bookkeeping. The risk is mitigated with so many eyes and views.
6. Better Productivity
With the accounting and bookkeeping service provider by your side, you can improve productivity. From on-time reports to real-time analytics, there’s so much more to accounting and bookkeeping. Your bookkeeping improves, decision making enhances, and suspicious activities reduce. All this leads to better productivity.
How To Improve Business Efficiency with Outsource Accounting and Bookkeeping?
Since you are looking for a method to improve your financial efficiency, then find an accounting and bookkeeping service provider. This will give you access to the latest tech, expert professionals, and accuracy. Let’s see how:
1. Real-Time Execution
With an accounting and bookkeeping service provider, you get a lot of things in real-time. For instance, reports, analytics, data, etc. These real-time details help you understand your business and financial health better, which leads to growth.
With outsource accounting and bookkeeping, you get accuracy. There are experts working on your accounts, and they know things and rules that you may not know. This improves accuracy.
Outsourcing accounting and bookkeeping are flexible. You can manage your package and control your services. It is possible to reach out to the provider to resolve your queries and receive information anytime you like.
The Best Accounting and Bookkeeping Service Provider
Paysqaure is the best accounting and bookkeeping, service provider. From all your bookkeeping needs to the preparation of detailed reports, you get everything with Paysquare. Contact us to receive support on bank reconciliations, vendor management, financial consolidations, etc.
Paysquare has years of experience in serving clients. We have a team of experts, which empowers our clients to accurately execute every accounting and bookkeeping function.