Outsourcing means having specific duties of your business handled by someone outside of your company. It’s a popular way for businesses to lower costs and streamline operations while still handling important functions. Outsourcing is how most small businesses have managed to remain operational in their growth and development stages.
More and more companies, large and small, are turning to outsourcing as a way to grow while lowering payroll and overhead costs. How can you make it work for your business?
First, make sure the company you’re hiring can really do the job. That means getting (and checking) references. Ask former or current clients about their satisfaction with the client. Find out what industries and what type of workload the firm or individual is accustomed to handling. Can you expect your deadlines to be met, or will your small business’s projects be pushed aside if a bigger client has an emergency?
Also, make sure you feel comfortable with who will be doing the work and that you can discuss your concerns and needs openly.
The Advantages of Outsourcing
When you start your company, there’s enough on your plate already without having to worry about which bookkeeping software to download, and unless your finances are going to be particularly straightforward, you’ll probably consider seeking help from a professional to streamline and get the most out of the process. You may think that outsourcing your bookkeeping is an expense that you can’t afford, but there are plenty of benefits of doing so.
More time
Outsourcing your business’s bookkeeping operations frees up valuable time that can be put into improving your business. Backend office functions can be a heavy distraction from the day-to-day running of things and having your bookkeeping in-house can lead to a conflict of interests. All of these time-wasters and distractions need to go—out of sight, out of mind.
Focus on core tasks
Outsourcing your bookkeeping operations allows you to refocus your in-house resources on the activities that make you profitable without sacrificing the quality of bookkeeping.
Lower costs
Entrepreneurs and small business owners are always looking for creative ways to accomplish more of their business goals for less money. Outsourcing can lower costs by reducing the expenses associated with bringing on new employees, allowing your business to get the same amount done for less. This allows companies to devote more resources to what they do well, which can improve efficiency and increase competitiveness.
By outsourcing your bookkeeping, you only pay for what you need.
Better Cashflow
With bookkeeping outsourced to a professional, you’ll find that you’ll be provided regular, up-to-date information regarding your cash flow and business performance. Without that information, you may otherwise have to wait until the end of the financial year to see how your business is performing. Having a view of up-to-date financial reports and well-maintained books can have great knock-on effects and help you to produce clear and accurate cashflows. That accuracy in your cash flow will be of great benefit for financial and tax planning.
Credibility
Having well-maintained and professionally handled bookkeeping can not only give a business owner peace of mind that everything’s in order, it’s also looked upon favorably by banks and other financial institutions. Potential investors, lenders and stakeholders will look for credibility surrounding your finances. There’s no good reason to risk falling at the last hurdle of fundraising due to poorly managed books.
For some, handling your own bookkeeping is an option worth considering, but it’s important to weigh up the benefits of using external professional help. If you have any queries about whether outsourcing your bookkeeping is right for you and your business, we’re happy to help and point you in the right direction.
Outsourcing functions, such as when your accounting department is short-handed during tax season and auditing periods, provides the additional resources you need for a fixed period of time at a consistent cost. Working with the same accounting firm or contractor each time provides consistency in addition to flexibility.
Access to top systems
Outsourcing your bookkeeping operations gives you more access to the top tools in the industry. Most businesses can’t afford to pay for the extremely expensive bookkeeping programs nor can they afford to spend the time keeping up with changing laws and regulations. By outsourcing, you’re essentially purchasing those tools and that knowledge by proxy, but it’s even better—you don’t have to actually do any of the work!
How to Get the Most From Outsourcing
When considering how outsourcing can help you grow, don’t limit yourself to looking at the cost of hiring an outside bookkeeping company versus handling a task with your current staff. Focus on the value a bookkeeper’s expertise adds to your company.
Do what you do best and outsource the rest
Owning a successful business and actually running one are two quite different things. You might have huge amounts of capital and plenty of regular customers, but your business won’t thrive if you don’t have effective bookkeeping skills as well — at least if you intend to run the financial side of things yourself.
Bookkeeping is an essential role that every business owner should be able to handle, and s/he should enlist the help of someone who can take care of this task if he cannot. You don’t necessarily have to hire an accountant or in-house bookkeeper to do this for you. Many business owners outsource their bookkeeping needs instead.
Here’s a look at some of the benefits and considerations involved with hiring an external bookkeeping service for your business.
You’ll Get an Unbiased Financial Opinion
One disadvantage of hiring an internal bookkeeper is that he may become emotionally involved with the day-to-day running of your business. An external bookkeeping service has no emotional baggage regarding your business. Its goal is to give you a clear insight into your business’s financial position, not to pat you on the back and tell you everything is going to be OK even when it’s not. A bookkeeping service only does the accounting work required to keep your business up and running and show you its financial strengths and weaknesses. It’s not technically a part of your company.
You’ll Avoid Conflict of Interest
It can be risky for some businesses like partnerships to entrust the accounting to one of the owners. Accusations of misconduct could potentially ruin the business relationship, even when an error in record keeping is unintentional. An owner might find himself in the unfortunate position of having to make a choice between what is best for himself and what is best for the company. This isn’t to say that he wouldn’t put the business first, but others within the company might wonder about his intentions if something should go wrong. Using an independent bookkeeping service avoids this pitfall and can boost confidence among the owners that all accounting statements are true, accurate and without bias.
What to Look for in a Bookkeeping Service
External bookkeepers are typically individuals with relevant experience in accounting and auditing services provided to a wide variety of business types. When interviewing bookkeepers, choose one that is well acquainted with your type of business. Look for an external bookkeeper who specializes in working with companies that are similar to yours, but don’t overlook basic expertise in the process. The service should also possess excellent overall skills and the experience to determine profits, turnover, and losses among other financial ratios to help you determine the financial position of your business.
One of the key components of running any business is keeping a firm grasp on the overall costs incurred. A business owner’s goal is to reduce the total costs of his operation, and one way to do this is to control the wages and salaries of workers — usually by employing fewer people.
The salary and benefits paid to an in-house bookkeeper can be significant. A business can run without a bookkeeper on staff if the business owner — or one of the business owners — collects invoices, payments, credit sales, and other pertinent financial information. He can then hand the necessary documentation over to the external bookkeeper for accounting purposes. The cost of outsourcing your accounting is typically significantly less than employing a full-time bookkeeper.
Times Are Tough – Outsource Today To Reduce Your Overheads!
To keep pace with the growing economy of UAE, and to comply with the legal requirements for all levels of business, as well as to effectively compete with other businesses, it is sometimes difficult for companies to manage their own business accounting activities without having to hire an accounting company (especially for SMEs). Outsourced accounting services, therefore, become the best option.
The advantages one would derive from accounting outsourcing services are countless. We see a recession and a great possibility of depression in the economies of the world. Saving on costs has therefore become not only important but also a necessity.
BookRobo Outsourced VAT Accounting & Bookkeeping provides comprehensive accounting and finance outsourcing services to small and mid-size companies allowing owners and/or senior management more time to focus on the growth of their business.
Our accounting packages are designed to complete your daily financial record-keeping tasks as well as your month-end closing tasks, followed by the preparation of monthly financial reports and analysis of your business.
With the rise of the legal requirements of businesses to maintain proper financial records, it has become even more important for every business to hire bookkeeping experts in Dubai.
Are you ready to oustource your bookkeeping to #1 bookkeeping professionals in the UAE? Get in touch with us for a free initial consultation.