Most businesses rely on an in-house bookkeeper to handle their accounting needs. This is usually an office assistant who handles the bookkeeping along with various other tasks. Having non-professionals do the bookkeeping is error-prone and expensive, especially when you can outsource the bookkeeping at a fraction of the cost while significantly improving quality. How is this possible, you may ask?
Until recently, outsourced accounting was only feasible for the largest companies. With the advent of the Internet and access to a global pool of virtual resources, outsourcing has become feasible even for small businesses. Anyone with access to a computer and the Internet anywhere can provide Melbourne Bookkeeping Services.
Outsourcing enables specialization and quality improvement not only in accounting, but in the whole company. The quality of accounting benefits from access to a rich pool of virtual accountants. The quality of other processes in the company improves, as more time is now available. Outsourcing allows the company to focus on what it does best and allows the service provider to deliver what it does best. Outsourcing, then, improves quality by allowing specialization throughout the organization.
Outsourcing offers significant cost savings. With access to a rich pool of talented virtual accountants around the world, including low-cost countries such as India, the company can save costs by lowering hourly rates and reducing the number of hours the accountant needs to complete tasks.
Outsourced accounting also reduces overhead costs. With an in-house assistant, you typically need to provide a desk with a computer and pay the assistant whether they actually work or not. This includes salary, vacation and sick time, social security, health insurance and health care. With an outsourced accountant, you only pay for the hours actually worked, and there are no additional costs.
Outsourcing reduces the company’s liability in two ways. First, errors are not prosecuted because the company can point the finger at the virtual accountant if it leaves the accounting to a third party. Second, by hiring a specialist to do the bookkeeping, the number of errors and the associated liability are drastically reduced.
The cost savings from outsourcing the accounting can be used to lower the final prices to customers and/or improve profit margins. This cost advantage allows the company to better compete.
As you can see, Outsourced Bookkeeping Services offers some significant benefits. The biggest challenges are in the areas of security and quality. This is where it can be helpful to select an accounting services provider with an extensive positive track record, rather than someone off the street.