Finance plays a crucial role in every business, be it a startup or a multi-million dollar corporation. Nobody, especially entrepreneurs wants to face the nightmares of a financial crisis.
Over the past few decades, the role of accountants has grown. Especially in countries like Australia; where the accounting industry faces critical skill shortages and the ability to draw levels to the market trends.
This is where accounting outsourcing comes in!
Accounting and bookkeeping services help handle day-to-day business operations like employees - giving you and your business time to breathe and focus on what's necessary.
So, let's dive into this blog to learn more about the hows and whys of accounting outsourcing in Australia.
Why Businesses in Australia Should Outsource Their Accounting Services?
The two most crucial elements of running a successful business are - reducing costs and enhancing efficiency. For most large organizations, outsourcing helps them tick these two boxes.
1. Company’s Growth:
Accounting and bookkeeping services help businesses focus on what's important. By working with accounting consultants and services, you can redefine your role and keep your business running smoothly.
According to a report by Research And Markets, the global accounting services market is predicted to reach $735.94 billion in 2025 at a compound annual growth rate (CAGR) of 6%.
So, as a business owner, you can now focus more on your business and clients. Thus, outsourcing services will help you manage payables or receivables and maintain records.
2. Keeping Tabs on Accounting:
Keeping track of how well your business is doing is of utmost importance. You might not be available 24/7 and 365 days to check or create accurate financing reports. Of course, an in-house accounting team can help, but it can be expensive for a company.
This is when accounting and bookkeeping services professionally help you with your finances. They will regularly update you on your financial operations and help you analyze market trends.
Accounting Outsourcing for Australian businesses can be a game-changer. So, let's discover the key benefits that help you save time and money while enhancing your financial management.
Key Advantages of Outsourcing Accounting Services in Australia
The benefits of outsourcing accounting services or hiring an accounting consultant are endless. According to AFR, companies in Australia are paying 25-50% less per employee by outsourcing accounting services offshore.
Here are the top five benefits of accounting outsourcing:
- Cost Efficiency
Outsourcing accounting services is highly cost-effective for businesses.
Save Time and Money: Skilled professionals help you save time and money. You can delegate them the repetitive processes of tax returns, bookkeeping, or verifying compliance documents and certificates.
Discretionary Expenses: When you hire a full-time employee for accounting, you will need to spend on salary, tax, office equipment, and more.
Fixed Rate and Hours: For an outsourced accounting company, you only need to pay for their accounting services or accounting consultations. Moreover, they often operate on an hourly rate or a fixed fee.
Overall, your business gets better control over your budget when accounting outsourcing in Australia.
2. Focus on the Main Business
As discussed above, accounting outsourcing allows you and your business to concentrate on core activities and make strategic goal plans.
The management team can direct their vision toward business development, customer service, client interactions, and overall operations.
You can create a solid roadmap for your company’s financial growth when you let your employees do what they do best and outsource the rest.
3. Specialized Skillset and Expertise
Managing accounting processes can be a task. Even with the latest tools and technology at your disposal, you need an expert to run the accounting team and manage the clunky process.
You can easily navigate your accounting process with the right support and expert assistance. Moreover, your in-house accounting team can be expensive.
So don't let accounting become a burden - get the help you need to streamline your operations and achieve success.
4. Flexibility and Scalability
Companies may scale up or experience a dip in business activities, especially if it’s a seasonal business or has fluctuating workloads.
If your company scales, every department grows, particularly accounting. Your payables and receivables reach numbers that you may have never handled before. By default, you will need to hire more employees.
On the other hand, if your company experiences a sudden plunge in your business activity, you might need to scale down your employees to manage finances.
To manage a company single-handedly can be overwhelming. Juggling between employees, finances, and company security requires much effort.
If you outsource, a sudden scale-up or down won't be an issue, as accounting outsourcing companies can manage the accounts depending on the current needs.
5. Risk Management and Compliance
There is no denying the fact that fraud may occur. Your business and finances are always at risk. Even in-house accounting departments are not immune to internal fraud.
However, accounting outsourcing services can significantly reduce the risk of security breaches, data theft, and other fraudulent activities.
Accounting Regulations: Accounting outsourcing companies are well-versed in local and international accounting regulations. So, you can rest assured that your company is in safe hands when outsourcing.
Error Risks: The local and international accounting regulations help reduce the risk of errors or non-compliance penalties for businesses.
Market Reputation: The outsourcing agencies will not do anything that would hamper its reputation in the market.
Things to Consider Before Outsourcing
Every coin has two sides. While accounting outsourcing can offer several benefits, it’s always best to consider potential drawbacks. So before you dive in, consider these four points.
1. Data Security and Privacy
Do not forget that you are sharing all of your and your client's sensitive financial information, like bank account details, transactions, and more, with a third party.
Ensure that the accounting outsourcing company you hire meets all security standards and requirements. It would help if you kept a tab on data breaches, privacy and security, and the risk of unthaurized access.
Tip: Before hiring an accounting company, understand how their team will work on security compliance. You can ask them what measures they will take to prevent security breaches.
Quality over quantity. You are giving the most crucial part, i.e., handling your business's finances, to a third party to handle. So, never compromise on the quality of accounting and bookkeeping services for your business.
Of course, outsourcing companies provide experienced and professional experts. However, knowing their qualifications and experiences is never a loss.
Tip: Choose an accounting outsourcing company that has hands-on experience with the services that your company needs. Do your research before you start working with one.
Communication is the key to any business. A two-way communication between you and the company you hired is pivotal.
You may experience differences in time zones or language barriers, hindering the overall process. So, it's always a good option to have clarity about everything and anything via communication.
Tip: You can use well-trusted communication channels like emails or other third-party apps. Schedule regular meetings to keep track of work and receive updates on assigned tasks also helps create good communication.
4. Cost Transparency
While accounting outsourcing can be cost-effective, there can always be hidden costs.
The hidden charges for providing accounting services may include additional fees for extra services or charges for hiring more accountants. These hidden charges might not be discussed or neglected when signing a contract.
Tip: Always read the contract thoroughly before signing it. Remember not to skip pages and pay close attention to the hidden clauses.
Accounting outsourcing services have now become a necessity in the ever-evolving business landscape. Companies providing Outsourced accounting services can be a game-changer in enhancing your financial management.
If you need one, we at Augmented Systems provide accounting outsourcing in Australia. You can find a trusted partner in us, as we provide quality work securely and efficiently.
Many Australian companies trust us with their accounting needs. So, be the 'pathbreaker' for your company and contact us for services, including payroll, bookkeeping, taxation, and much more.