Keeping a business afloat means ensuring a steady flow of income. In order to make that happen, accounting is necessary to keep your profits and expenses balanced. Needless to say, accounting is a crucial part of your business that you need to keep track of. Managing your records to keep your budget on-track and making sure your monetary practices are legally compliant are a hefty job — one which requires the expertise of certified accounting professionals.
While most businesses default to keeping their accounting in-house, some companies opt to hire offshore teams instead. These are usually contracted from outsourcing partners from countries such as India and the Philippines, which are the top global accounting sources right now. Part of the reason why companies outsource to the Philippines is that they can save 60% to 80% compared to hiring in-house.
Outsourcing your accounting functions come with both pros and cons. But before we get to them, let’s get you up to speed on what exactly offshore accounting entails.
How does outsourced accounting work?
Outsourced accounting refers to having your finance and accounting services delegated to an outsourcing firm or business process outsourcing (BPO) company. This method creates opportunities for businesses to hire experts from cost-effective labor markets, without having to manage an in-house team. In recent years, the practice has gained significant traction due to its numerous benefits. In fact, along with IT, 37% of all accounting tasks get outsourced.
Why should businesses outsource accounting?
Outsourced accounting gives you the same high-quality services at a fraction of the cost, and it can be just as effective as an in-house team. Although you might have the option to handle accounting services in-house, this can prove to be too expensive and can demand your frequent attention as a manager.
Offshore accounting services can be useful in delegating complex and non-core functions, such as tax compliance, accounts receivable and payable, bookkeeping, payroll management, and inventory management.
Finally, let’s take a look at what makes outsourced accounting so great. In the same vein, there are also some disadvantages, to which we offer up some solutions:
- Compliance: Offshore accounting teams are trained and well-versed in accounting regulations, ultimately reducing the probability of any legal issues.
- Shared Management: Good outsourcing partners can provide management oversight with dedicated leadership and quality control teams ensuring your offshore team remains productive and aligned with your business goals.
- Accuracy: Outsourced teams are focused on making exact calculations and delivering accurate financial information. With no room for mistakes and miscalculations, they support your processes and keep you closely on track.
- Transparency and Security: Reputable outsourcing firms keep a close eye and will prioritize your data security. Not only that, they’ll maintain transparent communication with you, keeping you up-to-date about current progress.
- Ease of Recruitment: Finding and hiring qualified accounting professionals can be time-consuming. Luckily, your outsourcing partner has their own dedicated recruitment team to pool talent for you.
- Communication Issues: Overcoming language barriers is essential for effective collaboration. One solution is to hire a team from the Philippines, where English proficiency is high.
- Timezone Difference: To get rid of timezone differences, make sure to partner with an outsourcing provider that offers round-the-clock services, or one that operates simultaneously to your hours. This ensures your accounting needs are met regardless of your location.
- Quality Control Issues: Reliable outsourcing partners have established management practices in place that provide continuous oversight, so you don’t have to worry about your team being unproductive.
Wrapping it all up, opting to outsource your accounting functions is a good way for small and large businesses looking to streamline their financial processes, all while reducing costs, and unlocking access to experts in the field. The pros greatly outweigh the cons, with the flipside being easily countered just by linking up with a reputable outsourcing partner.
Your business can harness the benefits of offshore teams to drive growth and success. FGC+ can be exactly that, and leverage your strengths with exceptional offshore teams. Learn more at www.fgcplus.com.