Skip to content Skip to sidebar Skip to footer

The benefits of outsourcing your accounting and audit needs

Bookkeeping might be the process of recording business transactions after they happen, but accounting and advisory is so much more than that. Entrepreneurs cannot treat accounting and advisory as an afterthought. Accountants should help you make decisions about the future.

Accounting services should be about more than just bookkeeping and financial admin. Instead, good accounting services can help you to analyse transactions to gain valuable insights to plan for the future. It can offer the financial guidance your business needs to ensure its growth and financial success.

But whether you are a small business (with an even smaller team) or a more established company that is scaling up, you may not always be able to rely solely on the accounting expertise in your team. Outsourced accounting services can give your business access to expert accounting and tax advice exactly when you need it.

 What does your accountant do?

Accountants produce the vital documents you need to run your business. They audit your books, prepare reports for tax purposes, and generally oversee the everyday financial functioning of your business. Your accountant helps you to keep track of the money going in and out of your business on a daily, weekly, and monthly basis. Yet, they also play a valuable part in determining its long-term financial health. Most importantly, an accountant should help you make decisions about your business’s future.

An accountant’s duties might include:

  • Preparing and reviewing budgets and cash flow forecasts,
  • Preparing profit and loss statements and monthly reports,
  •  Analyzing cash-flow and making necessary recommendations,
  • Setting up and monitoring key performance indicators (KPIs),
  • Developing and implementing control procedures as well as systems automation,
  • Developing and maintaining financial databases and computer software systems,
  • Being involved in revenue, expenses, invoices, and other documents,
  • Handling payroll administration and entries,
  •  Working with your auditors to prepare the necessary reports,
  • Compiling and analyzing general ledger accounts, and documenting business transactions, and
  • Resolving accounting discrepancies.

What are the benefits of bookkeeping and accounting for your business?

Your accountant is an indispensable part of your business and good accounting can provide you with the following benefits:

  • Access to detailed financial recordkeeping.
  • Assurance that your company is complying with regulations and SARS requirements.
  • Advice and assistance with tax filing and compliance.
  •  Access to specific reports when you need them.
  •  Access to financial analysis.
  • Facilitating the auditing process, and
  • Facilitating a smooth interface with external banking functions

What is accounting outsourcing?

Outsourcing enables companies to benefit from the greater expertise that an external service provider has in performing a specific task. This means that the external service provider can use its expertise and economies of scale in its own business to deliver better, faster, and cheaper results than you could yourself. An outsourced accountant can fulfil the same functions as one working in-house but is not permanently employed by your company. Businesses can outsource some or all their accounting services including payroll, accounts receivable, and financial reporting, as needed.

What are the benefits of outsourced accounting?

Outsourced accounting services can help your business to save money and reduce monthly expenses on your payroll. This can be especially valuable for smaller businesses as it can allow them to get expert help and advice on a short-term basis instead of hiring a permanent employee.

Companies that offer accounting and tax services are experts in their field and can offer your business greater access to these skills. They also provide you with greater flexibility, allowing you to access advice or resources when you most need them. For example, outsourced accountants can assist your in-house staff with year-end audits or assist when your staff are away for long periods of time (e.g. maternity leave or when you are between appointing full-time staff).

The ability to call in extra help can go a long way to ease the burden on your permanent staff and help ensure that they do not become overstretched. By making sure your team has the resources and assistance they need, you are not only maintaining positive company morale but also enabling them to focus on the higher-value tasks that are central to your business’s success.

When should I outsource accounting?

While even small businesses can benefit from outsourcing accounting services, it often becomes critical to bring in external experts when your business begins to grow larger. There is no one-size-fits-all approach, but there are some signs that may indicate that your business needs higher-order accounting services from experts like Outsourced CFO. These signs include:

  • Your business has generated $1 million in revenue.
  • Your staff number has grown bigger than eight to ten people.
  • You are looking for investors or other funding.
  • The business has become too complex for you to manage every aspect of it alone.
  • You have entered the accelerated growth stage of your business lifecycle.
  • You need more than invoicing from your accounting software.
  •  You need to upgrade and integrate your accounting software to create an enterprise-wide network.
  • You need sophisticated financial reports for data-based decision-making and financial projections.

What should I look for when outsourcing accounting services?

When you outsource your accounting, you are entrusting another company with your confidential financial data. This means it is critical that you choose a credible and experienced service provider in which you can have complete faith.

It is important to do thorough due diligence, whether you are looking for accounting services in South Africa or anywhere else in the world. At the very least, find out what level of experience the accountants have and verify their credentials. Vet your prospects properly and keep checks and balances in place. You can also ask other business owners for recommendations or read reviews to see how a company performed in the past. Word-of-mouth can be a powerful indicator here.

Once you’ve done this due diligence, also consider soft skills and professional chemistry. You need to make sure that both the company and the candidate are a good fit for your business and company culture. Although they won’t necessarily be sitting at your offices, you will be working closely with the individual and their team, so make sure that you see eye to eye. Cloud-based accounting services, such as those offered by Outsourced CFO, help to make collaboration much easier. 

Keep your team up to date on the process to make the transition as smooth as possible. An onboarding roadmap can help to facilitate this process, as well as a clearly defined exit strategy and timeline. It is also helpful to find out what software packages the company uses and to talk about billing, hours, and hard deliverables from the get-go. To make sure that you do not overspend on experts who bill by the hour, you can ask about and agree on requirements and hours per deliverable. You should also ask for regular updates and reports to help you keep your finger on the pulse of your business.

OCFO

From an advanced outsourced accounting team to customized management reporting and controller services, Outsourced CFO’s accounting service is designed to augment your staff’s skill set and transform your finance function. Whether you are a growing enterprise wanting to take that next step or an established business that needs expert guidance during a difficult period, we can match a specialist accountant or CFO to your needs.

If you think you may benefit from the services of an expert accountant, but aren’t sure of the cost and details, contact us today for a consultation or take a look at our available packages here.

Outsourced CFO is a proud Partner of the NSBC

Get the best business tips delivered to your inbox!

© NSBC Africa 2023. All Rights Reserved.