First, what is outsourcing? The truth is that this concept is not new. Since always companies have turned to other companies for certain Bookkeeping services, what happens is that the new business management models favour the hiring of external companies that provide services that were previously made directly by salaried personnel. On the other hand, new companies are created under a more modern model or with a size that also tends to outsource.
Some time ago, companies were created under a classic model where they all had specific departments for each task. Administration, sales, production, distribution, etc. Today most companies are SMEs and there is no such a defined organisation, everyone does everything because, in most cases the size of the company does not allow this specialisation. Here at Nudge Accounting we have a specialised ready to assist you with anything related to bookkeeping and professional accountancy.
What does this new model offer with respect to the old one? The first, logically, flexibility, the fact that certain services are outsourced means that the company can adapt to changes more quickly. It is possible to work in a faster and more effective way, thanks to the internet, it is now possible to outsource many different management and bookkeeping procedures.
Another aspect is the economic, the costs for the company are reduced by eliminating labour costs and replacing them with payment for services rendered. Also, keep in mind that if the service is not good or we understand that it is expensive, we can look for another better or cheaper provider.
The third point is the organisational one. With this system, a company does not have to be too large to be able to offer a wide range of products or services. If your company wants to enter the internet market through an electronic store, you can outsource the design and maintenance of the virtual store you will not need a computer specialist to do that.
In any case, outsourcing requires constant control of the contracted services by the company. The fact that all the departments of the company are not under the same roof forces us to a greater effort. In addition, it must be borne in mind that these external contracts may be representing or acting on behalf of the company with what, in most cases a low quality of service will be seen by the customer as a defect of ours not of the subcontractor.
Outsourcing must be seen as an opportunity both for the company that hires the service and, logically, for the one that provides it. The contractor will benefit from the fact that he will be able to maximize his productivity by “letting go of ballast” in terms of dispensing with internal departments or services that can be burdensome for the organization without having to resent it. On the contrary, companies that provide these external services can search, create or increase the market.
But why outsourcing bookkeeping services?
One of the most desired services by companies of all types and sizes, due to the advantages it presents, is accounting outsourcing; that has been opening a broad market of clients for accounting studies and that allows to meet their growth expectations. But how does it work and what is it?
How it works and what is outsourcing in accounting
It consists of companies hiring qualified third parties, to carry and manage their accounting in an efficient, timely and confidential manner.
The outsourcing or outsourcing service includes all the activities of the accounting management, such as the issuance and administration of the accounting books required by law, the preparation of bank vouchers and reconciliations, the analysis of accounts and the generation of financial statements.
The amount of services offered by an outsourcing firm in accounting can be extensive, since they can also include tasks such as financial advice, the preparation of inventories and cash transactions, the settlement of tax charges and design of tax plans, the management of Payroll, etc. That is, any service that is related to accounting.
On the other hand, the size of the service portfolios of these businesses depends on their size and degree of specialisation in accounting science and related disciplines, giving the opportunity to contract what is specifically required. For example, there are cases where companies only need to liquidate the tax burden and present the respective declarations; and others where it is requested that they administer the entire accounting process and generate the respective reports and financial statements. Outsourcing firms always have a solution tailored to the specific needs of each client.
To legalise the provision of the service, the client and the outsourcing company sign a service contract, which contains several annexes and clauses that accurately describe the object, scope, responsibilities and obligations of the agreement; It also includes a confidentiality agreement in which the accounting firm or accountant undertakes to keep absolute reserve on the financial and economic information that will be handled.
Benefits of Accounting Outsourcing
Accounting outsourcing represents several advantages for companies that choose to hire it. Among the most outstanding are:
- Possibility of concentrating the efforts in the own activity of the organisation.
- Reduction of operating costs in infrastructure and salaries that implies having an accounting department within the company.
- Access to a team of accountants, tributaries and other expert professionals, who guarantee punctuality and quality of work at all times.
- Minimisation of tax risks and contingencies, since accounting outsourcing operates based on intelligently designed tax planning.
- Accurate and timely bookkeeping, financial and management information, ideal for making decisions.
In general terms, these advantages translate into greater competitiveness and efficiency in compliance with accounting and tax obligations that companies have.
Why is this trend prevailing among companies?
In addition to the advantages it represents, there are factors that influence the massification of accounting outsourcing:
- The increasing complexity of tax systems. It obliges taxpayers to seek specialized advice at certain times of the year.
- The development of the cloud and accounting systems. This type of programs that operate online allows the accountants to manage, at the same time and efficiently, the accounting of multiple clients. But the most important thing is that they offer the possibility of registering bookkeeping operations in real time and without the need for the professional to move to the company’s facilities, reducing work times and optimising labour mobility.
- The competitiveness of the market. It is opting for the outsourcing of accounting and other tasks for which there are specialists at lower cost, such as file management and collections.
When hiring it is important that you look for a qualified accountant or a study with a good reputation and ideally use a good accounting software as a support tool. You can contact Nudge Accounting and enjoy the services of a top team of professionals.