In today’s business world, outsourcing is a common practice that helps companies save time and money. One area that businesses often consider outsourcing is accounting. Outsourced accounting refers to hiring an external firm to perform common accounting processes such as accounts payable, accounts receivable, payroll and general accounting. While outsourcing accounting can be an effective solution for many companies, there are also many misconceptions surrounding this practice.
In this article, we will separate fact from fiction regarding outsourced accounting.
Myth #1: Accounting Outsourcing is Expensive
Many businesses believe outsourcing their accounting will cost them more than having an in-house accounting team. However, this is usually not the case. Outsouring firms have economies of scale and technology that allows them to offer their services at a lower cost than hiring an in-house accounting team. In addition, these firms have professionals with expertise and experience that know what best practice financial processes are which also enables them to provide services at a lower cost.
When you factor in the costs associated with hiring and training an in-house accounting team and the cost of the necessary software and equipment, outsourcing accounting is almost always a cost-effective solution for most companies. Additionally, it can free up resources for the company to invest in other areas, such as growth and expansion.
Myth #2: Outsourced Accounting Lacks Personalization
Some businesses believe outsourcing their accounting will result in a lack of personalization and attention. They fear that an outsourced accounting firm will not understand their unique business needs and will not provide the level of service they require.
However, this is not true. Outsourced accounting firms work closely with their clients to meet their needs. They get to know your business and tailor their services to meet your needs and requirements. They will also work closely with you to ensure that you understand your financial reports and have access to the information you need to make informed business decisions.
Outsourced accounting firms also have a dedicated team of professionals available to answer any questions or concerns, so you can be confident that you are receiving the highest service and attention.
Myth #3: Outsourcing your Accounting is Insecure
Businesses considering outsourcing their accounting may be concerned about the security of their financial information. They worry that their sensitive financial information could be at risk if it is outsourced to an external company.
However, accounting outsourcing firms take security seriously and employ the latest technologies to protect client information. They use encrypted data transfer methods and secure servers to ensure that client information is protected. They also follow strict security protocols to prevent unauthorized access to client data.
In addition, outsourcing firms often have a robust disaster recovery plan, which helps ensure that client data is safe and secure during a disaster. These measures are often more robust than a company’s internal security protocols.
Some people believe that accounting outsourcing companies are subject to different regulations than in-house accountants. However, this is not true. Companies like IQ BackOffice are subject to the same regulations and standards as in-house accountants. They must follow the same accounting principles and adhere to the exact reporting requirements.
Moreover, accounting outsourcing firms must also adhere to privacy laws. For example, the General Data Protection Regulation (GDPR) in Europe, is set up to protect client information.
They are also subject to regular audits and inspections to ensure they comply with the relevant regulations and standards. For example, many outsourced accounting firms have a SSAE18 certification which is far more rigorous than what an in-house department ever has.
The myth that outsourced accounting is unreliable is based on the belief that outsourced accountants are less dedicated or accountable than in-house accountants. This is not true. Outsourcing firms are staffed by highly skilled professionals who are dedicated to providing reliable and accurate financial information to their clients.
Accounting Outsourcing firms understand the importance of providing timely and accurate financial information to their clients, and they make it a priority. They are committed to delivering high-quality services and meeting the needs and expectations of their clients.
In addition, these firms have the resources and technology to ensure their work is accurate and up-to-date. They use state-of-the-art accounting software and systems to manage client data. They regularly review and update their processes to ensure they deliver the highest quality services.
Finally, these companies are subject to regular audits and inspections to ensure they comply with the relevant regulations and standards. This helps to ensure that their services are reliable and accurate.
Outsourced Accounting: FAQs
Not only is it a common practice, it is also an effective solution for many companies looking to optimize their back office.
Here are some of the advantages of using outsourced accounting:
Considering Outsourced Accounting? IQ BackOffice Can Help
Here at IQ BackOffice, we provide full service accounting outsourcing solutions for large and mid-sized enterprises leveraging our Enterprise Process Management cloud platform to automate and streamline end-to-end F&A processes for our clients efficiently and transparently. IQ BackOffice customizes our Accounting Outsourcing solutions, reengineering financial processes to take advantage of best practices and leverage state-of-the-art automation. This allows us to remove manual or inefficient steps, delivering improved controls and up to 70% cost savings for our clients.
We serve a range of diverse industries, including manufacturing and distribution, healthcare and dental, restaurant and hospitality, energy, retail, and technology. Our solutions enable companies around the globe to automate and streamline the complex financial processes they manage.
To find out more about how IQ BackOffice can reduce costs, track critical KPIs, and streamline your Accounts Payable function, get in touch with us.