Accounting is an essential part of any business. No company can make important decisions or effectively plan for the future without knowing with certainty that their finances are in check.
There are two ways for businesses to handle their accounting. In the traditional method, companies hire in-house staff and create an accounting department within the company. The other approach that businesses take is to outsource their accounting tasks to a firm that specializes in accounting services.
Both methods are valid and work, however, many business owners are reluctant to outsource their accounting services to another company. Over time, various myths surrounding outsourcing accounting have emerged, increasing the hesitancy of business owners to use the services.
Myths About Outsourcing Accounting Services
Many businesses decide to hire an entire accounting department even when it’s costly and inefficient. For these companies, outsourcing accounting could provide them the resources and expertise to handle these important tasks properly. Unfortunately, many myths and much misinformation about outsourced accounting can confuse business owners and prevent companies from utilizing these often highly valuable services.
To help you understand the real benefits of outsourced accounting, let’s dissect its most common myths:
Myth #1: Outsourcing Accounting Services Is More Expensive For My Business
Many business owners believe that outsourcing accounting will cost their company more money. However, this myth isn’t true. Each business is different, but more often than not, outsourcing accounting is less expensive than having an in-house accounting team.
Hiring an in-house team may seem more affordable at first, but the cost of retaining employees dedicated to the finance and accounting departments can be substantial, especially when considering that the team will likely need to grow with the business and salaries and benefits will continue to balloon over time. With outsourced accounting, you don’t have to keep full-time employees as you only pay for the services that you need.
Outsourced accounting firms can also provide greater expertise and accuracy. They will likely pick up on opportunities for tax deductions, penalties, and credits you might have otherwise missed.
Myth #2: Giving Financial Details To An Outsourced Accounting Firm Is Not Secure
Since accounting services deal with sensitive information, most businesses are concerned about handing over their financial information to another company. There is a degree of truth to this belief, in the sense that nothing is ever 100% secure in any situation.
Financial documents are always at risk of data breach. It could happen whether all accounting takes place in-house, in a home office, or at another company.
Outsourced accounting firms take extensive measures to ensure the highest level of security for all documents. They conduct regular audits of all the files they possess to make sure there hasn’t been a data breach. These firms implement greater security measures than your company does itself as they understand the sensitive nature of their work and need to maintain a reputation of reliability.
Myth #3: My Business Will Lose Control Of Our Financial Documents
As a business owner, you want to have complete control over all aspects of the business. That’s an understandable concern. But this can often lead to companies extending that concern to the notion that by outsourcing one of their essential business functions they will lose control over it.
This is a myth. In reality, having a firm that specializes in accounting handling your books will give you more control over your finances. These specialized firms have a high level of expertise and your accounts will be organized in a way that provides a clearer picture of your financial standing. You’ll then be able to make more informed decisions for your business with input from experts who specialize in accounting services and financial planning.
Myth #4: Only Large Companies Outsource Accounting Services
Outsourced accounting services can benefit companies of all sizes. In fact, it’s often small to mid-sized companies that get the most value from outsourcing these services.
For these companies, outsourcing provides a means to stay on top of their finances while they may still have limited human resources and capital. Outsourced accounting firms often create specialized services for smaller budgets, enabling companies to cut accounting costs and prioritize their essential business functions.
Myth #5: If They Are Not Physically Present, They Aren’t Really Working
With today’s technology, location is no longer an issue. The best firms use cloud accounting software that allows outsourced accounting firms to become an extension of your internal team. They can work from anywhere they have access to the internet and you can review documents from the cloud no matter where you are.
Cloud accounting is more efficient than traditional methods, as you’re able to automate repetitive tasks and your data is always up to date in the system. You can keep track of the work the outsourced firm is doing through regular performance reports or by securely logging into the cloud accounting software and checking the progress of tasks in real-time. With cloud accounting, you’re always in control and can enjoy complete transparency.
Myth #6: Outsourcing Accounting Services Takes Too Long
Plain and simple, there isn’t any truth to this myth. With cloud accounting software and other online programs, you can transfer files quickly and with ease, and the transparency granted by modern accounting software and the internet allows you to always keep a lid on things.
Outsourced accounting firms realize that you use their services to save yourself time. As such, they create systems that allow you to collaborate as efficiently as possible. Everything from onboarding to reporting is streamlined, allowing you to spend more time focusing on your business.
Myth #7: Outsourced Accounting Means Overseas Accounting
The word “outsource” comes with some negative connotations. Many assume that outsourcing means hiring workers from overseas to obtain a product or service you need. This connotation is long outdated, and doesn’t accurately reflect the decentralized nature of the business landscape as it exists today.
Firms all over the world offer accounting services, however you have a bevvy of choices right in your home country that will serve your needs. US based firms like Lloyd & Hodge offer expert accounting services with the assurance that you have US-based experts on hand to handle your finances domestically and communicate with you directly.
Businesses of all sizes continue to turn to outsourced services as their preferred accounting solution. Outsourcing to an experienced accounting firm provides an opportunity to receive expert accounting support without the need for increasingly costly in-house resources.
Lloyd & Hodge wants to free up your valuable time so you can focus on what you do best. We offer a range of accounting solutions for small businesses, including bookkeeping, payroll, and tax management. Contact us today to learn how our accounting services can help your business thrive.