Outsourcing accounting and tax services is fast becoming a global trend. According to Dun & Bradstreet, the outsourcing business is generating revenues of up to $4 trillion a year (Fortune, 2005). In this article, I will look at why it is probably the best idea for businesses to outsource accounting services.

It is affordable and Cost-effective

Outsourcing accounting services is cheaper than having dedicated accounting staff. It is a fact that a single accountant is not enough for any business to keep track of transaction records and be able to produce accurate and timely financial statements. I have not even mentioned the processes of running payroll, calculating and filing tax returns on time and according to statutory regulations. This means that a business will have to hire more than one qualified accountant or bookkeeper, pay them a salary and benefits as well as provide office space for them. As a great alternative, a business can simply outsource the accounting function and benefit from a team of qualified and experienced professionals while paying for only the work done. You will not have to pay recruitment costs, infrastructure expenses, training expenses or staff benefit costs. This means that you can effectively lower your overhead and operational costs.

Financial Reports are readily Available

It takes a lot of time to record transactions and process those records into financial reports and statements that can be used by management to make informed decisions. It is not easy for in-house accounting staff to provide such ad-hoc reports in an instant. When you outsource, all your information and reports are readily available and you can get them on demand. Research has shown that businesses that pay attention to figures tend to do far much better than those that don’t. So outsourcing accounting services is the best way to keep your finger on the pulse of your business figures.

It Makes it Easier to Get Business Financing

Banks and investors, trust financial statements produced by independent firms rather in-house accountants. When you outsource, your business gets access to professionals who will keep your books up to date and in order. This will make it easier for you to apply for loans and to explore other business financing avenues.

Helps meet deadlines and stick to regulations.

Filing tax returns late attract fines and penalties while incorrect tax figures may be construed as criminal and may lead to litigation battles with authorities. Because many businesses do not have enough time to deal with these figures accurately and in time, it is advisable for firms to outsource the accounting function and have independent and objective people to do it for them.

In a nutshell, businesses should outsource accounting services not only because it gives them more time to focus on their core business but, it is cheap and cost-effective, it makes financial reporting easier, makes it easy to get loans as well helping them meet statutory deadlines for filing tax returns.