Accounting outsourcing is the business strategy of outsourcing a portion or all of the accounting functions necessary to keep the business operational. While the concept of outsourcing is often associated with small and medium sized businesses, large corporations may also outsource their accounting needs to a reliable accounting service. There are a number of reasons why a company would consider accounting outsourcing, with most of the reasons focusing around making the best use of the resources available to the business.
For small businesses, the question of why they might outsource accounting functions often has to do with limited resources. Rather than employing a full-time staff to handle such functions as managing the accounts receivable and payable, processing payroll, or calculating and paying federal and other applicable taxes, the small business owner may choose to engage the services of a reliable accounting firm. As a result, the business will have fewer salaries to cover and less benefits to pay, and does not have to be concerned about absenteeism that could delay posting payments or getting a payroll out in a timely manner. With these functions in the hands of a reliable accounting outsourcing provider, the small business can use its resources for other important tasks, such as enhancing the production process or implementing strategies to increase sales.
Mid-sized businesses may also find that accounting outsourcing is a good option for many of the same reasons. Outsourcing means the business has the benefit of trained accounting professionals without having to supply salaries and benefit packages, and can redirect its resources to other projects. At the same time, a mid-sized business may find that choosing to outsource the accounting functions also cuts expenses for office supplies substantially, which in turn helps to increase the bottom line for the business each month.
Corporations sometimes find that accounting outsourcing is helpful when it comes to maintaining the fast pace that is common with many larger businesses. Engaging outside services to handle accounting functions means there is no need to spend time and money hiring and then training qualified personnel. As a bonus, since the accounting records are stored remotely and can usually be accessed by authorized personnel when and as needed, outsourcing means that officers and others can quickly get to the financial data they need, even if they are traveling. Benefits of this type work well in a corporation where people constantly engage in multitasking, and need up to date information as quickly as possible.
Fees for accounting outsourcing vary, depending on the needs of the client. Many services offer accounting packages with flat fees that cover a specific type and number of accounting transactions, as well as a schedule of charges for additional functions that may be needed from time to time. Others allow customers to build customized packages, including only those functions they actually need, charging the customer only for the functions selected. Customized packages are often worth consideration by small businesses or mid-sized businesses that wish to keep some functions in house, while outsourcing the remainder to a vendor partner.
