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Outsourced Accountants Or On-Staff Accountants. Advantages And Disadvantages

Business person working on finances with a calculator

Outsourced Accountants Or On-Staff Accountants. Advantages And Disadvantages

With the further growth of the development of economy, with its integration into international processes, a number of new methods appear for solving many problems in various industries in the market space.

In the current competitive environment, the development of any production process depends on the rational use of the company’s own resources. In this article, we will tell you about the advantages and disadvantages of outsourced accountants and on-staff accountants.

Due to the positive growth of small and medium-sized businesses, problems with the organization of accounting in enterprises are spreading. Accounting is one of the most important components of any entrepreneurial activity; it is the basis of economic information and information support of the management process.

Only a well-functioning accounting system allows you to obtain the necessary information and systematize it to ensure the management of the economic activities of the enterprise, for making management decisions.

How To Outsource Accounting Staff

Considering that now the personnel issue is very acute, and therefore, it is quite difficult to find a good specialist. In addition, accounting generally requires significant costs, which can deplete the material resources of the enterprise. Therefore, most companies that cannot afford to keep an accountant on their staff shift all responsibilities to independent specialists, or, as it is now fashionable to call, outsourcing companies.

The term “outsourcing” itself means “the use of external, other resources”. This is not a quite new type of accounting service in the labor market, it has long been a well-known practice in many companies.

The concept of outsourcing should not be confused with work contracts or the provision of certain services. In this case, the customer simply transfers certain responsibilities of the company, which they cannot perform on their own for one reason or another. Whereas outsourcing companies are entrusted with those functions that the customer could, in principle, perform independently.

This range of services is mainly common among relatively small and medium-sized businesses. Why is it so? It is very simple since entrepreneurs have faced such a problem as a shortage of professional staff in the field of accounting services. In addition, we now have high competition not only with domestic firms but also with foreign companies.

Unfortunately, the education system is not perfect enough and therefore does not meet the demand for qualified personnel, while the level of business development, in contrast to the level of education, has rather high indicators. And therefore, accordingly, it is not cheap to have a professional accountant at the enterprise. Of course, it is appropriate for large enterprises and companies to keep their own accounting staff. But if we are talking about a small and medium-sized enterprise, a rational solution would be to hire an outsourcing accountant.

Among American enterprises that already use such a “young” service sector, the majority are of an industrial nature. The main directions of services of outsourcing companies, which are now used by many enterprises, are outsourcing of business processes, as well as information technology outsourcing. Moreover, it should be noted that the provision of accounting services unreasonably takes almost the first place. That’s why there is no need to introduce an understanding of the priority of just such a type of service as accounting.

Services Outsourced Accounting Companies Provide

Before specifying all the pros and cons of an agreement with outsourcing companies, it is advisable to look at the whole range of services that an outsourcing company can provide to its client. Namely:

  • Accounting in all its areas
  • Guarantee that all obligations of the client company to local authorities will be fulfilled
  • Preparation and submission of tax reports and declarations
  • Representation of all interests of the client company in the tax authorities
  • Full preliminary preparation of documents of the client company when conducting an audit on the territory of the company
  • Consulting on all the nuances of accounting

Advantages Of Using Outsourced Accounting

The following points can be noted in the advantage of cooperation with outsourcing companies:

  • The total cost of outsourcing services will cost the entrepreneur-customer several times cheaper than keeping a staff of accountants
  • It is possible, in principle, to exclude the possibility that you will hire an illiterate accountant who will make a bunch of mistakes, which will lead to penalties, since, most often, the outsourcing company has professional accountants on its staff
  • There is no need to worry that your accountant will get sick and go on sick leave or vacation, as outsourcing services include the uninterrupted work of their employees
  • A certain area is freed in the office of the customer company, which was previously allocated to the staff of accountants, or an accountant
  • The company-customer, by concluding a contract with an outsourcing company, will save the time and resources of the enterprise
  • All duties, rights, functions, and responsibilities are secured by an agreement, which has its own legal force.

Outsourcing companies have a number of options in ensuring cooperation with their client in terms of information transfer. The transfer of documentation can take place via the Internet, or certain computer programs that are developed by the programmers of an outsourcing company. Or, in general, the transfer of documents directly to the company through a courier.

In addition to a number of existing advantages, outsourcing services also have certain disadvantages. The most important of them are:

Confidentiality Of Information

With a large increase in the crisis, the shadow economy, and competition, it is rather dangerous to trust your financial performance into the hands of other firms, this can lead directly to information leakage. Or, through the simple negligence of the outsourcing company employees, important primary documents may be lost. That is, before agreeing to such services, you should check the company for the reliability of the services.
In the current competitive environment, the development of any production process depends on the rational use of the company’s own resources. In this article, we will tell you about the advantages and disadvantages of outsourced accountants and on-staff accountants.

Remoteness

Not all managers like it when there is no accountant “at hand”. Most tend to believe that the person doing the bookkeeping should be on the staff. Consequently, in the current situation, having considered all the pros and cons, you need to be able to objectively assess all the rational capabilities of the company for further development and prosperity.

About The Author
I am Amelia Grant, journalist, and blogger. I think that information is a great force that is able to change people’s lives for the better. That is why I feel a strong intention to share useful and important things about health self-care, wellness and other advice that may be helpful for people. Being an enthusiast of a healthy lifestyle that keeps improving my life, I wish the same for everyone.
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