Authored by Athena Nagel
Budding startups are often bootstrapped, which leaves them with less budget and less time to deal with all the responsibilities of the business. Owing to this, entrepreneurs and small businesses have a hard time managing all the functions by themselves. Small companies especially struggle more with accounting since it requires a high degree of specialization and skill.
In such situations, outsourcing accounting services to the experts is the best option. This frees up resources for you to focus more on your core business.
Outsourcing accounting is a great way to reduce overhead expenses and boost efficiency. Moreover, outsourcing provides a chance to use high-quality services at lower costs.
But, accounting is a vast field of work with a variety of functions. For instance, some functions like bookkeeping focus on the day-to-day tasks, while functions like financial planning focus on the bigger picture. So, here are some accounting functions that you can outsource as a small business or a startup.
It is a routine activity that can consume a lot of time. Bookkeeping is done regularly to keep an account of day-to-day business transactions. However, cloud bookkeeping software is the new way to maintain your books efficiently.
Many bookkeeping software provides a detailed report that can help you make a calculated decision and correct the course of action if needed. Outsourcing bookkeeping gives you access to qualified professionals who ensure a high degree of accuracy in the data.
Preparation of Financial statements or reports
Drafting and maintaining financial documents, such as Profit and Loss statements, reconciliation statements, etc., can be pretty complex for inexperienced individuals.
Preparing financial reports requires the expertise of Certified Public Accountants (CPA). CPAs accurately maintain your books by recording all the financial information of your business. They also counsel the company in times of any financial crisis.
It would help if you had an accurate evaluation of the company’s financial position to make the right decisions. An accounting firm helps create cash flow projections and other forecasts that allow companies to predict future revenues and analyze costs. Insight into the company’s financial position can help determine the company’s growth.
Cost accounting helps one accurately determine the actual and overall cost of rendering services or manufacturing products. This accounting function collaborates with the marketing, R&D, supply, and manufacturing departments to help the company make better pricing decisions. This allows you to figure out when to scale up the business or when to scale down.
Tax Reporting and filing
Outsourcing the process of tax filing helps to maintain compliance with the tax laws of the city, state, and country. In addition, accounting firms will help reduce the chance of computational financial errors. Moreover, CPAs will declare taxes and submit your return before the deadline to ensure a smooth process.
Since the outsourcing companies are well qualified, they help you maintain compliance with the changing tax regulations, thus reducing the risk of penalties. Accounting companies will keep your business up to date under any tax or accounting requirement.
Outsourcing these functions will increase your company’s efficiency as it helps you focus on your primary business goals.