Finance & Accounting Outsourcing is partnering with an external business process outsourcing provider who provides Finance & Accounting services that can otherwise be done inhouse.
Businesses looking to outsource Accounting functions can hire roles like Bookkeepers, Accounting Associates, Junior Certified Public Accountants, Senior Certified Public Accountants, Controllers, Payroll Specialists, Debt Collections and Billing Specialists, Loan Processors, and more.
The global market for Finance and Accounting Outsourcing estimated at US$43.1 Billion in the year 2022, is projected to reach a revised size of US$53.4 Billion by 2026, growing at a CAGR of 5.9% over the analysis period. Multi-Process F&A BPO, one of the segments analyzed in the report, is projected to grow at a 6.8% CAGR to reach US$19.3 Billion by the end of the analysis period.
37% of small businesses outsource their Accounting function. Accounting requires a specific skill set which makes accounting related tasks the top outsourced function, next to IT tasks.
Accounting is highly transactional and technical which is why it is one of the most outsourced functions. If you are planning on outsourcing Accounting services, here are advantages of Accounting Outsourcing.
Accounting Outsourcing: Should I outsource Accounting?
Focus
For businesses under a different industry other than accounting, the accounting function is not the core focus but still is equally important for the business to continue operations.
Accounting takes a lot of time and effort. Tasks associated in Accounting are large in volume, highly transactional and repetitive.
As a result, for businesses, it is difficult to focus on highly important aspects of the business.
Outsourced finance and accounting teams provide remote day-to-day accounting support as effectively as in-house accounting departments.
Businesses can focus on the core processes since they can delegate Accounting functions to their outsourced accounting team.
General accounting functions that can be outsourced are managing all accounting transactions, operations and financial activities.
Businesses can also delegate accounts receivable and accounts payable management, data entry services such as efficient recording of financial transactions, payroll management, Accounts Payable (A/P) Data Entry, invoice and billing management, processing of incoming payments along with the issuing of necessary paperwork, payment posting, and managing and reconciling balance sheets and financial statements, invoice and billing management, payment posting and records monitoring, analysis, reconciliation and preparation of budget reports and forecasts, and the computation of taxes and preparation of tax returns.
On-time Support
Generating an accurate financial report, depending on current operating workflow, means a time-consuming process.
Accounts payable, for example, has a definite timeline for payment or clearing. By definition, Accounts Payable is the finance and accounting term defining goods or services a company owes to suppliers or service providers which are purchased via credit. There must be proper accounting and management to avoid corresponding penalties if the business does not meet the deadline stated.
On the other hand, for Accounts Receivable, necessary follow ups on Accounts Receivable payment collections via inbound calling is also needed to make sure payments owed to the business are secured.
Outsourced Accountants can do follow-up calls & required action, timely & correct payment posting, and reports.
Outsourced Accounting teams manage all accounting transactions and operations and financial activities, prepare budget forecasts and publish financial statements, handle monthly, quarterly and annual closings on time. Accounting Associates ensure completion of Service and Compliance Tasks such as Accounts Payable Invoice and Accounts Receivable Billings, Bank Reconciliations, monthly and annual GET filing, payroll tax filing, weekly payroll and cash forecast and more.
With Accounting Outsourcing, you already have a delegated team to provide accurate and on-time support of accurate quantitative information on the financial position, liquidity, and cash flows of the business.
Technical Expertise
Accounting Outsourcing lets you work with talents that have the right technical expertise.
Outsourced Accountants are equally well-versed as inhouse Accountants in accounting principles.
They are able to work comfortably with numbers, can adapt to a fast-paced work environment, have excellent accuracy, attention to detail, planning and organizational and communication skills.
Accuracy and attention to detail are important when generating reports, processing invoices, maintaining accounting records, auditing financial documents and procedures, reconciling bank statements, and calculating tax payments and returns.
Outsourced accountants can collate, identify invoice eligible for payment, categorize invoice for you for proper records keeping for documentation and audit purposes, conduct efficient billing collections, track payments, call customers on payments on Accounts Receivable payment collections, make the necessary follow ups on Accounts Receivable payments, conduct claim audits and more.
Connext Accounting Outsourcing teams provide the expertise and experience level to complete Accounting tasks and to play a large part in the expansion and improvement of your business.
Reduced Cost
Costs can be reduced when outsourcing Accounting.
Based on the experience level of the employee, Accounting Outsourcing can lead to 60% lower overhead as well as decreased costs. Depending on the external outsourcing provider, this rate includes the employee salary, benefits, recruiting, insurance, office space, co-management support, employee engagement, and more.
Technology
Accounting involves the use of technology especially when accessing financial information and generating accurate reports.
The 2018 IFAC Global SMP Survey found that accountants working in small- and medium-sized practices (SMPs) are embracing technology to better serve clients and attract and retain top talent.
For accountants and accounting techs, generating financial reports requires a large amount of work and reports generated. Cloud-based Accounting is a growing preference for companies. Cloud-based software makes it possible for companies to access, store and save data virtually and remotely.
Outsourcing Accounting provides access to cloud-based software. Sample software that are commonly used in the Accounting industry which outsourced accountants are knowledgeable in are:
• Intuit QuickBooks Online
• Oracle Netsuite
• Freshbooks
• Zoho Books
• GoDaddy
• Wave Financial
• Sage Business Cloud Accounting
• Xero
Compliance
Offshore Accounting providers can ensure that businesses comply with standard operating controls, financial policies and regulations. Compliance covers implementing and reinforcing financial data confidentiality, conducting database backups when necessary and ensuring timely bank and tax payments.
Connext is a business process outsourcing provider that provides the hiring, training and management required to provide quality accounting and financial services while you save both time and money.
Conclusion
The Accounting function is a highly transactional and repetitive process that takes up a lot of time and effort. Outsourcing Accounting can help your business when done right.
Accounting Outsourcing provides accurate and on-time service delivery, technical expertise, reduced cost, access to technology, and compliance.
- Businesses can focus on the core business and business specific processes. Businesses can outsource Bookkeepers, Accounting Associates, Junior Certified Public Accountants, Senior Certified Public Accountants, Controllers, Payroll Specialists, Debt Collections and Billing Specialists and more.
- Accounting Outsourcing lets you work with talents that have the right technical expertise.
- With Accounting Outsourcing, you already have a delegated team to provide accurate and on-time support of accurate quantitative information on the financial position, liquidity, and cash flows of the business.
- Based on the experience level of the employee, Accounting Outsourcing can lead to 60% lower overhead as well as decreased costs.
- Offshore Accounting providers can ensure processes fully compliant to Accounting standards.
References:
“Global Finance and Accounting Outsourcing Industry”. Reportlinker. https://www.reportlinker.com/p05817904/Global-Finance-And-Accounting-Outsourcing-Industry.html. Accessed September 17, 2022.
Riley Panko. “Small Business Outsourcing Statistics in 2019”. Clutch. June 19, 2019. Business Services, Clutch Report. https://clutch.co/bpo/virtual-assistants/resources/small-business-outsourcing-statistics. Accessed September 17, 2022.
“New Global SMP Survey Reveals Keys to Growth for Small Accounting Firms”, Oct 23, 2018 | Surveys & Reports. https://www.ifac.org/knowledge-gateway/contributing-global-economy/publications/new-global-smp-survey-reveals-keys-growth-small-accounting-firms. Accessed September 17, 2022.
Business News Daily. https://www.businessnewsdaily.com/7543-best-accounting-software.html. Accessed 13 September 2022.
