Accounting firms around the world are facing new challenges with a general economic downturn. To survive this year, revisiting their business plans becomes unavoidable for firms to keep their financial wheels turning during the lockdown. Here we will detail the benefits of outsourcing accounting services during COVID-19.
Benefits of Outsourcing Accounting Services During COVID-19 – Overview
COVID-19 has not only impacted the entire global economy but also change the strategy of working in any accounting firm. As the magnitude of coronavirus increased, most of the businesses either small or large had to temporarily shift their work to online as a quarantine measure. This impacted the businesses equally as employees faced the problem of lack of coordination, shifting workplace, not able to deliver good quality product/service and less experience working totally in a remote setting.
With over 6 months working during this time, many CPA firms and businesses are not hesitating to partner with accounting outsourcing companies as a solution to grow their businesses in these unprecedented times.
What to Expect
Accounting outsourcing proved to be beneficial not only for the largest firms but for the small to medium CPA firms and businesses who faced challenges in cash flow during COVID-19.
By outsourcing their accounting and tax back-office work, CPAs can be in the nonchalant state of knowing that their accounting processes are in the right hands as they focus on business development.
But before hiring any accounting outsourcing service, you must understand how you can leverage this service to its maximum potential. Benefits of outsourcing accounting services during COVID-19 pandemic include:
- Increased employee morale and productivity by lessening long work hours & weekend staffing.
- Reduce or drop peak season overtime costs.
- Refocus staff on higher-value tasks.
- Transform the variable cost to a fixed cost.
- Lead to faster total asset turnover (TAT) on returns because of time zone differences.
- Improve document management processes.
Increased Cost Efficiency
Saving money is the top priority of any firm as many firms are losing clients, cutting project costs and workforce in the worst case which exacerbates the challenges.
CPA firms must do the math before signing the agreement to any outsourcing vendor. They must determine how much they will save by choosing too outsource their accounting and tax back office work.
In most cases, outsourcing bookkeeping services, tax preparation management accounting and other back-office work of CPA firms can cost them less than organizing a full-fledge in-house facility including employee benefits, providing a wide pool of expenses for remote working and so on.
Also, firms can save money by hiring the right firm who has experienced professionals to provide them long term benefits by heightened efficiency and minimized cost.
Automate Your Accounts
Even though technology plays a major role in our daily life, migration of your accounts to a cloud based accounting system seems like a task to any major accounting firm.
In order to do this successfully, you need an expert who can help you migrate data to the cloud. Be sure to check with your outsourcing vendor on what kind of third party software they use.
Outsourcing accounting platforms can deliver real-time reporting and easy scalability options after integrating your work using full cloud-based solutions like QuickBooks, Xero bookkeeping services, and TaxCalc.
What you can outsource?
Every CPA firm has its unique demands when it comes to outsourcing bookkeeping services, accounting and tax services. When it comes to flexible options, it is advisable to ask your accounting outsource partner about the outsourcing models which include FTE (Full-time equivalent) and hourly model (Pay as you go) to decide which will the best suited for your firm.
Below is a list of some of the services a CPA firm can choose to outsource:
- Assets/equipment ledger maintenance
- General ledger maintenance
- Expenses ledger maintenance
- Income reconciliation services
- Accounts payable services
- Preparing aging reports & summaries
- Bank account reconciliation services
- Credit card reconciliation services
- Inventory reconciliation
- Payroll reconciliations
- Computation of Sales Tax
- Online Filling of the Final Sales Tax Returns
Security is Paramount
There is always the thought in every client’s mind of what would happen if my data got leaked while transferring it to the outsourcing vendor. Luckily, accounting & CPA firms can rest assured that their data is secure as outsourcing providers use the most secured systems to handle sensitive client data.
Also in COVID-19 when everyone is working from home, Outsourcing vendors are providing secured VPN connections as a security measure.
Frequently Changed Laws
Many Governments are trying their best to provide flexibility when submitting your tax returns. They are adjusting laws so the impact of the coronavirus outbreak is minimized.
As a smaller firm without a large compliance or law department, keeping track of all of these changes can be a daunting task. Instead of worrying about this, outsource this type of work to a third party and let them handle everything, so you can just focus on the task at hand.
For more articles about the benefits of outsourcing accounting services during COVID-19, be sure to visit our page here.