Business is composed of a set of interrelated system that will ensure the smooth flow of business process and convert capital to revenue efficiently. It is important for a business owner to consider each component as if it is just the existing system inside the process. Thus, utmost importance and consideration must be given to each process component, which includes the accounting process.
The need for a smooth flow of the accounting process is the reason why entrepreneurs have tax lawyers, public accountants and financial managers as members of their business team. Now before I go into the intricacies of accounting outsourcing; let me give a brief overview of what accounting process entails.
What is Accounting Process of a Business?
The accounting process of a business is the measurement and the disclosure of essential financial information that will help public accountants, financial managers, tax authorities, investors, and other decision-makers to effectively allocate their financial resources to each business process, thus maximizing the conversion of a business’ working capital to huge revenues.
Small business accounting involves processes in which important financial information of a particular business is recorded, summarized, evaluated, and interpreted. Furthermore, since money is one of the biggest factors that may affect the existence of a business in a certain market, accounting is given utmost attention and consideration at all times.
In accounting alone, there are several aspects that a business owner must consider and some of these aspects include cost accounting, the cash-basis accounting, financial accounting, internal fund accounting, management accounting, project accounting, and others.
In other words, accounting is a serious and critical matter that must be handled by a group of people (members of your business management team) who have the technical expertise in dealing with the accounting as well as financial issues. Realizing this reality, more and more business organizations hand the accounting aspects of their business process to third-party organizations, or most commonly known as accounting outsourcing firms.
What is Accounting Outsourcing and what is its Relevance to Small Business Owners
Accounting outsourcing is considered to be one of the more effective management tool, thus many companies often incorporate outsourcing as one of their strategies in business planning. As a matter of fact, the Outsourcing Institute reported that the concept of a CRO (Chief Resource Officer), a professional outsourcing executive manager is widely-acceptable in larger corporate organization.
However, you do not have to be a large corporation to benefit from accounting outsourcing. Even small and medium-sized enterprises can provide better service and produce high-quality products in a more cost-efficient way if they will outsource their non-core business processes, including the accounting aspect.
By decreasing the demands on your administrative personnel, you will be able to free them from additional responsibilities and they will be able to support areas that directly affect your sales, clients and the marketing task of your business.
Accounting outsourcing firms can execute your accounting and bookkeeping tasks in all frequencies (monthly, quarterly, and annually) or can supplement your present administrative staff to lessen the responsibility. Here is a summary of the business services you can acquire from outsourcing your company’s accounting process:
Business Services Offered by Accounting Outsourcing Companies
Preparing cash disbursement checks
Preparing input credits and bank deposits
Preparing company payroll
Preparing tax deposits and bank reconciliation
Preparing financial statements
Preparing payroll tax returns
Evaluation and review of financial results on different frequencies
Now if your small business performs any of the tasks listed above; then outsourcing your entire accounting process will be the best option for you. With accounting outsourcing, you will be able to see the benefits of having a cost-efficient business operation.
With your accounting process in the hands of outsourcing professionals, you can focus to the core of your business and convert every cent of your working capital into hundreds to thousands of dollars in generated revenues and profits.