Accounting outsourcing is the transfer of accounting functions to a company that professionally provides services in the field of accounting, including payroll calculations, tax reporting, and processing of payment documentation.
Types of accounting outsourcing
Full-service outsourcing
In this case, the outsourcing company completely manages the enterprise's accounting: calculating salaries, generating reports, preparing payment documents. Unistaff Global Services provides this type of comprehensive accounting outsourcing. Additionally, the client can request legal support, electronic document management implementation, and other services.
Selective outsourcing
The enterprise retains some accounting functions, while the management fully oversees the work. Processes are only partially transferred to an external outsourcing company. These might include processing of primary documentation, payroll calculation, and report preparation. This option prevents staff inflation and saves on the implementation of technological solutions.
Advisory outsourcing
An experienced external professional supervises the accounting staff's work and tackles the most complex tasks, such as unlocking accounts and establishing business processes with foreign partners of the enterprise. In most cases, the goal of such outsourced accounting is to consult with professionals on complex matters.
Outsourced Chief Accountant
Here, the client typically handles routine accounting tasks, while an experienced external professional takes on all managerial functions. This option is most commonly chosen by small enterprises.
Three models for managing accounting
1. The company has an in-house accountant, but this comes with significant expenses for organizing their activities (workplace, additional costs for vacations, sick leave, and taxes).
2. A non-staff accountant handles accounting, but this also involves organizational costs, and the specialist may not always be immediately available when needed.
3. A large, reputable outsourcing company employs experienced professionals and an entire team to solve complex problems. Such a company assumes all organizational responsibilities, providing a comprehensive suite of accounting services to the client.
Who should consider outsourcing their accounting?
- Large businesses that conduct numerous transactions monthly, which often leads to errors in maintaining accounting records.
- Seasonal businesses, for whom maintaining an accounting staff year-round is not cost-effective. Collaborating with a single experienced outsourcing company is a more reliable and convenient solution.
- Foreign companies often prefer outsourcing accounting services, since accounting standards differ across countries.
- New businesses and startups without accounting experience can ensure proper transaction handling and minimize errors by using outsourced expertise. The outsourced specialist oversees the correctness of operations, documentation, and reporting, reducing the risk of mistakes.
Four advantages of outsourcing accounting services
1. The company's accounting will be managed by professionals from outsourcing firms that value their reputation and only hire experienced and talented staff.
2. Business leaders are relieved from the tasks of hiring and training accountants, thereby eliminating associated risks. As is known, an ideal accountant has to be thoroughly cultivated over time. This responsibility shifts to the outsourcing provider.
3. The service quality of large firms is typically high, as they face reputational and financial risks. Clients receive a final product for which the outsourcing provider is contractually responsible.
4. A significant benefit of accounting outsourcing is its practicality. Clients only pay for the services they need, without the cost of maintaining in-house accountants, vacation pay, or sick leave.
Disadvantages and risks of outsourcing accounting
Potential downsides are usually linked to the activities of small or less reputable outsourcing firms. Businesses mainly worry about confidential information leaks, insufficient service quality, and mistakes that could lead to financial losses.
Risks are minimal when partnering with Unistaff Global Services. You can find detailed criteria for selecting an outsourcing company below.
How to choose an outsourcing company
- Find out what accounting-related issues the company addresses. Ideally, it should have experts specialized in providing specific services.
- Check for operational protocols (usually included with the accounting outsourcing contract). These attest to the existence of quality standards and adherence to work completion and deadlines.
- Inquire about the technology used by the outsourcing firm, which affects data security and ease of information exchange.
- Make sure there are financial liability guarantees. Study the contract and the professional liability insurance policy carefully.
In summary, accounting outsourcing is convenient, cost-effective, and relevant. If you are in search of a dependable and professional business partner, consider Unistaff Global Services. Fill out an application on our website or call us, and we will explain how we can assist your business.