For starters, accounting is the recording of all financial transactions of an individual or a business and translating these transactions into Financial Statements that will guide a firm’s decision-making. It is the most basic, key component of any business and is the foundation for all business decisions. Transactions listed by an accountant include invoices, receipts, sales, payments, and purchases. Accountants manage all of a company’s accounts, the general ledger, and other pertinent details, then translate these data to financial statements.
Business owners may opt to manage their records or hire an in-house accountant. However, the latter option is more costly as your company would have to shoulder accounting fees, SSS, and PAG-IBIG benefits. You also need to provide leave credits and bonuses. In the same token, DIY managing your records may pose an additional burden for you, especially if you are also working to improve and market your goods, plus tend to your customers.
To remedy the stress of keeping one’s records and providing an alternative to the high price of paying an in-house accountant, you may outsource accounting services. It essentially works like a BPO set-up where you hire people outside your company to do the work for you but on a much smaller scale. Here is how it works:
1. Recognize your needs
The first step to outsourcing work to an accountant is to recognize your company’s needs. If you can manage record-keeping, running your business, and maybe raising a family, chances are, you can do without one.
However, suppose your schedule is overwhelmingly busy. In that case, your business is growing at an incredibly fast pace, or you simply lack the organizational skills needed to keep good records, then you need an accountant to save you from the stress.
2. Identify outsource accounting services that will cater to your needs
After recognizing your need, you now research for accounting firms that can properly assist you. Notably, different firms offer a different range of services. Once you have identified a firm that provides services that can help meet your requirements, get in touch. Contact their office and schedule a meeting.
Upon meeting the accountant, you may discuss what services you would like to avail of and how you would like to go about payment options. Get into the nitty-gritty, like how often you should expect reports and other updates. You may have them do bookkeeping and also tax management if they offer such a service. It is also good to consider a firm that is flexible and will willingly represent you whenever you are tax-mapped, called to court, or encounter issues with the BIR.
3. Forward all your transactions
After settling the payment and agreeing on certain terms with the accountant, all you have to do is forward them all of your transactions and previous records and books. All transactions and the respective accounts they belong to will be recorded by the accountant under both credit and debit. This will then be documented on a general ledger. These detailed accounts will then be utilized to prepare your financial statements.
You will no longer need to record any receipt, sale, purchase, and expense as the accountant will do it all for you. Nevertheless, as the business owner, you are expected to be transparent regarding all transactions so that your accountant can account for everything accurately. Remember, they cannot record what you do not provide evidence for.
4. Monitor all your accounts
All that is left to do is to monitor the accounts and ledger. This will allow you to view your company’s assets, liabilities, and equity and will help you analyze your financial information. Collected and dissected data will aid you in making smart, educated decisions.
Furthermore, this information will also help you during the stressful tax filing season. Monitoring your accounts is particularly important as it enables you to check for discrepancies, such as incorrect transactions, wrong pricing details, pilfered funds, and the like.
The Benefits of Outsourcing Accounting Services
Now that you’ve read the process of outsourcing accounting, it is vital to recognize its benefits for you and your company. Take a look at them below:
1. Eliminates certain responsibility, lessening stress
2. Provides proper documents transactions, limiting errors and guiding decision-making
3. Saves you and your employees time, allowing you to focus on business growth and development
4. The flexibility and range of services offered by independent accounting firms might be more practical and economical for you and your business compared to hiring an accountant in-house since you may avail of only the services you need
5. Get professional advice and analyses which will help in decision making and projections.
Final Wrap Up
Outsourcing work to an accountant is a great solution for the financial upkeep of small and micro-enterprises. It grants you and your company benefits such as more work time flexibility and lessened stress, among others. More importantly, hiring an accountant helps you keep more detailed accounts.
When in need of financial services, it is always best to seek help from a reputable Certified Public Accountant. Apart from accounting and document preparation, they also offer professional financial analysis and advice. They also offer services like specified accounting (Management Accounting, Cost Accounting, etc.) and audit.
At the end of the day, the type of service you outsource is dependent on your need. If you need help, don’t hesitate to get in touch with us. We offer a free 30-minute consultation. We’d love to assist you in fixing your business’s financial health.