Several companies outsource HR, IT, and customer service to third-party firms. Now, small and medium enterprises are significantly benefiting by outsourcing accounting to virtual accounting firms. Here are some of the most common reasons behind the decision to outsource the work.
The math can affect your company’s valuation
A firm’s value is determined based on several factors, including financial leverage, future performance analysis, and cash flow. Accounting valuation (assets and liabilities) also plays a crucial role in the firm’s ability to seek funds and sell assets.
The accounts analyst responsible for appraising the company’s value will look at the earnings history, future growth prospects, and historical income trends in the financial records. The math can devalue or upraise the company’s valuation. And this is where accuracy and professionalism in financial records come into the picture. The valuation of a firm and business can be negatively impacted due to inefficient or outdated financial documentation procedures.
On the other hand, accurate accounting and financial records promote transparency and help in making crucial decisions. Such data tells the success story and highlights weaknesses at the same time. Current and prospective investors can evaluate the need for reinvestment and anticipate the upcoming impact on the cash flow.
Access to advanced software solutions
SMEs often lack access to the latest accounting and finance software solutions. They may not be in a position to invest in newer technologies and lack the expertise to choose and implement the same. Thus, several companies still rely on old-school manual accounting methods.
Accounting service providers invest in technology and modernize their systems from time to time. All their clients get access to these software solutions without worrying about spending funds on purchasing or maintenance, upgradation. Tasks such as matching payments to invoices, bank reconciliations, risk assessment, analytics calculations, and expense claim audits can be automated with such cloud-based systems.
Highly skilled and experienced professionals remain at your service
Virtual accounting companies have multiple teams of experienced professionals to track your organization’s health and provide consulting support anytime.
Outsourcing enterprises also provide access to cloud-based software with enhanced functioning to their clients. So, several types of statements and financial reports can be generated within minutes from any location worldwide. You can make swift business decisions and surge ahead of the competition.
Your business’s financial health remains on track because virtual accountants offer a rare combination of industry experience and best practices. Records remain up-to-date, and you won’t have to spend hours or worry about financial books during auditing.
No matter if it is tax filing, compliance, and regulation, bank reconciliations, or accounting MIS, the team of professionals working at virtual accounting firms has extensive knowledge.
Streamlined systems and processes combined with highly experienced professionals for supervision ensure high finance accounting and operations accuracy.
Ensuring compliance with regulations is crucial
Every organization’s finance department focuses on bookkeeping, financial planning, managing controller service, and data analysis. The maintenance of books needs to comply with state and federal policies, regulations. Virtual accounting companies assign a dedicated manager to every client. The person ensures all the services provided comply with applicable laws.
If a company wants to scale, its accounts department needs to be capable enough to meet the expansion demands. In most organizations, the accounts and finance team is overburdened due to tedious, manual tasks. They do not have the necessary time and energy to develop their skills. For such companies, outsourcing accounting and bookkeeping functions has proved to be a lifesaving decision. They can achieve success by maintaining financial stability and scalability.
Cover-up the lack of expertise
The growth and success of any organization depend on the accounting function and finance. Besides financial control, good formal policies, support, documentation and records, and data processing protocols need to be in place.
Unfortunately, several companies, especially fast-growing firms, lack the expertise leadership and human resource in their finance and accounting departments. The absence of adequate staff and outdated systems put the organization’s valuation at risk. A trustworthy accounting outsourcing company can help such firms to fill the gaps. Such virtual accounting partners provide accounting services like maintaining accounts, managing returns and statutory dues, maintaining tax compliance, resolving queries raised by auditors, managing employee expenses reports, and handling accounting for fixed assets. Clients can also seek assistance for generating MIS reports like profit-loss statements, receivables and payable and generating balance sheets.
No need to worry about budget constraints
Firms are often forced to save operational costs in areas that are not the core of their business. Outsourcing the work to a service provider helps free up resources, saving funds, and this indirectly results in an improved ability for focusing on core competencies. Firms that provide outsourced accounting services can also develop a suitable package consisting of services that the organization requires.