2020 was an unpleasant year for U.S. companies, and the impacts of the pandemic will have long haul repercussions. Yelp Data suggests that by the end of 2020, 60% of business closures due to the pandemic were permanent, and a Facebook study estimates that 31% of small businesses in the U.S. were non-functional because of lockdown restrictions.
With organizations experiencing diminished cash flow and revenue, employees shifting to work from home, overseeing workforce needs through leaves and cutbacks. In 2021, numerous businesses are harnessing the advantages of accounting outsourcing services to navigate through the challenges successfully.
What does the survey say?
A joint survey conducted by CPA.com and Bill.com asked 1,700 experts who give out their work to client accounting services regarding how such services benefit them. The outcomes represented the capability of the groundbreaking effect of outsourcing services for organizations irrespective of their size that experienced business disruptions due to the COVID-19 pandemic:
A rise in profits: 28% report that guidance from their outsourced accountants led to increased profits.
Time savings: 80% of the respondents say that outsourced accounting services give them more opportunity to focus on their core operations.
Easier Accounting: 68% said carrying out suggested procedures from their outsourced accounting firm made their accounting simpler. Source
Considering these stats and facts, let’s explore more and discuss the revolutionary advantages of accounting outsourcing in detail:
Significant Advantages of Accounting Outsourcing for Businesses:
1. Get Absolute & Accurate Information for Tax Purposes
2021 is certainly not a year to miss out on tax credit opportunities, especially COVID-19 related tax credits. The FFCRA gives organizations tax reductions to cover specific expenses of giving workers required paid sick leave and extended family and clinical leave for reasons identified with COVID-19, from April 1, 2020, through December 31, 2020.
Besides this, strict regulatory investigation over tax disclosure, account balances, and closing cycles have pressured organizations to ensure high accuracy of their tax calculation. In the meanwhile, companies without a tax consultant are not leveraging all the available multiple tax deductions.
The entire process of crunching numbers to get your taxes precisely calculated and filed by April (or later, if you file for an extension) can cause stress. A partner firm for accounting services will ensure you get complete and correct financial information for your business tax return, enabling you to rest assured about the tax credits your business is qualified for.
2. Increase Financial Analytical Capabilities
As you’re hoping to gain more from your financial data and cope up with significant changes in the market, spreadsheets and manual data entry will not leave you time for that. On the other hand, if you have an external partner firm that handles your accounting and bookkeeping, you can ensure your financials are comprehensive and error-free. The service provider can also provide you with financial reports, allowing you to;
Have a 360 View of accounting information: monitor ongoing procurement, invoicing, and income all at once in one place.
Gain more control: systems that incorporate audit tracking and financial oversight to minimize mistakes and improve the accuracy of all accounting information.
Plan your finances and budgets: financial data from different functional aspects of the business gives insights for cash management, finance requirements, rebuilding, equity shares, etc.
3. Gain a Competitive Advantage with Ease
More than 90% of organizations worldwide are planning to adopt or have already adopted cloud technology for better management of accounting and financials. The shift to the cloud can result in companies enhancing their overall capabilities and responsiveness toward a downturn. Not only that, the cloud helps business owners manage financial data in real-time, from any location (using an internet connection) at any time.
Partnering with a reliable provider for online accounting services will help you unlock myriad opportunities cloud offers concerning accounting. Above all, cloud accounting technologies can help you speed up accounting functions, save costs, accelerate innovation, and gain a competitive advantage with ease.
4. Ensure Data Security & GDPR Compliance
Professional accounting outsourcing firms generally have qualified, skilled, and trained accountants who keep themselves updated about the latest accounting laws and compliance guidelines. Moreover, they do not allow access to a client’s data to employees not associated with the client’s project, ensuring the data remains secure and confidential. Thus, an outsourcing partner can play a crucial role in ensuring your business complies with GDPR.
Apart from that, reliable firms get NDAs (Non-Disclosure Agreements) signed by their accountants responsible for handling the accounting information. This ensures complete security of data, and in case of any breach or theft, they take legal action against the person held responsible.
5. Scale Both Accounting & Business Easily
Most accounting outsourcing companies offer flexible options, enabling you to scale accounting services without bearing any delay. Let’s take an example here. Suppose you have loads of accounting work that your in-house accountant is unable to handle; in this case, you can quickly get a few more accountants to work for you without stepping into the time-consuming and expensive recruitment. The best thing about such service providers is that they charge you on an hourly basis. This makes scaling-up or -down easier and smooth.
Besides, as a small business owner, when you outsource accounting services, you get more time to focus your energy and resources on building strategies for business growth. This can result in more networking, more business opportunities, and more revenue.
6. Move from Legacy to Modern Accounting Systems
Legacy accounting systems offer fewer options for flexibility and integration. On the other hand, modern accounting systems (software applications) can integrate with almost all third-party apps and tools. Moreover, the latest accounting systems can help save and reduce human errors as most tedious, and time-consuming tasks can be managed correctly using automation-powered systems.
If you still depend upon spreadsheets for accounting, you can save a lot of your time and resources by getting external experts’ assistance in utilizing accounting software like QuickBooks, Xero, Sage, NetSuite, etc.
Planning to outsource business accounting services?
Accounting To Taxes is one of the leading accounting outsourcing firms offering high-quality bookkeeping, accounting, and tax preparation services to CPAs, CPA firms, CFOs, and businesses across the globe. We have been providing effective and timely accounting and tax solutions to hundreds of our happy clients since 2008. To know more about our services in detail and learn how we can help you with business accounting, call us today at +1 646 688 2821 or send an email at [email protected].