For a business to be successful, it is crucial that it has a proper bookkeeping and accounting system in place, Business owners can hire the services of professionals in order to stay peaceful and focus on other business operations.
Well, What is Bookkeeping?
The process of recording financial data of a company or an organization is known as bookkeeping. The process involves observing and maintaining the books and records of a business enterprise. It covers transactions such as purchase, sales, income and payments. Therefore bookkeeping and accounting services are considered essential functions of businesses. Only a proper system in place can assure that financial operations are on track and managed within company, it also helps to take significant financial decisions.
It is not always easy for business owners to find time and maintain accounting and bookkeeping records amidst their busy schedule regardless of whether their business is large, medium or small scale. But as per law it is mandatory that companies keep proper records of their accounts in order to play safe and get some significant tax deductions / rebate. And that is why it is great idea to use the services of professional accounting and bookkeeping solution provider.
Benefits that I think are there:
1. Company can focus on their core businesses: maintaining financial records, IT, HR and other administrative functions are non-core functions of business, and as per recent study, every growing business spends 50 to 60% of their time on managing non-core functions. Hence by outsourcing bookkeeping and accounting services, business owners can focus on their core business, for example retail shop owner can focus on selling stuff at store rather than getting concerned about maintenance of financial records.
2. More analytical staff than data entry team: If accounting records are maintained internally within organization then internal resources would work more as data entry operators, as they have to feed entire financial records into system, while the same staff can focus on more analytical job in case data entry job is done by outsourcing firms. This in turn would have double effect on organizational performance as resources will be used in more productive work and also as an individual, resources will feel motivated as their learning curve will increase many folds.
3. Cost arbitrage: The bottom line is that by outsourcing your bookkeeping operations, you save money on following areas:
Business saves on paying full-time or part-time wages and benefits to an employee.
Further, you also save on lost productivity costs that come along with hiring employees onto the payroll. By outsourcing your bookkeeping, you only pay for what you need—nothing more, nothing less.
Outsourcing not only saves employee cost but also saves on infra cost, like work space, stationary, electricity and common facilities
4. Cost centre vs Profit Centre: Maintaining your own accounting records in a separate department will be treated as cost centre, while the same maintenance of books of accounts by outsourcing service provider would be treated like profit centre, as this would be their bread and butter. Hence it is no rocket science to understand that profit centres are managed better than cost centres.
5. Level of accuracy: Outsourcing bookkeeping and accounting services can be quite beneficial when it comes to generating accurate results that can be as high as 99.95%. This, in turn, ensures better management of back office functions. Dedicated staff in BPO/ KPOs handles accounting services smoothly and efficiently.
6. Better controls: As most of Outsourcing service providers maintain high standards of Governance, Risk & Compliance parameters, it brings in better controls in transaction processing. Some of key leading controls like maker checker concept, value based authorization comes into picture.