Financial management is one of the major challenges for any business. But for small businesses and startups, it’s even more challenging, as they usually lack significant funds at their disposal. In such cases, having an in-house team could add a significant financial burden on small businesses.
To eliminate this burden, small businesses often opt for outsourcing accounting services. As per reports, about 37% of small businesses outsource accounting, making it one of the most outsourced services in the business world.
If you’re running a startup or a small business, outsourcing accounting services is one of the best decisions for your company. It helps you leverage the expertise of professionals around the world while keeping your business expenses significantly lower. Moreover, outsourcing accountants offers many more benefits.
In this article, we are going to explore why small businesses should opt for outsourced accounting services and how to find an outsourced company that aids in financial management. So without any delay, let’s get started.
Benefits of Choosing Outsourced Accounting Services
Outsourcing accounting services has turned out to be an advantageous option for small businesses and startups, thanks to its cost-effectiveness and flexibility. Let’s delve into some of the notable benefits that encourage small businesses to opt for outsourcing services for their accounting needs.
Affordable finance management
Accounting is such a critical business operation that businesses usually prefer hiring in-house accountants. But for small businesses, onboarding accounting professionals could be expensive. It not only involves salaries but also employee benefits and overhead in-office expenses like hardware purchases, software subscriptions, electricity bills, and more.
For a small business or startup that’s just taking its initial steps in the market, these costs are a significant expense. Outsourcing accounting services can save businesses from these expenses. Companies only pay for what they need. Since no regular salaries or operational costs are involved, small businesses can channel this money to grow their business.
More focus on core business activities
For small businesses, time is the most crucial asset, especially for startups that need more focus during their initial stages. If you’re a small business owner, doing your accounting operations can take away a significant amount of time, which you could invest in building your business.
Outsourcing accounting services can handle time-consuming tasks such as payroll, monthly reconciliations, accounts receivable, and more. Since experts take care of your accounting operations, you can focus on other crucial business tasks, such as devising strategies and building products.
Access to global expertise
Thanks to increasing globalisation due to widespread use of the internet and digital platforms, accessing the global talent pool has become easier. Now you don’t need to be limited to your local professionals. You can easily hire overseas accounting firms and leverage international talent to manage your finances.
Usually, the overseas accounting firms provide various communication channels that help streamline the collaboration. With their advanced cloud-based software, accessing your financial data becomes much easier. They offer frequent reports which keep you informed about your outsourced services.
More scalability and flexibility
Outsourced financial services are more scalable and flexible than hiring in-house accountants. When you outsource accounting services, you don’t need to look after continuous salaries during downturns. But if you hire an in-house employee, you have to provide them with monthly salaries and other benefits even during the quieter periods.
With outsourced accounting firms, you can easily upscale or downscale the services as your business requires, since most companies offer flexible plans. This takes away a great financial burden from your head, offering flexibility in making efficient accounting budget decisions.
Enhanced compliance with regulations
Navigating the complexities of tax regulations and compliance can be overwhelming for small businesses. The regulations change frequently, and one has to stay updated to make the right financial actions to ward off any potential penalties. Staying up-to-date with these changing rules isn’t efficient for small businesses.
Therefore, by opting for accounting outsourcing service providers, you can delegate these tasks to professionals who are experts in your local regulations, helping your small business be compliant with government rules and saving potential penalties.
Improved financial planning
Professional accounting firms that offer outsourcing services don’t just manage simple payroll operations or provide accounts payable services. They often bring their expertise to the table and provide strategic financial advice, helping small businesses with budgeting, forecasting, and long-term financial planning. Such a level of support is crucial for small businesses’ sustainable financial health.
How To Choose An Accountant For My Business
Finding an outsourced accounting partner is similar to choosing a partner for your business. The right professional can streamline your business’s financial operations. Therefore, finding the right expert requires careful consideration. Here are some factors you should consider while choosing an accountant for your small business.
Evaluate Your Business Needs
The foremost step in choosing an outsourced accountant is determining your business needs. Different outsourcing accounting firms offer different services. Therefore, it’s crucial to identify the services that your particular business requires. Properly evaluating your current financial processes will help you identify your unique business needs and opt for the right professional to fulfil them.
Accreditations and certifications
Accreditations and certificates are another crucial factor you should consider while hiring an offshore accountant. Prioritise companies that are accredited by reputable organisations ACCA (Association of Chartered Certified Accountants) and ICAEW (Institute of Chartered Accountants in England and Wales). These accreditations and certificates showcase that the provider has met excellence and professionalism standards.
Industry knowledge and expertise
Relevant industry experience can be an added benefit for your small business. When an outsourced accounting partner is familiar with your industry vertical, they will have all the knowledge about industry best practices, specific regulations, and compliance requirements. So, look for professionals who have experience working with businesses similar to yours and have a proven track record of delivering quality services.
Customised solution
As each business is different, they have unique accounting requirements. Your ideal outsourced accounting partner should be able to meet these requirements with customised solutions. Bespoke services will not only help you tackle the unique challenges our small business faces, but they will also save significant costs on additional services that come with your selected pricing package.
Pricing and cost structure
Transparent pricing and flexible cost structures are key to the successful outsourcing of accounting services. Make sure the partner you choose is willing to work within your budget. Choose a partner who offers flexible pricing models like hourly rates or fixed pricing. Moreover, they should also be transparent about the additional costs and fees to help you stay informed about any potential expenses.
Technology systems and software
Technology systems and software are a crucial part of accounting services nowadays. There are many software programs that make accounting processes faster and more accurate, streamlining business tasks. Ask your outsourcing partner about their tech stack. Make sure they are offering their services using an advanced tech stack, offering you the benefits of technology in managing your business finances.
Communication and reporting
Clear communication and reporting are key to successful collaboration. Before you choose your accountant, ask them about their communication methods. Usually, accounting firms use emails, voice calls, or third-party messaging tools. You should also ask about their reporting style—what type of report they provide, how often they do it, and in what format? These are some crucial questions you should learn about.
Choose Stellarwiz as Your Finance Partner
If you’re looking for a finance partner that enhances your accounting operations and simplifies finance management for your small business. Stellarwiz is here for your help. We’ve been a leading accounting firm, delivering exceptional services to our global clients.
With a team of skilled professionals, a disposal of tonnes of advanced software, years of expertise working with multiple business vertices, and flexible pricing plans, we are a strategic partner every small business and startup needs to grow their business.
Don’t just trust our words. Evaluate our work by taking a one-on-one consultation call. Contact us today to discuss your business requirements with us. We will deliver a personalised solution that aligns with your unique needs and amplifies your finance management.
