Maintaining a record of financial transactions is vital for every company. It helps in planning your growth, quantifying your achievements, calculating taxes and if you are a public company it is in fact mandatory to publish your financial statements. Given this importance, many companies prefer to invest in a financial division within their own company for bookkeeping, accounting and tax purposes. If you are a small or medium business, or for that matter even a larger organization, you could look at outsourcing these functions to professional outsourcing firms specializing in these domains. There are several benefits for outsourcing that you can exploit to streamline your financials and grow faster.
Bookkeeping Services: Bookkeeping related to maintaining the day-to-day transactions of the company. Typical bookkeeping functions include recording your income and expenses, documenting the assets and liabilities, maintaining daily ledgers, journals that have debit and credit transactions and other details like bank accounts, credit card statements, etc. This is a good function that can be outsourced in a profitable manner.
The outsourcing firms employ experienced professional that can maintain these records in proper manner and incorporate the latest industry best practices, giving you the best services without the associated overheads.
Accounting Services: Accounting services typically are means of summarizing your company’s monthly, quarterly, half yearly or annual performances into reports and statements prepared based on specified guidelines. These include Profit and Loss Statements, cash flow, balance sheets, financial analysis, etc. This, too, is another function that can be outsourced to professional firms with good expertise in this domain.
The biggest advantage of outsourcing such activities is the professional advice that you get on issues in your statements or some financial concern. Besides, they would also use the latest technological solutions available in the market for your accounting purposes which may be unfeasible for an individual company like yours.
Tax Preparation: Filing your taxes properly and paying them on time has obvious benefits. Irrespective of whether you are a sole trading company or one with employees and partners, the tax preparation functions are extremely important. Doing it individually or through some inexperienced person could be very risky. Unfortunately, employing a full-time professional could turn out to be too expensive. The best option in such cases is to outsource such functions.
Outsourcing ensures that your taxes get prepared in a flawless manner and you can pay your taxes on time. If you are punctual in paying your taxes you can save on the legal hassles and expenses of delayed or incorrect payment. Besides, you can also claim proper tax breaks on your expenses properly if your returns are prepared by a professional.
Thus it is clear that outsourcing the finance division activities to professional firms can be a very effective and efficient alternative. You can avoid the issues with hiring professional employees, handling attrition, spending on latest solutions and software, and most importantly bring down or even transfer the risks of incorrect records, tax filing and payments.