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Outsourcing Accounting Services for Small Business? Your FAQs Explained  

31-May-2024 . 5 min read

Outsourcing accounting services for small business has become common nowadays. It presents a practical and cost-effective solution to streamline your accounting function, remove its bottlenecks, and improve productivity.  

Yet, some small business owners remain hesitant to adopt this strategy. They are usually unsure how accounting outsourcing will fit into their overall operations or unaware of how it can improve their bottom line.

So, let’s delve into some frequently asked questions about accounting outsourcing to address some of the key concerns you might have if you are a small business owner!

Should I Outsource My Accounting for Cost-Effectiveness Only?  

No, you don’t have to do it just because you’re in a financial tight spot or for cost-effectiveness alone. Outsourcing can be much more rewarding beyond this one most highlighted advantage.    

You can choose to outsource your accounting department to streamline your overall business operation by shedding off less important tasks in favor of high-value core tasks.  And this will allow you to focus on your ‘money processes’ that bring in the revenues and profits.

Unconstrained by everyday involvement and management of accounting tasks, your team can go full throttle chasing your business goals.  Surely, you’ll appreciate it so much if you’re able to do so.  

Not to mention, recruitment and retention are becoming ever more challenging. You might have observed and experienced the worldwide shifts happening in work cultures, employer and employee expectations post Covid-19 global pandemic and ‘great resignation’ phenomenon in the United States.   

As such, companies are finding it harder to source qualified, long-term accounting and bookkeeping staff amid labor shortages and wage spirals. 

Digitalization and automation are rapidly transforming work environments.  And your business needs to align with the evolving technological landscape to stay competitive.  

small-business-accounting-outsourcing-advantages

However, it can be daunting to keep up with the latest accounting software, technology infrastructure, and trends on your own if you’re a small company.   

Outsourcing enables you to leverage the best technologies without making any hefty investments.  This is especially useful when your small business is braced for a scale up or expansion.  

Time management, stress, and burnout are key concerns many small business owners grapple with. Of course, when you are a lone wolf or have a small team, it can be difficult for you to manage your time and focus effectively.  

But when you have a trusted and expert outsourced service partner to take care of your accounting, you are covered for at least this area of your business operations.  

I’m Looking to Outsource Accounting! What Services Do Accountants Provide to Small Businesses?  

Accounting services can range from basic bookkeeping to complex financial processes. Some accounting outsourcing firms provide end-to-end services while others offer selective expertise.   

Besides, some accounting service outsourcing providers handle only industry-specific accounting tasks.  

Therefore, you need to look out for this and any specific needs of your business when choosing an accounting services partner.   

Following are the eight commonly outsourced accounting services for small businesses:  

  1. Bookkeeping Tasks: Maintaining accurate and up-to-date financial records. It covers performing general ledger entries, accounts receivable and payable, and bank reconciliations. 
  1. Accounting Workflows: The accounting tasks may cover operational, general and management, and financial management aspects.    
  1. Accounts Payable Service: Managing the payment of invoices to vendors, ensuring timely and accurate payments, ensuring good relationships with suppliers. 
  1. Accounts Receivable Service: Tracking and collecting payments from customers, ensuring timely revenue recognition and minimizing bad debt. 
  1. Invoice Processing: Tasks cover the creation, sending, and tracking of invoices, streamlining the billing process and improving cash flow.  
  1. Payroll Processing: Calculating and processing employee paychecks, calculating applicable deductions, and making required tax payments. Thus, delivering timely and accurate payroll administration. 
  1. Tax Preparation and Compliance: Preparing tax returns for individuals, businesses, and partnerships. Make sure compliance with federal, state, and local tax regulations is in order. 
  1. Financial Reporting: Formulating financial statements and reports, including cash flow statements, income and expense reports, and balance sheets. So, you get valuable insights into your company’s performance and financial health for the reporting period.  

Small team, limited resources, long hours, fluctuating workloads and many more challenges! You know the drill if you’re a small business owner. Kudos for managing it all so incredibly.  
However, rising operating costs and a evolving accounting & compliance landscape can throw you off balance even when you’re trying your best. So, you should re-think keeping it all in-house and consider outsourcing.  

How Much Does It Cost to Outsource Small Business Accounting Services?  

The cost of outsourcing accounting services for small business can depend on many factors. These include the size and complexity of operation, the range and level of services availed, customization for unique needs, expertise and service quality of the service provider, bundled services, discounts offered, etc.    

Outsourcing typically results in significant cost savings compared to hiring a full-time accountant. Nevertheless, when evaluating outsourcing options, it’s crucial to consider the overall value proposition rather than solely focusing on upfront costs.  

Usually, cost-effective access to skills and expertise, time savings, and risk mitigation benefits outweigh the initial investment, making outsourcing a worthwhile decision for many small businesses. 

Outsourcing accounting can halve your costs spent on an in-house operation, depending on the range and type of services used. This can result in significant savings for your business. 

Save up to 35-60% when you outsource accounting services from Centelli. ‘Your peace of mind’ is among the key benefits we pack in. Contact Us Now!      

How to Decide on Outsourcing Accounting Services for Small Business? 

Outsourcing your accounting process to an external service provider is the right decision for your business depends on several factors, including: 

  • Current Accounting Capacity: Assess your current accounting capabilities and resources. If you’re struggling to keep up with accounting tasks or lack in-house expertise, outsourcing may be a viable solution. 
accounting-tasks-small-business-can-outsource
  • Financial Resources: Compare the cost of outsourcing to the cost of hiring and retaining an in-house accountant to assess if outsourcing aligns with your current financial situation 
  • Business Growth and Goals: Consider your business’s growth trajectory and future financial goals. Outsourcing can help you scale your accounting needs efficiently as your business grows and becomes more complex. 
  • Management Focus and Priorities: Assess your time constraints and priorities as a business owner. Outsourcing can free up your time to focus on strategic growth initiatives rather than day-to-day accounting tasks. 

Leveraging Centelli’s Accounting Outsourcing Services can be your most pivotal move to improve your small business operations in sure-fire ways.  Reach out to us to learn more about our accounting services & packages and Free Consultation.   

In Summary 

Outsourcing accounting services for small business is a strategic decision. You can reap its fruits fully if you approach with careful consideration and awareness.  

You need to research reputable accounting outsourcing firms and seek recommendations from trusted sources and industry peers. Also, clearly define the scope of services you need from the outsourcing firm, outlining specific tasks, deliverables, and timelines.  

This will ensure that both parties are aligned in service terms and expectations, ensuring meaningful outsourcing outcomes for your business.   

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