Accounting Outsourcing - Survival in the Times of Recession
The most complicated part of a business is managing its accounts, keeping them up-to-date and checking for any fraud or theft in the business system.
Tax is calculated on the profit and profit is based on how we present the accounts.
There are various methods to show one thing and this would make it very complicated for a layman to understand.
For example just to show the stock (inventory) there are at least 3 methods, all leading to a different amount in the balance sheets.
Tallying the sheets is the cause of headache for small scale businesses who have to manage their own accounts.
There is a simple solution to this, a trend which has been followed since a long time now; accounting outsourcing.
Simply put, it means someone else handles your accounts, for a reasonable fee.
There are numerous advantageous in outsourcing work for small sized businesses to large scale business houses.
The cost incurred when one hires a CPA to do the accounting work increases and the owner has to pay for various other perks like insurance and pension etc.
Outsourcing accounting work would not only reduce costs it would also reduce the burden off the shoulders of the owner.
The quality is the same in fact sometimes even better since the people doing the outsourcing work have a lot of professional experience and qualification at the same time.
There are other benefits like they would prepare monthly review of business by showing various statistics and graphs about the performance of the business over a period of time.
Any theft or misstatement would not go unnoticed since the outsourcing firms have them checked almost three times by various people.
They also give quality advice since they do the accounts for other firms in the same industry hence they have a fair idea of the trends followed and beneficial.
They would generally warn the business owner if they realize that the business has not been doing well and what steps to take to reduce the costs.
Although there are plenty of benefits, one must not forget a few points in dealing with accounting outsourcing firms.
The owner must provide all the business details to the outsourcer and nothing should be kept a secret.
If the firm is makings a loss and trying to hide that, then the owner should give the exact amount of loss.
One should remember that the outsourcer will not be able to present a correct statement if all the information about the business is not supplied.
The owner should also check at regular intervals if the outsourcer is not misusing the information given to him to a third party.
Also a check should be maintained on the quality of business outsourced.
There are various places a firm can outsource to.
India being the hub of all accounting outsourcing destinations, it has a workforce of professional and experienced accountants who are willing to work for almost one fourth of the salary a normal CPA would charge.
Tax is calculated on the profit and profit is based on how we present the accounts.
There are various methods to show one thing and this would make it very complicated for a layman to understand.
For example just to show the stock (inventory) there are at least 3 methods, all leading to a different amount in the balance sheets.
Tallying the sheets is the cause of headache for small scale businesses who have to manage their own accounts.
There is a simple solution to this, a trend which has been followed since a long time now; accounting outsourcing.
Simply put, it means someone else handles your accounts, for a reasonable fee.
There are numerous advantageous in outsourcing work for small sized businesses to large scale business houses.
The cost incurred when one hires a CPA to do the accounting work increases and the owner has to pay for various other perks like insurance and pension etc.
Outsourcing accounting work would not only reduce costs it would also reduce the burden off the shoulders of the owner.
The quality is the same in fact sometimes even better since the people doing the outsourcing work have a lot of professional experience and qualification at the same time.
There are other benefits like they would prepare monthly review of business by showing various statistics and graphs about the performance of the business over a period of time.
Any theft or misstatement would not go unnoticed since the outsourcing firms have them checked almost three times by various people.
They also give quality advice since they do the accounts for other firms in the same industry hence they have a fair idea of the trends followed and beneficial.
They would generally warn the business owner if they realize that the business has not been doing well and what steps to take to reduce the costs.
Although there are plenty of benefits, one must not forget a few points in dealing with accounting outsourcing firms.
The owner must provide all the business details to the outsourcer and nothing should be kept a secret.
If the firm is makings a loss and trying to hide that, then the owner should give the exact amount of loss.
One should remember that the outsourcer will not be able to present a correct statement if all the information about the business is not supplied.
The owner should also check at regular intervals if the outsourcer is not misusing the information given to him to a third party.
Also a check should be maintained on the quality of business outsourced.
There are various places a firm can outsource to.
India being the hub of all accounting outsourcing destinations, it has a workforce of professional and experienced accountants who are willing to work for almost one fourth of the salary a normal CPA would charge.