If you’re a small to mid-size business owner or manager, you may find yourself struggling with the complexities of accounting and tax compliance while trying to focus on core business functions. In such situations, it’s beneficial to outsource your accounting and tax department. Here are five reasons to outsource your business accounting and tax needs.
Outsourcing your accounting and tax department significantly reduces overhead costs associated with hiring an in-house accountant. These overhead costs include wages, benefits, and accounting software. Additionally, small to midsize businesses that hire a full-time in-house accountant could also incur a lost productivity cost. The hourly rate associated with the time needed to complete tasks may outweigh the business’s needs. It’s rare for a business to achieve the optimal level of capacity to justify a full-time employee. Outsourced firms typically offer flexible pricing models that accommodate your specific needs. This means you’ll only pay for services you require without the cost of in-house staff. Until your business reaches a certain level of production and size, you’re unlikely to need a full-time professional for 40 hours a week.
More Efficient Use of Staff’s Time
As a business owner or manager, you are consistently seeking ways to grow and improve service delivery. Hiring an in-house accountant not only incurs overhead costs but also creates another employee or department that you need to micro-manage. Moreover, if you’re a one-person operation, back-end operations like accounting and tax compliance can significantly distract you from your day-to-day tasks. By outsourcing these functions, you can refocus on strategic decision-making and enhancing other core business functions.
Employee turnover can pose a significant challenge for businesses, especially in the accounting and finance domain. Recruiting, training, and retaining skilled accounting professionals require substantial resources and time. Outsourcing alleviates this burden, as the responsibility of hiring and maintaining a skilled accounting team rests with the outsourcing partner. This ensures continuity and stability in your financial operations, even if there are changes within the outsourced team.
On-demand Access to Talent
With an outsourced accounting department, you’ll have on-demand access to a team of experienced professionals ready to support or deliver services. If you hire an in-house employee, you run the risk of not receiving the necessary support in the case of sick days or even vacation days. In the case of an outsourced firm, if your account representative is unavailable, you’ll often have a staff member step in to provide support. If your business requires constant support, outsourcing your accounting function might be the ideal solution.
Skin in the Game
When you outsource your accounting and tax department, the outsourcing partner becomes a stakeholder in your financial success. While both employees and outsourced firms are motivated to work hard, their “skin in the game” differs immensely. An outsourced firm’s reputation and success are linked to the quality of services they provide to your business. This alignment of interests ensures that the outsourcing firm is motivated to deliver top-notch accounting solutions, maximizing your financial efficiency and compliance.
In conclusion, outsourcing your accounting and tax department offers a multitude of advantages that can lead to enhanced financial stability and improved business performance. From cost savings and increased efficiency to continuous access to experienced professionals, the benefits are evident. Leverage the power of outsourcing and let it propel your business toward greater success.