Accounting is the key process in an organization. Accounting is a financial process that helps the organization to track its finances. Information collected from the accounting service provider can be used by the management for making an important financial decision. Few companies have their own team to carry the accounting services, whereas other companies outsource accounting services for their business.
Through this blog, we will discuss the necessities of outsourcing accounting services and what benefits company can get after outsourcing its accounting services.
What is Outsourcing Accounting Services mean?
Before moving further, let’s understand what are the accounting services and types of accounting services which are performed by the company. Accounting is a process of analyzing, interpreting, recording financial information.
Through outsourcing accounting services, companies can focus more on its vision, increase it’s productivity, improving it’s quality of goods and services, while the third party deals with the task of accounting for the company.
What services are offered under the outsourcing of accounting services?
Accounting services which a company can outsource are to accounting service provider are as followings;
What are the Pros and Cons of outsourcing accounting services?
- Leads to Financial Savings
Outsourcing accounting services is always a cheaper option rather than hiring in- house employees to maintain the finance department of the company. Outsourcing will reduce the associated cost, such as sick days, retirement, vacations, Provident fund, etc. In addition to this, company gets the team of professionals to handle their account instead of a single in – house employee.
In every company, whether it’s small or big, a lot of activities are carried within the given time frame and with the same efficiency. By outsourcing company’s accounting activities, company can utilize a lot of time to focus on other main activities and complete within the appropriate time frame.
- Reduced Frauds
The in-house employee can commit any frauds in accounts that can be settled by any warning if got caught, whereas due to outsourcing, fraud in accounts can be easily caught. Also, the risk of committing fraud is very less as outsource company works under the responsibilities.
- More Experienced Guidance
Firms providing outsourced accounting services are specialized in the service they provide. They have experienced and more responsible staff to support as compare to in house staff. Such firms ensure the quality and expert services as they only hire highly skilled people.
- Increased Core Competency
After outsourcing the accounting services, company owners can actually work on running the business more efficiently. As they have lesser their burden of maintaining the accounts, as can focus on generating the sales of the company. It also increases the productivity and competency of the company in the market.
- Improved Cash Flow
Cash flow plays an important role in the running of the business. Improving the cash flow is one of the benefits company gets after outsourcing. Outsourcing of accounting services to professionals can help in better prediction of existing resources and make a pathway for the generation of revenue for business.
With all these pros let’s see what can be the cons of outsourcing accounting services;
- Hidden Costs
It’s always better to have a monthly discussion with the outsourced firm if not discussed properly, which can lead to extra costs. The firm can charge irrelevant price for their service. To avoid such a scenario, parties must have a periodic dialogue with each other.
- Less Control
By outsourcing the accounting services, anyhow, the business owner provides certain control of company’s functioning to the outsourced firm. Due to this, the business owner may not get the work done as he wants to.
- Security Risks
Accounting is one of the sensitive matters of any business. When any company outsources it’s financial details to third party, there can be chance that the information can be misused. The outsourced company has all the sensitive information related to the company’s assets, so it’s better to hire a reliable and well-known firm to outsource the accounting services.
- Limited Communication
As the outsourced form have its own office, there is always a limited communication between the parties. So the requirements and challenges are always communicated through distance only with limited communication.
Read our article:An overview – Outsourcing of Accounts Payable Services
Why should other countries outsource accounting services to India?
Accounting is one of the major services which India offers to the global business organization. There are many reasons behind this like India is the rapidly growing country and has the fastest growing economy in the world. India is the country that has all the required resources for outsourcing business right from qualified and experienced manpower to provide quality services.
Below mentioned are the few benefits that a business can get by outsourcing it’s accounting services to India, like;
- Language no more a barrier;
The reason which is the biggest barrier in the outsourcing industry is the language. While communicating with professional people tend to get the issue with the language. However, here in India, people in professional services tend to speak comprehended English, which is much better than the people of other countries.
- Favorable government’s policies;
Indian government always carries a friendly and favorable approach to the outsourcing industry. Government policies in this sector are beneficial for countries like the US, UK, Australia, etc.
- Significant Reduction in cost;
Through outsourcing CFO services to India, businesses save a huge amount as Indian services are quite cheaper. Companies don’t have to rent an infrastructure, and the saved money can be utilized in enchasing the company’s main business.
- Professional services and Timeliness;
Firms in India provide professional service and that too within the fixed time period. In India, many institutes offer professional accounting courses, helping in getting more people in accounting sectors. With this, they assure you to provide quality services. Also, Indian firms are very particular about providing the services within the timeline as framed by the clients.
- Increase in Productivity;
Maintaining the accounts of the company is one of the time taking processes, which, along with the time, requires a team of dedicated professionals. In other countries, pays are higher for such professional services as compare to India. However, not only the money which is issue but outsourcing can reduce the productivity of the staff as they have to maintain the accounts books. The time devoted to their regular work can decrease their work productivity. So, outsourcing of accounting services can provide staff the time to focus on their own work, which leads to an increase in productivity.
Indian firms provide service round the clock. So, companies outsourcing their work get availability at their own convenient working time. Firms work according to the client’s needs as they work under the fixed time frame and bound to complete the work in the set time period only.
- Advance accounting tools;
With the passage of time and advancement in technology, accounting firms have also scaled up their technology. Many of them are using updated accounting software to make it easy for their clients. With this, clients can also track their businesses’ nitty-gritty and current situations.
- Complete accounting services;
Indian firms provide a basket full of accounting services, which includes payroll, account reconciliation, accounts payable, balance sheet preparations, etc..
Accounting is the most sensitive part for any of the business, so should be handled with professional who can classify, analyze, and summarize data. Outsourcing the accounting service to professional firm provides time to the business owner to focus more upon their business. Along with this, India has become the hotspot for the companies in handling their accounts.
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