In today’s world of continual cost cutting and innovation businesses are trying to determine how they can successfully reduce overheads, increase profits and deliver a better product or service than last year to stay ahead of the competition. One way businesses are achieving this successfully is through the principle of outsourcing.
Outsourcing has penetrated nearly every major identifiable business department in the western world whether it be sales, customer service, advertising, production and even bookkeeping, accounting and financial management. This trend in itself proves that the expertise is there so why not seek it out and take advantage of it? Well, the reason that businesses often do not consider this as an option is management do not want to risk compromising the products or services that they deliver to customers.
If outsourcing can be achieved successfully at a basic level without compromising the quality of a business’s products or services can this be done across all business units? Time has proven that outsourcing can be achieved with a level of success as everyone will have experienced the product of outsourced sales or customer service when engaging multi national and international companies. But What if a business considered outsourcing the bookkeeping and accounting functions in its operations? Could a business unit that is so critical to everyday operations and carries a high level of information sensitivity be successfully outsourced?
When somebody thinks of the term “outsource” they generally think overseas but this is not always necessary to achieve the results that are sought after. This is true especially if someone were looking to outsource a business function which requires a greater level of knowledge and expertise of national law and customs they would feel more comfortable outsourcing domestically to a business which specialises in that particular need. In today’s marketplace in Australia the domestic market is very competitive in the industry of accounting and bookkeeping services.
Today if a business requires personnel to execute bookkeeping or accounting functions that business would typically first look to employ somebody internally to fulfill this need. However there are a number of factors that should be considered if a business is seriously evaluating whether to hire internally or engage an external accounting or bookkeeping firm to fulfill the immediate and foreseeable financial needs of the business.
Overheads are one of the greatest considerations of taking on extra staff. Beyond what the basic wage and entitlements are of employing somebody you also need to consider other employment costs. Other employment costs which a business takes on generally with a new employee are the recruitment and training costs, staff amenities (tea and coffee etc.), additional office space, cleaning costs for the additional office space. The list could continue on but these are some of the main costs incurred when taking on new staff. But what if a business could engage someone to take care of the businesses bookkeeping and accounting requirements without having to introduce any of the overheads?
Engaging an external domestic bookkeeping or accounting firm could be a game changer for many small and medium sized businesses. Having a professional bookkeeper or accountant that can pick up the workload of a business without introducing the overheads listed above is probably something that many businesses have not even considered and have just come to expect holistic employee costs a bi-product of doing business. This does not need to be the case though as we will now explore the advantages of outsourcing the bookkeeping and accounting functions of a business.
The advantages of engaging an external or public bookkeeper or accountant for the financial requirements of a business are as follows. A public accountant or bookkeeper must keep up professional development requirements in order to maintain their registration with the tax Practitioners Board. Both accountants and are required to have specific qualifications in order to practice in the industry this ensures that the service which is delivered is generally of a high standard. In comparison to this internal bookkeepers or accountants require neither in order to execute their job function.
Further advantages of engaging a public bookkeeper or accountant are the reduction of overheads which include all costs which would be incurred in employing a staff member (see paragraph 6). In some cases it may also negate the requirement of having a physical office where over the counter service is not required. Also the requirement of having to manage bookkeeping or accounting staff can also be bypassed, where a strict criteria of deliverables exist and are communicated to the bookkeeper or accountant effectively.
Baring in mind the advantages of engaging an external/public accountant or bookkeeper a business manager should strongly consider their options when confronted with the opportunity to make this decision.
If you are considering outsourcing your accounting please follow the link for more information.