Should You Outsource Accounting Services?

There are numerous benefits of outsourcing some of the work that your business does. That’s less expensive and you have a bigger poll of employees to choose from. However, even the companies that regularly outsource some of their workload have a problem with doing so with their accounting.

That’s because accounting is such an important task a business needs to undertake and it can cause you both financial problems and the problems with the IRS and that’s not something any company wants. However, there’s a good case to be made for outsourcing.

Accounting resources

A lot of modern businesses are working abroad since the day they open their doors. That means that their teams need to be able to handle international accounting right away as well. This is easier to manage when you hire an accountant from the country you’re working with.

It’s also easier to find the accountant you need when you have a bigger poll of potential employees at your disposal and that’s what you have when you hire from abroad as well. Sometimes, a work of an accountant is about being highly specialized for a niche field and that’s where more potential employees comes in handy.

Freeing up time

The bulk of the accounting work is about payroll taxes. This is a simple part of the job and it can be done by a novice, but it’s tedious and it needs to be done every month. There are also a lot of documents to keep track of and archive.

All of this is important but it takes up time and doesn’t really help the business in any meaningful way. Outsourcing this work abroad frees up time for the upper management and your employees in general to do something more important.

Easier to expand or cut back

Businesses change in size. It’s usually your goal and intention for them to grow all the time, but sometimes they also need to downsize and you need to cut back on your plans. All of this is reflected in the company finances and thus its accounting and all of these changes affect the accountants.

It’s easier to make these changes when you’re outsourcing since you’ll have looser contracts with your accountants and since they don’t work in house and have other projects to turn to when your needs to scale down.

Management

There are downsides to outsourcing your accounting services as well. One of those is the amount of work you need to do in order to manage this work. Even though the main point of outsourcing is to let go of some of the responsibility you’ll still need to oversee and be in contact with your accountants abroad. This is especially true during tax season.

This is also the case for when your accountant is in your own country, but all the managerial work becomes more complicated with outsourcing. It also takes more time to get a nice flow of work going.

Spreading the workforce thin

Chances are you won’t be the only business that your accountant is working with since that’s how most freelancing and outsourcing works. This can be beneficial for you because it gives you more mobility with your work load, but it can also be a source of problems because your employees might be spread too thin.

After a while this can lead to mistakes and things getting missed. That’s a rather big problem when you’re working with taxes and finances in general since it can cause you to be late and pay unneeded fines and fees.

Company reputation

There’s also an issue of company reputation. At this point, outsourcing is rather common but it’s still not popular amongst the domestic workers. Without going into the pros and cons of using this tool it’s safe to say that a young and small company will have more of a problem explaining their action in regards to outsourcing.

This doesn’t mean you should avoid it just to avoid the reputation that might come up from it, since the decision is up to you, but you should be aware of the fact that one affects the other.

Conclusion

Outsourcing your accounting work is something that has its benefits but it’s still avoided by some business owners. That’s mostly because of the importance of the taxation tasks for a small company. At the same time, doing so may make your life easier because it will allow you to choose from a bigger poll of workers and you may also end up paying them less.

It will also free your time to focus on more important topics when it comes to running your company. It’s not an easy setup to create but once you do, you can leave the taxation work on autopilot.