Small and Medium Enterprises can have a variety of reasons to go for offshore accounting and bookkeeping outsourcing services. But, SMEs still choose not to opt for these services. There are several reasons that lead to a hindrance in the path of these small and medium enterprises and keep them away from availing the benefits of outsourcing. One of the deciding factors in the above is the capital structure owned by the SMEs. Through various research, it has been found that a firm, be it large or small, can possess any capital structure and it is difficult to determine the firm value. A firm can go internal financing or external financing. Also, firms that possess long-term debts are also at a lower financial risk than others. Because long-term debt is concerned with relationships of the firm in the long-run, the effects of financial risk are lowered.
Business Practices Prevailing in Small and Medium Enterprises:
The business practices that generally prevail in SMEs are owner-manager driven. Most SMEs are organizations run and managed by the owners themselves. One of the implications of this approach is the informal behaviour of SMEs and informal conduct of business practices in SMEs across various functions. SMEs tend to have a flat hierarchical structure and people easily switch departments. It is very common to observe an employee of department also rendering the tasks of department B, in SMEs. The practice of continually switching departments leads to the tasks not being accomplished with as much expertise as was required. As a consequence, SMEs face a backlash.
Practices followed by Accounting Departments:
Talking about the accounting departments and accounting firms in UK and the business practices carried by them, the firms in UK function across various industries. Accounting firms in UK, especially in London, are naturally, geographically, and economically important from a strategic point of view. Such practice raises the valuation of the accounting outsourcing firms in UK. Unlike SMEs, the accounting firms recruit employees trained in specific domains and deliver the tasks as per the timeline and quality demanded. The big difference in business practices thus laid down by firms in SMEs and firms in accounting departments is the chain of command and expertise level.
Services that Have the Probability of being Outsourced by Small and Medium Enterprises:
Bookkeeping refers to the documentation of a company’s financial statements including ledgers, profit and loss statement, cash flows statement, etc. Bookkeeping differs from traditional accounting in that it deals with data entry and creation of invoices whereas accounting deals with business planning, taxes, to aid in the creation of financial statements. Firms like SMEs can choose to go for bookkeeping outsourcing and accounting services for several reasons. SMEs can also opt for payroll outsourcing services which makes the job of the employees in SMEs even easier. Payroll outsourcing is a business practice where companies transpose their payroll administration to an external third-party. The contacted party can aid in monthly processing payroll, withholding taxes, preparing returns to government agencies, etc.
Benefits of Outsourcing Various Services:
It is extremely important for businesses to acclimatize themselves to increasing requirements of obligations. Often the in-house administration is unequipped with the required knowledge because of which the departments like HR feel overloaded and the business faces certain shortcomings. These might include delays in making payments to the employees, incurring fines due to compliance issues, etc. Consequently, companies rely on outsourcing which gives them security against a risky administration process. Outsourcing helps in increasing the efficiency of the overall business by handing over the job to experienced and expert payroll providers and is becoming a viable option for many business organizations by replacing in-house processing of payroll.
Outsourcing of Bookkeeping Services:
After having discussed the business practices conducted in each kind of organization, we realize that SMEs have a way of functioning which stops them from changing and adapting to a new technique of operations. SMEs have the scope of outsourcing its various processes (discussed ahead) to the accounting firms. These firms promise timely delivery of tasks. Also, in the world of complexities, organizations are constantly faced with compliance issues. Due to a flat structure and swapping of departments, SMEs face constant backlash. Thus, SMEs should choose to go for outsourcing which will help them in saving both time and resources.
Offshore Accounting Services- An Overview
Accounting services for small businesses have become their own much-awaited saviour as these services provide many advantages to small-sized businesses. Mostly, small businesses do not have the adequate resources to meet the requirements of tax regulation authorities. Accounting companies will provide expert teams in accounting to suit your business needs to make it grow. You can thus concentrate on the core issues of your business and save the wastage of time and energy by bookkeeping outsourcing. Accountants are required to be flexible to adapt to the needs of the businesses. Depending on the needs and size of your company, you can hire these accountants on full-time or part-time basis
Benefits of Offshore Accounting Services:
There are a wide variety of advantages if a firm decided to outsources its services of bookkeeping and accounting.
- A versatile bookkeeper can help your company in fulfilment of tax obligations, and provide financial analysis
- Bookkeeping services from home have become common among bookkeeping. They can work at their convenience to provide you easy business solutions
- Bookkeeping can help in adhering to obligations and avoid compliance issues
- It reduces the entire toil of maintaining all the records and provides benefits of outsourcing
- It saves the essential time and money spent to get the work done by your own employees who might lack the expertise in the domain of bookkeeping
Overall, the employees can focus on one kind of work and devote their 100 percent to a particular task.
