Most of the businesses are a result of someone’s dream, passion. Converting the idea into business as soon as possible is crucial for entrepreneurs. Spending hours in calculating potential expenditures or creating a plan for handling account receivable, managing cash flow are aspects that are given the least importance in most cases.
Perhaps, that’s why more than 50 percent of businesses fail during the initial stage as their math lacks visibility. Accurate bookkeeping from day one can offer crucial support to the company.
Bookkeeping involves keeping track of the organization’s financial transactions. It includes billing for products/services, recording receipts, verifying invoices from suppliers and making payments, paying taxes, tracking accounts receivable, and generating financial reports. Put simply; bookkeeping procedures help business owners with real-time visibility of the organization’s financials. The clarity in numbers can help entrepreneurs and investors in making informed strategic decisions.
These processes can be performed with the help of software solutions. However, human supervision and expertise remain crucial. Basic knowledge of financial accounting is also necessary to work on most software.
Why should firms consider outsourcing bookkeeping functions to an accounting outsourcing company?
Entrepreneur’s time is valuable and needs to be spent towards developing, shaping the product rather than focusing on math.
Most of the businesses start operations with limited resources and capital. Thus, hiring in-house staff for managing bookkeeping activities may not prove to be affordable. This is where Indian firms that provide virtual accounting services come into the picture. Here’re some crucial benefits of outsourcing bookkeeping activities to such firms.
- Helps in improving organizational efficiency
Business objectives and growth can be achieved as planned if accounting and bookkeeping tasks are outsourced to professionals.
Virtual bookkeepers help set up a workflow for crucial tasks like invoicing, setting payment reminders, and highlighting bill payment defaulters. They help ensure proper cash flow so that the organization does not need to borrow funds from outside.
Outsourcing ensures the in-house team can continue focusing on core areas of expertise rather than worrying about cash in-flow and outflow. Resources can be focused on customer service and CX activities.
- Accuracy and risk management
Startups often believe in operating with a minimum number of team members. Business owners think they can manage everything on their own. That’s where the problem starts.
Hiring freshers coming out of the college and letting them experiment on the company’s books may not be a good idea. Small startups surviving on initial rounds of funds cannot afford to let anyone play with their money. Compared to a trained bookkeeper, inexperienced persons spend almost double or triple the amount of time creating records. Their work also lacks accuracy. In bookkeeping, errors can result in legal consequences due to under-claiming or over-claiming GST, VAT, and other taxes. Incorrect filing may result in cash flow problems and penalties.
Besides tax authorities, even investors appreciate firms that have accurate financial data in their books. Problems in records can create doubt in the mind of auditors working for angel investors.
On the other hand, outsourcing these tasks to professional firms can help ensure all the records are error-free. Professionals working at firms that provide accounting outsourcing services also use and recommend the best possible software solutions suitable for the business.
Business owners can also feel-free to discuss discrepancies in transactions and get suggestions. VA firms assign a dedicated accounts manager to each client, and the person remains accessible at all times.
- The scalability factor
Chartered accountants and financial analysts remain just a call away. You can always have professional accountants, bookkeepers, and consultants at your disposal, without paying salaries, payroll taxes, or incurring training costs.
Outsourced bookkeeping service providers can easily scale-up or down the resources allotted for your business, depending on your needs. So, you won’t have to bother about resizing your workforce during seasonal highs and lows.
- Data privacy and security
Business owners, especially those behind startups, wish to keep their day-to-day operations a secret. They are often unwilling to hire an in-house accountant unless they receive their patents, and the minimum viable product is ready for the market. Such firms can completely trust virtual bookkeepers based in India as they remain under contractual obligation to keep all the information private and completely secure.
Data is handled and stored in cloud-based highly-secure servers. The information remains accessible to persons with unique security credentials and a secure internet connection.
- Won’t have to face the risk of losing staff
The COVID-19 pandemic and associated lockdowns have forced several companies to either keep their offices shut or let their employees work-from-home.
The existing staff’s inability to continue with their work resulted in operational challenges. Smaller enterprises cannot afford buffer staff, and they found it challenging to arrange an alternative.
Fortunately, firms had the option to outsource accounting services to KPOs based in India. Outsourcing accounting firms came to the rescue during the last four months. Such virtual accountancy firms have offices and well-trained staff in multiple countries for ensuring business continuity. They ensure there’s no backlog in bookkeeping.
Put simply, firms from around the world choose virtual bookkeeping service providers in Indian due to flexible pricing options, access to a skilled workforce, and outsourcing friendly policies.