Many companies want to benefit from a flexible organization to continuously improve the performance of their accounting processes. They, therefore, decide to outsource their accounting to an external service provider. In the service contract, information about the client company, such as its name, legal form, sector of activity and many others, must be mentioned. Although accounting outsourcing has many advantages, it also has some disadvantages. So, without further ado, let’s dive into this blog and learn some of the benefits of hiring an external accounting firm.
What is accounting outsourcing?
Accounting outsourcing is the transfer of accounting tasks to an external provider. The client can outsource all or part of its accounting. In return, the remote accounting company is obliged to respect the contract and to respond favourably to its client’s requirements. In the era of technological evolution, the democratization of the sector and the world of self-employment, it is possible to request the intervention of a service provider located abroad.
Why outsource your accounting?
There are many advantages that encourage company directors to opt for outsourcing their accounting: flexibility, reliability of accounting information, cost pressure, etc. It is an operation that has several major advantages. This is the case, for example, when the company does not have enough staff for the position of an in-house accountant or, due to a lack of financial resources, it does not have a sufficient budget to hire an accountant on a permanent basis. Deciding to delegate the accounting function to an external professional can reduce costs and save money.
The knowledge and skills of an accountant cannot be improvised. The related tasks such as taxation, law and accounting itself are delicate, and mistakes in these areas can be fatal to the business. Therefore, the use of an experienced professional in this field protects the company from these possible losses and is one of the solutions that can prevent the company from going bankrupt.
As the accounting of a company is subject to legal obligations, it is, therefore, imperative to respect the calendar of the various reporting obligations. If you forget or are late, a fairly substantial penalty may apply. Fortunately, this can be stipulated in the contract with a remote accounting expert, and no mistakes or delays are possible.
As with the outsourcing of various tasks, the outsourcing of accounting also allows the company and its employees to keep the focus on running the business or activities to promote it and to refocus on the core business.
What tasks can be entrusted to an external accountant?
The company director can entrust all or part of the accounting tasks to an external expert. Among the various accounting tasks, the service provider can offer the following services:
- Management of fixed assets
- Inventory work
- The lettering of accounts
- Tax management
- Preparation of the tax return and preparation of the annual accounts
It can also take care of accounting entry, which generally includes accounting for overheads, cash flow, purchases, sales, payroll and VAT declaration.
Despite the above-mentioned advantages, some companies are not yet ready to start outsourcing their accounting. The main reason for their hesitation is the cost of the accountant. The hourly rate is between 50 and 150 dollars, excluding tax, depending on the level of competence of the person involved. Apart from that, when accounting tasks are carried out externally, the business owner no longer has the possibility of monitoring his or her accounting in real-time. This can result in a feeling of loss of control.
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