With business growing, more and more people are to be hired such as marketer, sales representative, receptionist, bookkeeper, and even janitor. There comes a point when an accountant realises the importance and need of accounting outsourcing. Like every aspect has its own pros and cons. The bookkeeping outsourcing services also has its own pros and cons. There are various reasons due to which the accountants in UK SMEs are not preferring bookkeeping outsourcing and not realising the benefits of outsourcing.
Major concerns of accountants
Quality is a major issue and it will always be. No matter accountants can outsource their bookkeeping services but still, they are held responsible for the quality. It is even more difficult to control quality when offshore accounting is used. In fact, in some cases, it becomes very difficult to check the work of an outside accounting outsourcing service provider than to handle the tasks in your own location. If sub-par accounting work is done by offshore accounting firms, then your performance suffers as well as the huge trust organisations have in their accountants also suffers. The customers would blame the accountants and as a result, the business of the organisation would suffer. Here is the point where the blame game starts.
Another concern with accountants regarding offshore accounting services is to maintain confidentiality of their business. Client confidentiality is must for every business and this is something bookkeeping outsourcing services should offer. There can be many possible reasons for this worry among accountants as the information is stored electronically with the offshore accounting firms and there is always a risk of the information getting hacked. The offshore accounting firm must have a solid IT security strategy. Non-disclosure agreement can also be used as a certainty that the information of the client would be safe. Some offshore accounting firms are not able to meet this standard. Small and medium enterprises have an advantage over large business houses that they can make changes to their strategic plans quickly as compared to the large organisations. Outsourcing accounting services can slow down these reforms. In-house changes are often faster because the control rests in your own hands at that time. Offshore accounting services are a matter of great preciseness and if any negligence is done on the part of the bookkeeping outsourcing service provider then it is going to negatively impact the brand of the organisation. Offshore accounting is a sensitive area as it deals with a large amount of financial information and sometimes any negligence on the part of accounting outsourcing service providers can prove to be a legal hassle for the company. The IRS charges penalties and interest, apart from taxes if the books contain errors. All these perspectives have to be taken care of by an accountant before outsourcing bookkeeping services.
Resolving the issues of SME accountants
Bookkeeping outsourcing service providers employ streamlined processes for quick and efficient services. These service providers deliver only the best quality services and accountants at SMEs need not worry about the quality of the work being performed. The offshore accounting service provider firms run on easily scalable outsourcing models. In case the SMEs also want to undergo some change in their business operations then the bookkeeping accounting service providers can help in the same as they have the required resources and bandwidth for the same. These days offshore accounting service providers are offering the required security policies in place. Proper confidentiality agreements are signed with the clients by bookkeeping outsourcing services provider to ensure that their critical financial information is in safe hands. So, accountants can now enjoy uncompromised data security and privacy. Accountants can benefit in many ways by offshore accounting as they not only get the best accounting services but also other financial services are also being offered like payroll processing, bookkeeping, tax preparation, financial reporting, etc.
Outbooks.co.uk offer offshore accounting services in the United Kingdom and accountants can take the advantage of their bookkeeping outsourcing services as now the organisation would be able to take care of their core business areas. In the long run, businesses also have to focus on expansion and diversification and as a result, huge records are required to be prepared and dealt with. Outbooks would ease the accountant’s problem of handling large number of records efficiently. The problem of managing investors, clients, and finances of a business in a timely and economic manner is resolved and it ultimately leads to increased business productivity. Every business has its own objectives that makes the needs of every business diverse. Offshoring accounting services can provide you expert assistance that would help your business reach new heights. Accountants these days have to work with the dynamic technology. New features and improvements are added on a regular basis so that no financial issue of the business enterprise remains unresolved. Enjoy cost with quality by utilising bookkeeping outsourcing services.
A few decades ago business didn’t have the advantage of modern technology like email, internet, mobile marketing, telecommuting or smartphones. With the rise of technology, operations of companies of all sizes have improved that has, in turn, helped turn small businesses to grow into global businesses. Outbooks.co.uk is one such outcome of technology that has a distinctive expertise in providing ways to improve productivity in an organization. Bookkeeping and accounting service providers continuously improve their skills and qualifications to stay competitive in the market because the environment we are living in is highly dynamic, so accountants can be confident that they are handing over their accounting to a reliable and knowledgeable person. Offshore accounting helps you to hire a professional who is an expert and is quite skilled in offering you quality services and that too at an affordable price. The bookkeeping outsourcing services provider with whom you want to work should be flexible enough to use the latest accounting software, that will be compatible with the work that you require for your SME. The offshore accounting service provider must be flexible and desirous enough to match the needs and requirements of accountants. Keeping the above factors in mind, the SME accountants are highly advised to go for outsourcing as besides reducing the cost and time outsourcing bookkeeping services could reap loads of benefits for the enterprise in future.