The accounting function is very important for any business as it shows the true and fair picture of the position of the company at any point in time. This picture helps the company to set realistic financial goals and targets, ensuring there is no strain on the resources.
However, there is always a strain on the resources of small businesses and so they avoid hiring the services of a professional accountant, assuming that they can take care of the finances all by themselves. Since they spend too much of their time in product/ service development, they hardly have any time left on hand to take care of their accounting function. Thus, outsourcing the accounting function is the best option at the hands of small businesses.
Outsourcing is a boon to small business owners who are struggling to keep their finances updated. Outsourcing service providers not only manage accounts and records but also provide financial reports and cash flow analysis that help small businesses generate finance from the right source at the right price.
Outsourcing accounting service helps the small businesses in several ways, as below
Accounting functions within a company are always expensive as it involves a lot of things, including the salary and benefits for accounting staff, separate floor space, cost of accounting software, purchasing furniture and equipment, etc.
The outsourcing cost when compared to this is always lower for small businesses. The outsourced accounting firms provide a package deal to their clients who can choose to add or delete any service which may or may not suit their business needs at a cost most favorable to suit their budget.
2.Pool of talented experts
Outsourcing provides small businesses with access to a team of professional experts who totally focus on accounting and business finances. They are always updated with the latest changes in accounting and the use of the latest accounting tools. The expert accountants always add more value to the business accounts than a single in-staff accountant. Thus, proving very beneficial for small businesses.
3.Latest accounting tools and techniques
Having an in-house accounting department requires companies to invest in a fully operational accounting system. These accounting systems are not only expensive to license and use, but also need to be updated periodically at a cost. On installing the accounting system, proper training also needs to be provided to the in-house staff so that they can use all the functions of the accounting system for the company’s advantage.
A small business cannot afford to lock its scarce financial resources into an accounting system which they may not use to its full potential.
Outsourced accounting firms make use of advanced and latest accounting software, tools and techniques like QuickBooks, Xero and other cloud-based accounting systems. This assures the small businesses that their accounts are being handled professionally and they can also look into their accounts and records anytime and anywhere.
Outsourcing accounting services gives the small businesses better control over their accounts as they can direct the outsourced firm about how they need their accounts to be handled. The outsourcing firm will ensure that they do accounting just as per the client’s needs. If the businesses need to change or add on any new service as their business grows, they can always talk to their outsourcing partner, who would willingly do it either freely or at a nominal cost.
Such control over accounts boosts the confidence of small businesses and they can perform better in their core function by not having to worry about their accounts and finances.
5.Compliance of statutory obligations
Another feature of outsourced accounting firms is that they take care of all the tax, legal and other statutory compliances of their clients. Small businesses that take advantage of this service do not have to worry about due dates and non-compliance of statutory obligations, which may lead to heavy fines and penalties.
The outsourced accounting firms take care of all the statutory obligations, including filing of income tax, GST returns, ESIC and PF related matters. They also update their clients regularly with any important changes in laws and regulations so that the clients can make timely decisions. They also track any benefits, deductions and input tax credits available to their clients, which a small business would miss out on if they handle their accounts on their own.
6.Enhance growth potential
The outsourced accounts service providers handle the day-to-day business transactions and update business records timely. This leaves a lot of time for small businesses to focus on their long- term goals and business objectives. The outsourced service providers provide periodic reports, prepare financial statements, and provide valuable advice to small businesses.
As the outsourcing firm is closely related to the accounts of small businesses, they notice the pain points and the strengths of their clients. They also provide regular business analysis, which helps small businesses to steer clear of any roadblocks and speed up their growth.
Are you looking out for an outsourcing partner?
Diligen is one of India’s best financial service providers who have proved very beneficial to small businesses who have partnered with them. Diligen provides a wide range of accounting and bookkeeping services, taxation services, VCFO services and much more, which are very helpful to small businesses and start-ups. These services are cost-effective and highly customizable.
The team of experts and professionals in Diligen always put their clients’ needs first. They provide 24×7 assistance by treating the client’s business as their own. The accountability and data security provided by Diligen is one of the best in the industry. Small business owners can put their trust in Diligen to receive the best outsourcing services.