One of the biggest benefits of outsourced accounting is that it can save businesses money. In fact, businesses can save 30-40% by using an outsourced accounting partner. How? In this article, we dive deeper into the ways outsourced accounting can save companies money.
- Prevent Missed Opportunity Costs
- Eliminate Risk and Internal Fraud
- Avoid Costly Fees
- Sidestep Costly Business Decisions
- Effectively Manage Payables & Receivables
- Take Advantage of New Opportunities With Smart Insights
- Pay for Services You Need
- Cost of In-House Accounting vs. Outsourced Accounting
Prevent Missed Opportunity Costs
Businesses often miss out on revenue-generating opportunities when their employees are too focused on tasks that are outside of their core competencies, especially accounting tasks. By bringing in an outsourced accounting firm to focus on the accounting, your teams can concentrate on what they do best. This can include things like:
- Engaging with new or existing clients
- Improving your products or services
- Creating new marketing strategies
Eliminate Risk and Internal Fraud
Businesses lose an average of 5% (about $164,000) of their annual revenue due to internal fraud. Why? Many businesses lack the internal talent or resources to properly implement internal controls and sound accounting processes.
With outsourced accounting, you can streamline your system of internal control over accounting and financial data, mitigating the risk of errors, omissions, or misstatements in financial statements. In turn, this reduces the threat of data security breaches and the misappropriation of assets. It also enhances the strength of accounting systems benefiting all stakeholders in a business.
Avoid Costly Fees
When businesses don’t have the accounting skills or manpower in-house to adequately manage their accounting systems, they frequently encounter fees, penalties, and bank charges as a result. An outsourced accounting partner can eliminate these charges by streamlining cash disbursement, for example, or finding new ways to pay bills online to avoid traditional processing fees and delays in cash flow. By creating accurate processes and systems, outsourced account firms can eliminate costly fees.
Sidestep Costly Business Decisions
In order to make smart business decisions, business leaders need a clear understanding of their current financial position. Without this clarity, leaders can make unprofitable decisions that can result in debt refinancing. Outsourced accounting firms help businesses have a clear understanding of the current financial position. This picture is painted with services like customized reports, accurate financial statements, and real-time access to software data. This enhanced financial visibility helps business leaders make smarter decisions that can save the company money, or even earn them new streams of revenue.
Effectively Manage Payables & Receivables
When businesses don’t effectively manage their payables and receivables, they can encounter costly interest charges and service fees. And they may lose valuable and cost-effective vendor relationships. An outsourced account firm can help businesses avoid cash flow issues and the need for additional financing by implementing secure and reliable accounting systems. Outsourced accounting firms can also make sure that customers are paying their bills on time, improving your cash flow.
Take Advantage of New Opportunities With Smart Insights
Outsourced accounting firms offer businesses a team of experts with a broad skill-set, a skill-set that many businesses could not afford otherwise. With the help of an outsourced accounting firm, businesses can leverage timely, accurate financial reports and projections to seize on opportunities to scale their business, secure financing, or buy new equipment. By delivering accurate financial reports, outsourced accounting firms help instill businesses with the confidence to make strategic asset allocation decisions.
Pay for Services You Need
Businesses may only need additional accounting support or expertise during certain times of the year or with short-term projects. Instead of hiring a full-time employee that you’d have to pay indefinitely, businesses can instead pay for additional accounting expertise when they need it if they hire an outsourced accounting firm. These firms help businesses save money by reducing their payroll and overhead expenses.
Cost of In-House Accounting vs. Outsourced Accounting
Many businesses struggle to justify the cost of outsourced accounting. If you are thinking of hiring an in-house accounting team (because you need a team, not one person, to effectively run your accounting), consider the associated costs:
- Salaries and Benefits
- Training Costs
- Recruitment Costs
- Fringe Benefits
- Company Resources
- Hiring and training
When you hire an outsourced accounting firm, you pay for the same services that an employee would deliver without having to pay all those other employee costs.
Whether you want to optimize your systems, reduce operating costs, or improve the accuracy and timeliness of financial reporting processes, an outsourced accounting firm can help. Outsourcing can also be the catalyst for growth and new levels of success. To learn more about Lavoie and the services offered, please contact us today. We are ready to tailor an engagement to meet your requirements.