Why do businesses resort to outsourcing accounting functions?
Most businesses resort to outsourcing CPA functions of in-house accounting services for the following reasons:
- Top employee resigns and key accounting jobs are neglected.
- Outsourcing CPA functions lessens, if not removes, recruitment and training costs
- Employee commits a serious offense against company rules and regulations like fraudulence, dishonesty or fund embezzlement, which culminates to his/her termination
- To increase transaction volumes that staff are unable to accomplish on time
- Acknowledgment that outsourcing CPAs can bring favorable results such as speed up management of payables as well as the collection of receivables, and upgrade the level of vendor financing among others
- Immediate need for administrative or fiscal management of business processes [such as] assist projects, provisions for maternity leave, coverage for military service and illnesses, business reorganization or relocation prospects
If there is already an in-house bookkeeper, why is there still a need for outsourcing CPA functions?
Bookkeepers see to it that accounting records of pertinent monetary transactions are regularly updated. However, when companies begin outsourcing CPAs, they can improve their current cashflow and create a sturdy database for all their accounting records. In effect, the service provider assumes a proactive role in the operations of the entire process, including accounts payable or accounts receivable. What’s more, CPA outsourcing firms provide bookkeeping services that are half the rate charged by in-house bookkeepers – yet just as, if not even more, efficient.
Will outsourcing CPA functions obliterate my need for a company accountant?
Of course not. Company CPAs provide services that are altogether different. Sub-contractor company CPA functions involve business advisory, preparation of financial statements as well as federal and state tax returns, and compiling and submission of necessary reporting documents like those required by the bank. Financial planning, structuring and management should rest on the shoulders of in-house accountants. However, when you resort to outsourcing CPA functions to a third party service provider, you will be able to get things done on a daily basis. Outsourcing CPA work goes beyond advising and preparing financial statements or income tax returns. CPA service providers overseas see to it that core accounting functions are attended to and solidify the company’s CPA foundations. They do all the dirty accounting work, which can be time-consuming and can distract the management from attending to more pressing matters. Rest assured, outsourcing CPA functions is an answer to companies’ heavy-weight back office accounting problems and not just minor ones. Philippines outsourcing
Supposing I do not have costly financial and administrative procedures, should outsourcing CPAs still work for me?
Cost is not the only reason businesses opt for outsourcing CPA functions. One other consideration would be to reduce the complexity of their present accounting records. They are in need of a viable CPA method that can work better for their respective companies, regardless of size and social standing. The fact is, though some business processes are not costly, they are either too complicated to help the company gain advantage or the management is not aware of its own business processes due to other pressing concerns. Rather than spending time on the process, they could utilize these spare moments in planning for and developing the business to satisfy consumer needs. Besides, financial and administrative tasks are always the priority which is why they usually do not get done well or punctually. Tasks like payroll processing need a sufficient amount of knowledge and accuracy. Thus, they are usually the first process that management identifies as compatible to outsourcing.