Updated: Jun 6, 2020
In the last decade, the popularity of outsourcing has soared beyond expectations. Although some groups have eyed outsourcing with suspicion, its supporters contend that it is one of the most useful business strategies of the 21st century. We will briefly examine the most significant advantages of outsourcing and determine when it is appropriate to outsource your company’s bookkeeping functions.
Efficiency and saving money, in whatever amounts, at every possible opportunity is more important than ever as competition increases daily. This is where businesses can benefit from outsourcing comes. The rise of an educated, specialized workforce has encouraged many companies across the world to outsource substantial fractions of their businesses. So, what is it that encourages businesses to outsource their operations?
For starters, it helps keep costs down for the company outsourcing its activities. Unless a company has a brand reputation for conducting all of its activities within a specific geographic region, it's preferable to hand over operations to third parties at a cheaper cost than what can be achieved in-house. Every business possesses a competitive advantage and in contemporary times, the wise decision has been to direct most of your company’s energy towards your major strength, and outsource everything else.
Companies may also resort to outsourcing when they feel that the human resources they currently possess are not specialized to look after a particular operation of the business. Outsourcing allows the company to get that operation done by experienced, qualified individuals at a lower expense than hiring and training employees. Training new or current company personnel can be expensive and time consuming. Keeping in mind how quickly technology is evolving and improvising, one of the most important advantages of outsourcing is that it allows companies to use the latest technology.
Reasons to Outsource Your Bookkeeping
When it comes to bookkeeping, there are a number of reasons why it is an excellent decision for small businesses to outsource their bookkeeping.
· It helps businesses keep track of their financials by experienced professionals, in an environment that is structured to optimize efficiency.
· It helps small to medium sized enterprises focus on building the business rather than bean counting.
· It avoids the risk of employee fraud/theft by separating the duties of staff by that of the third party bookkeeping firm.
· It's cheaper than hiring an employee. Certified Pubic Bookkeepers are in high demand and for that reason may demand a higher salary. Businesses must also keep in mind the costs of employer taxes when hiring a bookkeeper on staff rather than outsourcing.
The Best Time to Outsource Your Bookkeeping
So, when should companies consider outsourcing their bookkeeping? While there are many benefits to it, it may not be feasible for large businesses with an established accounting department to outsource. The best time to consider outsourcing bookkeeping is when the business is on the cusp of doing it themselves or hiring a part-time employee. For small businesses, this means saving precious time and finances, which be used to help the business grow.
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