Best Business Services

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On the Fence Accounting Services To Take or
Not To Take

• Some benefits and potential risks of accounting
  services that may benefit those who are at the
  fence or have already decided whether or not to
  go for accounting services.

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While outsourcing of HR and legal functions may
not raise eyebrows, accounts outsourcing is
surely a sensitive issue.

• But are accounting services really risky? Do
  their disadvantages outweigh their benefits and
  vice versa?

• Most companies are nervous to share insider
  information on their financial details and thus
  wince at the thought of taking accounting
  services.

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A definitive answer to these questions isnt
possible because it all depends on the kind of
service provider, the relationship with the
client, contractual issues and ethical
considerations.

• What we tackle here are some benefits and
  potential risks of accounting services that may
  benefit those who are at the fence or have
  already decided whether or not to go for
  accounting services.

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The Need
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Most often, companies need some form of
accounting aid, especially if they are startups
or small scale enterprises.

• Thats because devoting their entire machinery
  (they have a small workforce and few resources to
  start with) to matters such as accounts is not an
  option.
• And neither can they set up or maintain a
  separate division for accounting.
• Therefore, outsourcing their accounting services
  gives them one less non-core internal function to
  worry about.

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The Benefits
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Steven M. Braggs, author of popular books such as
Accounting Best Practices and Bookkeeping
Essentials argues that most accounting functions
such as payroll and transaction processing are
subject to automation and therefore are
nonstrategic.

• Because they are of no importance to the
  strategic direction of a company, these functions
  should be outsourced so the company can focus on
  important strategic tasks that directly influence
  its position and profitability in the marketplace.

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1. Going light on the pocket

• Taking accounting services from other providers
  alleviates the need to train or hire trained
  workforce.

• By outsourcing all or some bookkeeping tasks,
  companies surprisingly save up on costs.
• They save on manpower requirements and
  infrastructure such as office space, hardware,
  and software.

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Whats more, the expertise and knowledge of
financial professionals helps you find tax
deductions, avoid late fees and other such
financial liabilities that could have been missed
by you or your in-house staff.
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2. Chipping off more time

• Taking accounting services helps you and your
  staff save up on time.
• Rather than spending hours managing books, youll
  have more time to focus on the strategic goals of
  the business.
• Moreover, you will also escape other tasks such
  as hiring, recruiting and overseeing the work of
  the accounts staff.

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3. More staffing control

• In the case of small businesses, one worker may
  double up as an accountant and an executive or a
  customer support officer or what not!
• Sometimes, businesses need more workers and
  sometimes they need to lay off workers.

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4. Higher competency and expertise

• Theres no doubt that third party service
  providers have more competency and expertise in
  the work they do.
• Moreover, to keep up with the competition, they
  update their skills constantly.
• That implies that by taking their services, you
  are bound to get good quality work and better
  expertise than what you could expect from your
  in-house personnel.

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These service providers take the work more
responsibly.

• So, you are guaranteed with better workers for
  whatever service you are seeking.

• Accounting service providers hire their employees
  after extensive screening.

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5. Minimizing downtime and maximizing business
growth

• Taking accounting services for auditing and
  bookkeeping helps in avoiding nonproductive
  downtime.
• Letting professionals handle these tasks ensures
  that business owners have more resources at hand
  to work on the core functions and growth of the
  business.

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The Risks
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The financial and confidential nature of company
accounts make it only logical to assume that
sharing such information is risky.

• However, making smart choices with regard to
  service providers and contractual agreements
  ensures you are insulated from risks.

• And for sure it is.

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1. Trust and security issues

• By taking accounting services, you are required
  to share insider information on valuable aspects
  of your finances.
• This kind of data is sensitive.
• Even if the service provider is trustworthy,
  other parties may sometimes be inclined to hack
  into such data.

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2. Lesser managerial control

• Outsourcing accounting functions to other service
  providers and contractors gives you lesser
  control over those aspects of your business.
• Moreover, as the services are provided by other
  personnel outside the company, there is lesser
  managerial control over them.

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3. Increased dependence on others

• Another disadvantage of taking accounting
  services is that after a point of time, you may
  become so dependent on third parties that it may
  be difficult to withdraw later on.

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The Ultimate Question To Take or Not To Take
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Taking accounting services has both pros and
cons.

• Choose the firm wisely and make sure the
  contractual agreements signed are clear to you.

• While the advantages outweigh the risks, it is
  always a good idea to be careful.

Because of the sensitivity of financial data,
such service providers have sufficient security
protocols in place and hijacking by other parties
may not be much of a risk.
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With the right approach, business functions
outsourcing could spell tremendous growth for
your business.
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Centre for Innovation and EntrepreneurshipC-4,
IIT-H Foundation, Gachibowli, Hyderabad961840275
1, 9000600247

• Reach us atprabha_at_accuprosys.com
  simplify_at_accuprosys.com anuradha_at_accuprosys.com 
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