As anyone in the business world will agree, 2020 has been a year unlike any other. Not only has the COVID-19 pandemic swept across the world, but other events like hurricanes, wildfires and record heatwaves have taken hold in specific areas. These situations have not made it easy for business owners to forecast their upcoming cash flow, stay on top of accounts receivables or create projections for 2021.
Fortunately, while entrepreneurs have had to focus on more important responsibilities, they’ve been able to outsource their accounting services. These outsourcing firms can serve as a business’ accounting department without the stress of hiring accountants, training them and giving them office space.
If you’re on the fence about outsourcing, it’s possible that you may have an antiquated view of the industry. To get up to speed on the outsourced accounting services available in 2020, check out the following essentials.
Track, Improve Cash Flow
An outsourced accounting team can provide timely advice to your organization to solve cash flow problems and avoid any future issues. They can identify areas that are damaging your income, and they’ll also suggest strategic plans for your business growth that will keep money coming in.
The outsourced team can even issue a precise and thorough cash flow analysis and oversight of your business. This analysis will help you and your investors review the financial health of your business. Your outsourced accounting firm can draw up cash flow projections for the next year, next quarter and even the next week. This will help you see what changes need to be made and when. Use the projections to foresee slow periods and plan in advance what you can do about them.
Outsourcing accounting services can save your valuable time and resources so you can explore new partnerships, improve client relationships and expand your business. Outsourcing allows you to address growing financial needs with the guidance of financial experts. It provides you access to the best software and technology to make your accounting functions more efficient and reliable. In addition, your outsourced firm can adopt robotic process automation (RPA) to bring further efficiency to the process.
You can also consider outsourcing accounts payable services to ensure that all of your invoices are paid on time and accurately, and that you’re always generating a strong cash flow into your company.
By outsourcing, you can save on paying employees’ salaries and benefits, as well as the cost of hiring and training employees. You can also eliminate expenses related to hardware, software and office supplies while still keeping up with technological advances and software upgrades you need to ensure that everything is operating smoothly.
When you outsource, you’ll get access to expert accountants, finance professionals and bookkeepers at a much lower cost. You can also save on infrastructure fees, employment taxes and other overhead costs since experts will be employed by your outsourcing firm and not directly by your company.
A specialized accounting outsourcing company can help you ensure compliance with changing financial and tax regulations when it comes to city, state and federal laws. It can help you avoid tax penalties and maximize tax benefits by complying with present federal, state and local laws. Thus, you’ll always be on top of the new tax or accounting requirements and potential changes on the horizon.
In addition, when new compliance regulations come down, the outsourced companies will be on top of them from the strategic point of view so you don’t have to worry about whether you’re operating within the guidelines.
Outsourcing accounting services can free up your valuable time for managing and growing your business. As the outsourced company handles your accounting functions, you can stay focused on value-added, revenue-generating tasks, such as building business strategies, making financial projections, bringing in new customers and new product development.
How to Outsource Accounting Services
You can outsource to a company that’s the right fit for your business’ accounting needs by ensuring that you check the credentials of the outsourced team to ensure that they’re licensed and certified, and have handled accounting for similar businesses in the past. In addition, confirm that you’ll have a fixed point of contact for all your needs, and that you’ll be able to access your records whenever you’d like.
You should also confirm that your data and information will be secure. Accounting information is extremely private and sensitive, so you must ensure that the outsourcing company has a strong cybersecurity component and sends encrypted emails.
Check references of the outsourced company ask for testimonials and read reviews online. You’ll also want to ensure that the price is competitive, so get several quotes before you commit.
Once you perform all of your due diligence, you should be in a perfect position to outsource your accounting and start dedicating more of your time to scaling your company.
About the Author:
Hemant Grover is a senior manager with Escalon Services, where he specializes in accounting, record-to-report, order-to-cash, procure-to-pay, and process mapping, as well as other essential business functions.