What Outsourcing Entails
This blog is written by Mr. Awais Mumtaz, Senior Associate Taxation and Corporate Services. Please read this informative piece and provide us your valued comments.
What Outsourcing Entails
Organizations, these days, not only look for cost-effective solutions to systematically run non-core activities like accounting and payroll services, but also expect to add value in order to achieve better control and understanding of cash flow and thereby make informed decisions. In spite of being considered as non-core, accounting services form an integral part of an organization’s operational capabilities and systematic functioning. Therefore, outsourcing, of accounting, tax and corporate services is the most economical solution. Further outsourcing renders various benefits, which are describe here in detail.
Fast Growth and Sustainably
Accounting Outsourcing and bookkeeping is done for one major reason – to help you maximize your return on your core competencies. It frees up your valuable time that you can use to grow your firm. Not only you can bring in more clients by focusing on marketing but you do not have to manage the tiresome cycle of hiring, training, reviewing, managing, and firing and so on.
When you outsource accounting and bookkeeping, invariably you will pay only for the work actually done. It means you don’t have to pay for payroll taxes, overhead, sick leaves, vacation, training, managing etc. Thus, it helps increase your profit margin significantly and at the same time, it also helps you sell more work in any given time period. Outsourcing accounting and bookkeeping can reduce your costs by 30-50% or more.
Outsourcing accounting and payroll processing services to professional consultants can in fact helps to control any possible fraud by staff within the organization. The service providers are accountable for every transaction processed as well as quality and accuracy control.
Avoiding penalties during tax processing:
Inappropriate payroll management could lead to inaccurate tax filing of statement of collection and deduction of tax, to be filed under section 165 of Income Tax Ordinance, resulting in tax penalties. Outsourcing payroll processing services to professionals can save companies these hassles and ensure accurate payroll processing.
Reduced Risk of Suddenly Losing Staff
Accounts staff is considered key staff of any firm, a firm cannot afford immediate leaving of job by an accountant. Small and medium firms cannot afford to keep “buffer staff” to take care of such eventualities. Longer working hours and stress are common effects of such challenges. But when you outsource accounting and bookkeeping, you work with an expert and experienced team that is more reliable because of teamwork. Those team members and managers check and double check and review each other’s work, which ensures that the quality of work is as good as it can get. What’s more is that you don’t have to worry about suddenly losing a staff as the service provider has much larger teams to absorb any such staff attrition without affecting your service delivery.
Many accountants get frustrated with the errors, the delays and review needs of their in-house staff, which is money down the drain. But you can manage an outsourced provider far more stringently to not only ensure that the work quality improves but also to ensure that you always pay only for reasonable productivity. It will grow your profit.
Quality of Reporting
Outsourcing companies work for many services so their staff gets trained by doing work for multiple firms. When you outsource accounting, you get the best brains many Professional Accountants have out there working for you.
You Can Adjust Easily to Your Business Cycles
Accounting and bookkeeping workloads are never even all the time. Outsourcing enables you to easily increase staffing or cut back quickly depending upon your business cycle. It provides you a flexibility that is difficult to achieve on your own.