Accounting and financial services are among the first type of services to be outsourced by business owners.

Accounting and financial services are among

the first type of services to be outsourced by

business owners.

By outsourcing, business owners are able to realize consistent results, increased efficiency and increased profitability. Why do many business owners still find it difficult to decide whether or not to outsource their accounting processes? Since all owners want to have quality accounting, the decision really becomes whether or not the business owner has the accounting expertise in-house or time to do the accounting work themselves. Many small and medium businesses find that outsourcing is a viable alternative to doing accounting work in-house.

The popularity of outsourcing accounting over the years can be attributed to the ease with which it can be managed. It ensures that companies are able to show accurate financial and accounting results. With outsourcing, company owners have more time to address other core business matters. Achieving high levels of success in a highly competitive market requires one to use ways that will enhance performance. Business owners have realized that outsourcing to qualified accountants is a worthwhile investment that allows reduced costs and increased profitability.

Accounting processes are structured in line with the specified needs of the business. Some of the services companies outsource the most include but are not limited to:

Payroll

,

accounts payable

, and

accounts receivable

are among the most outsourced services by businesses. This is because by outsourcing these processes, businesses are able to simplify their accounting cycle. This then gives companies more information in a faster turnaround time to allow them to make sound business decisions.

PAYROLL

Because payroll involves more than simply writing a check, outsourcing it to a payroll firm provides companies with many advantages. First, it helps your business save time as well as money. But more importantly it ensures that this task is completed on time which allows the business to avoid costly penalties. According to the IRS,

“40% of small businesses pay an average penalty of

$_{845 per year for late or incorrect filings and payments”. On top of receiving fines for}

missing payroll, businesses could also face issues such as:

• Employee Lawsuits

• Local Labor Department Investigation

• Tax Implications

These issues can be both financially costly and embarrassing within the community for your business. By outsourcing your payroll process you will gain a professional who will produce accurate payroll documents, determine and pay payroll taxes as well as process payments.

ACCOUNTS PAYABLE

Companies face the daily challenge of trying to reduce their expenditures. By paying your company’s accounts payable on time, you are able to avoid late fees which can in return help you reduce your costs. Researchers have

determined that by outsourcing their accounts payable, businesses are able to reduce both labor and the

associated costs by 80%. Business owners who outsource

accounts payable are also able to reduce the possibility of costly aspects such as:

• Late-payment penalties

• Interest charges

• Lost prompt-payment discounts

By outsourcing you are placing your business in a better financial position that allows you to reduce costs.

ACCOUNTS RECEIVABLE

By putting their accounts receivable in the hands of experts, businesses make major cost savings and improve their performance tremendously. Businesses have found

that by outsourcing aspects such as accounts receivable, they are able to reduce their labor costs by at least

20%. No more bills will go unsettled and mistakes will be

avoided. Accounts receivable significantly influences cash flow and how the company functions. By outsourcing the accounts receivable portion of your business you will reduce costs and increase the turnover rate in the acquisition of payments to be collected. Some of the services that are provided for accounts receivable by externally hired professionals include:

• Electronic bills/invoices

• Archive, collection and processing of payments

• Balance sheet management

BUDGETING

Budgeting is crucial for companies as it allows them to plan their finances. It is important for business owners to regularly review their budget as new clients come and others go. Budgeting serves as a representation of how companies spend their money while considering the needs of each aspect of their business. By outsourcing their budget process, companies expect professionals to establish a valid budget by making an assessment of costs. Experts will develop a strategy that will allow companies to limit their spending, plan for their expansion and enhance their financial performance. Because the process of budgeting is time consuming and requires skills that not every business owner has, companies tend to outsource it more and more.

With the growing need to focus on the core of their businesses, owners tend to outsource even more services.

Budgeting

,

forecasting

, and

internal audit

are some of the services that are increasingly being outsourced. For growing companies, outsourcing offers the major advantage of allowing them to focus on their expansion while obligations are increasing.

FORECASTING

Forecasting refers to how businesses plan for their future needs. This involves making predictions regarding the impact that business choices will have. Forecasting is necessary to understand the impact that some decisions will have on the future of the company. Changes need to be anticipated and forecasting helps businesses plan ahead. Businesses face challenges such as the lack of knowledge to present a quality forecast or the lack of good planners. This is why company managers outsource the forecasting process to knowledgeable experts that will be able to present them with an accurate forecast.

INTERNAL AUDITS

Internal audits aim to enhance and improve business operations. Because its purpose is to make companies more efficient, it is important that it stays independent and objective. Outsourcing the process of internal auditing provides companies with an analysis and an assessment of data as well as recommendations to improve the overall effectiveness of the business. Experts will also help these businesses to comply with the local and federal laws and regulations that ensure the integrity of any transaction performed within the company.

BENEFIT FROM

OUTSOURCED

ACCOUNTING

Outsourcing accounting services brings a lot of benefits to companies whether they are small or large. This is why we have seen an increase in the number of accounting services being outsourced over the years. Outsourcing accounting has provided companies with multiple benefits such as:

• Cut Costs by Reducing Employer Taxes, Insurance, Employee

Benefits, and more.

• Reduce Paper Usage

• Better Employment Benefits

• Proper Use of Management Time

• Improved Financial Control

• Good Referrals (Attorneys, Bankers, etc.)

When outsourcing, companies can spend more of their time establishing and improving their business rather than devoting too much time to areas they are not experts in. A lot of money can be saved by choosing to outsource services as opposed to handling financial operations internally. This is because outsourcers have the

expertise to establish and maintain proper financial operations. This is why it becomes necessary for business owners to outsource bookkeeping and focus on other tasks. Once a business begins to expand, keeping the books becomes more time consuming and complex.

HIRE YOUR OUTSOURCE

PROFESSIONAL TODAY

Business owners find it extremely challenging to avoid mistakes when it comes to handling books and the solution to this is outsourcing accounting and financial services to professionals who can handle these activities. Businesses increase their chances of success by hiring experts that allow them to save money and make the right decisions. ABIP has the right professionals to meet your business needs. Contact ABIP today. Our experts will be able to guide you and help answer your questions pertaining to our outsourced accounting services.