Due to the rising market competition, growing regulations and compliances and increasing customer demands, companies are under immense pressure to enhance their efficiency while reducing their internal costs and overall expenses. For any company, managing the accounting process can be quite challenging, as accounting entails a range of mundane, repetitive tasks such as data entry. Moreover, some accounting functions, such as bookkeeping, payroll, and taxes, need dedicated resources who are specialists in their designated fields. Since transaction volumes are rising by the day, they are putting more pressure on the available resources in enterprises and taking up a lot a precious time that owners could have otherwise spent on their core business functions. Therefore, companies are seeking an effective business solution to tackle their accounting woes. With dedicated organizations taking care of these niche areas like accounts outsourcing, bookkeeping outsourcing companies, payroll outsourcing companies, and even tax outsourcing services providers, companies can get a breather from managing these in-house. Other than outsourcing, companies also can automate their accounting processes.
Both the concepts and the profits companies can reap from them have been discussed in this article.
Technology is changing the future of accounting, and with technology, automation has humbly paved its way into the accounting profession. Accounting automation helps do away with routine accounting tasks, such as bookkeeping, which can be easily automated to have less resources tied down. Accounting automation successfully brings the entire accounting, invoicing, finance, inventory, reporting and CRM functions to work in sync and harmony, leading to a less stressed and happier business. Automation can also work in tandem with companies’ banking partners and do all the hard work on their behalf, right from reviewing entries to tallying books—everything is taken care of.
The benefits of automating the accounting process are diverse, and listed below are the main reasons why it is a sensible decision for companies to implement accounting automation.
- Tax compliance: Accounting automation software and systems are designed and configured to automatically comply with the latest tax regulations and compliances. Therefore, with accounting automation, companies do not have to worry about skipping tax compliances and not adhering to accounting regulations.
- Time and money savings: This is the most important reason that drives millions of companies worldwide to opt for accounting automation. Once companies have entered and saved the information of vendors, customers, and employees, they don’t ever have to re-enter or refill the data again. Forms, invoices and even checklists will be pre-populated with the saved data, and users simply have to pick their choice, which helps save not just time but also money.
- Improved accuracy: Automation and accuracy walk hand-in-hand. Since accountants are not re-entering data into the system over and over again, the chances of errors reduce drastically. Moreover, the accounting software does all the calculations, including totals and subtotals for all types of transactions such as sales orders, profit loss statements, credit memos, cash disbursements, and purchase orders. The software also calculates the sales tax and payroll deductions, leaving no scope for human errors and increasing the overall efficiency.
- Customisable reports: The accounting software greatly increases the reporting efficiency of companies. Without automation, it is a tiresome and error-prone task to generate customisable reports for cases such as defaulting customers, best-performing assets, worst performing employees, etc. However, with automation, this challenge can be easily addressed because the accounting software arrives pre-configured with multiple report templates that can be easily customised.
- Faster payments: To keep the business running, receivables matter and the accounting software makes it easier for companies to receive payments from their customers. The software has functionalities that allow companies to send invoices through emails and accept credit/debit cards for processing payments.
Apart from using an automation software, the other solution companies can opt for is to completely outsource their accounting process. With automation, companies still have to monitor and review the information being fed into the systems and even employ appropriate measures to protect, upgrade and maintain the implemented systems. With outsourcing to an accounting outsourcing company, all of these hassles take a step back, as a third-party provider will be completely responsible for carrying out all accounting tasks on behalf of the companies. Therefore, in the long run in terms of cost savings, outsourcing the accounting process is a more viable option for companies. Let’s glance through the major benefits companies can gain by outsourcing their accounting process.
- Automation: The accounts outsourcing process offers all the automation power provided by an accounting software. Moreover, with the rise of cloud computing, it is now possible to transfer data from one system to another with large-scale automation, which was previously not accessible. Due to the cost-efficiency of cloud services, companies, large and small, can choose the services of a cloud accounting provider to leverage the cloud flexibility and access resources without spending a lot of money.
- Round the clock financial advice: Outsourcing the accounting process to a specialised accounting outsourcing company provider allows companies to access the accounting expertise of the provider, which can prove to be extremely beneficial. These services are usually available 24/7 at the request of clients and are complementary with the service package. However, some accounting firms do offer expert financial guidance at an additional cost. This guidance can be for diverse topics, including tax planning, entity structure and growth strategies.
- Reduced tax preparation fees: Most public certified accounting firms charge clients by the hour for tax preparation. They cannot afford charging a fixed rate because most the data they receive from companies is either incomplete or inaccurate. Therefore, they have to put in a lot of hours for tax preparation and charging a fixed rate would be a lost bargain for them. However, if the books of a company have been maintained up-to-date by their outsourced accounting provider, it would take less time and thus less money for the company to have its tax prepared, as most of the records will be accurate and updated.
- More economical: In the long term, it is certainly more economical for a company to outsource its accounting process rather than managing it in-house. It is more expensive, time consuming and tiresome to spend countless hours doing invoices, recording transactions, filing taxes and reconciling transactions. Moreover, this may sometimes require the hiring of specialised resources, which would incur more expenses. Today, there are multiple specialised accounting service providers who offer all accounting services as a package, and these packages can also be easily customised to match specific business requirements. Cloud packages are more cost-efficient, thereby offering companies a more economical business solution.
- Peace of mind: Every business owner is entitled to peace of mind, and research says that business owners feel the most secure when their accounts are in the right hands. Outsourcing is the way to this much-needed peace of mind, leaving owners with ample time to focus on their core business. With outsourcing, owners do not have to worry about their books. Right from bookkeeping and payroll to financial reporting, the outsourced provider takes complete responsibility for the company’s accounting functions.
What could be better than receiving a fully updated financial report at the end of every month but without having to go through the hassles and complexities associated with reporting? Having accounting specialists create and review these reports and even discuss how they apply to the business, brings a lot of satisfaction to clients. Thus, outsourcing the accounting process frees up a lot of time and reduces the unwanted and constant worry business owners usually have on their shoulders.
To automate or to outsource? This is dependent purely on the business requirements and priorities of the company. However both have their own pros.