Business have limited resources. Finance, time, and human capital all come at a premium. In our hyper competitive world, companies are operating on leaner budgets to reduce costs. It makes sense for businesses to direct available resources towards value creation and outsource all non-core activities – including finance and accounting functions.
Outsourced accounting solutions are now viable for all organisations. Advancements in financial automation and the proliferation of cloud-based computing means that large, medium and small organisations can benefit from outsourced accounting services without compromising on quality or racking up additional costs.
According to a recent survey, the global market for finance and accounting outsourcing is expected to grow by 6% CAGR from 2022 to 2026. We expect similar trends in South Africa as the benefits of outsourcing become better understood.
Here are some of the most significant advantages you can enjoy from outsourcing your accounting needs:
Outsourcing can actually lower your total costs by eliminating expenses related to employee benefits, training, accounting software & hardware, and administration costs. Insurance costs savings are potential secondary benefits that accrue to organisations.
You will also save money by avoiding costly financial mistakes. A reputable outsourced provider with the right control processes will save you money through application of higher degrees of accuracy and review.
In-House Accountants vs. Outsourced Accounting Cost
Comparison
| Staff Accountant | In-House Accountant | Outsourced Accountant | Annual Savings | Saving % |
|---|---|---|---|---|
| Annual Salary (CTC) - Annual | R391 200 | R240 000 | R151 200 | 39% |
| Bonus (13th Cheque) | R32 600 | None | R32 600 | 100% |
| TOTAL | R423 800 | R240 000 | R183800 | 43% |
Outsourced accounting enables you to get the specialised knowledge and skills that your company needs. Outsourced accounting and bookkeeping practices employ highly trained accountants with experience in multiple sectors and practical knowledge of best practices.
Most organisations have varying needs for a bookkeeper, accountant, controller, and a CFO. You certainly can’t hire all of these professionals. Outsourcing allows you to receive services as and when you need it.
Outsourcing eliminates the need to acquire extra hardware and software licences for your accounting needs. An outsourced accounting service provider has access to leading accounting software packages that meets your company’s financial reporting and data analyses needs.
Outsourced accounting experts can take over the burden of managing the financial operations internally. This also eliminates uncertainty around reconciliation, budgeting, payroll processing, and debt management, thereby giving you greater peace of mind.
Outsourcing these responsibilities to an external financial expert allows your team to focus on business goals, growth and managing the day-to-day operations.
Atleast 1 in 5 small businesses will have money stolen by an employee. It may be difficult to enforce effective checks and balances internally without ostracizing honest employees. Thankfully, outsourced accounting provides a solution.
When you hire an outsourced accounting service provider, you not only save money, time, and stress by having experts handle your financial reporting, you also have a third party to audit your money trail. You’ll decrease internal fraud risk by incorporating impartial financial controls standards.
Outsourcing reduces the need for large investments in human resources, technology, and infrastructure. This improves your ability to scale and react quickly to change. For example, outsourcing improves an organisation’s ability to manage periodic surges in activity, such as seasonal cycles or temporary production spikes.
Rather than redirecting internal resources that are too busy or too and slow to react, companies can mobilise outsourced providers to process the additional transactional activity.
Today’s cloud-based accounting applications allows you to access financial data and records online, giving you up-to-date access to information such as cash balances, at any time, and from anywhere.
With timely, accurate reporting at your fingertips, you have total visibility of the financial health of your business allowing you to make more confident and informed decisions.
Competent accounting firms are adept at interpreting accounting information, tracking your core metrics, pointing out areas of concern, and recommending corrective actions garnered from business intelligence.
It is one thing to record and report the numbers – understanding why these number looks a certain way, identifying trends and matters requiring management attention is what really drives businesses to higher levels of profitability.
So, when should a company outsource their accounting? There really isn’t a bad time to consider outsourcing. Whether you’re a start-ups, small and mid-size business, the benefits of outsourcing are available to your organisation. The bottom line: the sooner you start outsourcing, the sooner you can realize the many benefits and get ahead of your competitors.
Learn more about how Apeiron Accounting can simplify your environment and give you the freedom to grow your business!
At Apeiron, we get accounting and bookkeeping done right. With our cloud-based accounting solutions and expert teams, we provide an all-in-one financial toolkit your business can count on.
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