Finance and accounting outsourcing services happen to be made to shift the main focus from the entity around the core business activity and also to obtain a competitive advantage due to:
– Less Expensive / Reduced Overheads: Expenses of maintaining accounting function are very high. The expense connected with accounting could be considerably reduced with an outsourced company. The Service provider’s cost structure and economy of scale can provide your business an essential competitive advantage.
– Elevated efficiency: Accounts Outsourcing not just brings cost advantages but will usually increase the efficiency of accounting operations. Providers using the good understanding and experience might help streamline accounting processes.
– Good Infrastructure and technology: Utilization of service providers’ technology, Infrastructure and accounting systems can lead to financial savings for the organization.
– Use of skilled sources: Finding skilled sources is among the major challenges faced by companies in current days of economic downturn. Outsourcing can offer use of highly trained professionals at lower costs. This can also eliminate issues regarding staff attrition, efforts and time allocated to recruitment, training and managing employees.
– Added Versatility: Outsourcing could be very flexible to satisfy your companies’ specific needs. The providers take proper care of the abilities essential to run the procedure giving your company a lot more versatility for purchasing key sources.
Accounting activities that may be outsourced includes:
– Processing of customer invoices, receipts, sales orders and a / r processing
– Entry of purchases/expenses and accounts payable processing
– Check and customer payments processing
– Bank, charge card, checking and credit card merchant account reconciliation
– General ledger maintenance
– Generation of monetary statements
– Aging and collection reports
– Monthly / Yearly closing of books
– Entry of transactions
– EstablishingOr updating chart of accounts and looking after ledger accounts
– Preparation of monthly and yearly financials-earnings statement, cash-flow statement and balance sheet
– Entering Account Opening Balances
– Establishing a Service Item
– Developing a Service Invoice
– Making Deposits
– Writing Check
– Posting Debit Memos
– Creating Purchase Orders
– Entering Products into Inventory
– Receiving Inventory
– Having to pay for Inventory
– Financial analysis like ratio analysis, break-even analysis, NPV and IRR
There are numerous methods through which the accounts are outsourced / maintained online. Following are the choices for outsourcing accounting / bookkeeping:
1. Remote Login: Company connects to the pc using remote login tools and updates the books (remote accounting).
2. Online Accounting: Company updates books in online accounting software’s (for instance – QuickBooks outsourcing)
3. Backup File: The backup file is restored on Service Provider’s server and also the books are updated.
The outsourcing arrangement must be correctly designed in order to strengthen internal controls while increasing transparency. Proper segregation of responsibilities must be achieved using the mixture of your team and outsourcing team people. To be able to truly achieve the worth and advantages of outsourcing, you have to make sure the following:
– Getting into Non Disclosure Agreement (NDA) using the company
– Moving out appropriate process documents for every activity to be achieved by the company
– Defining Communication protocols and timelines
– Taking Periodical data backup
– Periodical Performance Look at the company
The outsourcing firms certainly possess a edge against your competitors when it comes to getting a powerful base of accounting coupled with top quality control procedures.