Globalisation, technology advancements and changes in the regulatory environment present many challenges to a CPA firm. One of the challenges is to balance the completion of accounting tasks along with increasing the firm’s productivity. Outsourcing is one of the solutions which can help these firms increase productivity and maximize returns on their core competencies.
Instead of being a niche strategy, outsourcing has become a dominant one for most accounting firms. Not only does it free up the valuable time, it also provides numerous added benefits that contribute to increased productivity.
Access to latest technology
Like in every other domain, technology is making an impact in accounting industry as well. Most CPA firms can’t afford to pay expensive bookkeeping tools nor can they spend time to keep themselves updated with the latest technology or changing laws and regulations.
With the advent of cloud accounting, the number of tasks have become easier to handle, which was not previously available. But how to decide which apps or software to use to take complete advantage of technology? External service providers invest in latest technological advances knowing which ones are best for which business. Outsourcing accounting operations can ensure that all the tasks are handled by experts that stay abreast of latest technology to maintain a competitive edge.
Outsourcing is cost-effective
Cost effectiveness remains one of the most visible benefits that outsourcing brings about. Hiring a full-time bookkeeper or accountant may be too expensive to shoulder for CPA firms as compared to hiring a reliable accounting services provider. The annual salary of a bookkeeper is roughly $45,000, with additional 20% overhead cost on base salary. When outsourcing, your firm won’t pay the overhead costs.
Outsourcing of various accounting activities converts fixed costs into variable cost reducing business expenses. Bookkeeping, payroll management, and accounts management can be outsourced if the provider can perform accurately than a firm can in-house. This allows a firm to save a huge amount on operational costs and focus on core business processes.
Companies benefit from scalability
Outsourcing is highly significant for CPA firms as it can help clients increase productivity without the common obstacles encountered by these firms. These obstacles include dealing with the lack of talented hires during peak seasons.
Outsourcing provides a scalable solution to your firm – on demand. It saves you from the stress of worrying about finding temporary resources during peak tax times or cut down when the busy period ceases. External accounting firms can easily be scaled according to your business needs.
The service provider already has a team in place to meet your deadlines. When you are outsourcing your accounting, a business is assigned a professional accounting team. This dedicated team complements your existing accounting workforce to achieve higher productivity and separation of responsibilities at a fraction of the cost of a permanent accounting department.
24/7 Financial assistance from experts
Outsourcing gives a wider pool of expertise. Because of their experience with numerous companies, an outsourcing firm can also help you innovate and implement new strategies for your business growth.
Accounting service providers hire highly experienced professionals to perform various accounting activities. These consultants can offer timely advice and can help in crucial moments for your firm. Since most of the packages offered include customer support, a specialist in accounting domain can provide valuable information. There are many topics which entrepreneurs need to be advised about such as tax planning, entity structure, and growth strategy. They can also answer all your queries and share their previous experience which can lend wisdom to key decisions of your firm.
Focus on core functions
When you are running a small firm, it can be tempting to do everything on your own, which probably sounds like a cost-effective way. However, this is not always the case. In fact, handling everything on your own can end up wasting money. The business environment is now becoming challenging for both big companies and start-ups. While conducting accounting operations, they often lose resources and valuable time.
Outsourcing some basic accounting activities, on the other hand, can be a smart move helping in creating a happier and productive workplace. Cloud outsourcing allows businesses to be more effective, efficient and more competitive. It is beneficial for an accounting firm to outsource administrative tasks like accounting and bookkeeping and focus on their core competencies. They don’t have to be worried about what is happening on the back-end. This is particularly helpful for a CPA firm having limited resources.