Nowadays, SMEs (small and medium enterprises) are outsourcing their accounting functions in order to increase profitability and to focus more on the limited resources of the company such as finance, marketing and operations. It gives SMEs the opportunity to provide better financial information and reduce costs by streamlining bookkeeping processes and automating it with software. Here are five benefits of outsourcing accounting functions
1) Cost Saving
Outsourcing accounting functions can save a lot of money. It can be difficult for new businesses to find ways to cut costs, especially when they are not yet profitable, but outsourcing accounting functions is one way that can help you reduce expenses. This means that over time, you should see your profit margins improve even if your revenue and sales stay relatively stagnant. You can use that additional cash flow in areas like R&D and advertising to increase overall profitability in your business.
2) Increase Profitability
When you’re building a startup, cash flow can be tough. Without money to burn, it’s important to make every penny count. By outsourcing your accounting functions, your business can focus on more crucial tasks—and get higher returns.
One obvious benefit of outsourcing accounting functions is saving time. You don’t have to hire or train employees, and you don’t have to learn complicated software. An accountant specializing in your industry will be able to apply their knowledge without requiring training; they can go right to work. This enables you to focus on running your business more effectively, rather than spending hours each week doing things that aren’t core competencies like ordering supplies or managing payroll.
4) Time Saving
As an accounting startup, time is your most valuable resource. Just like you’re trying to save time and money with outsourcing, your clients and customers are also trying to save time and money by using your accounting services or software. Since they’re not experts in accounting (in most cases), they need professionals who can get things done more quickly than they can.
5) Access to Resources
When your business is first starting up, you likely don’t have a lot of extra cash to throw around. Hiring an accountant or other accounting professional means paying them a flat rate—but outsourcing your accounting functions means saving money on employee salaries and benefits as well as not having to pay for office space, equipment, and supplies. The result: you can use those freed-up funds for operational expenses or additional growth opportunities. For startups that are short on capital, this benefit alone may be worth hiring someone else to handle accounting.