Accounting Outsourcing-takes your Company to a New Height

To earn profit is the motto of any business. Before starting any new business, all big and small organization plans about their various departments. In any business organization, we find branches like human resource, technical branch, public relation, administrative department and last but not the least the accountant department. The accounts department is a very important section. To calculate the profit and loss of any business requires a lot of brainwork. If a single penny is calculated wrongly, then a company has to suffer a huge loss. Accuracy is the trademark of accountancy. Therefore, it is very necessary that a company hires an efficient accountant who could look after all their dealings regarding account in a proper way. Today, accounting outsourcing is getting much prominence. And companies are finding it more effective than hiring any individuals from the accounts background.

Accounting section is the heart and soul of any organization. The work involves lots of patience and dedication. Accounting is a huge task and involves many things like maintaining balance sheets, making profit and loss statements. It also includes things like maintaining journal sheets, keeping a track of the ledger books, having a thorough check on the bank reconciliation statements and many more things. An accountant should be very accurate in his dealings. His minute wrong may prove to be a big blunder. Companies are finding offshore outsourcing accounting very effective. It is capable to give them an error free work as well as analyzing their status in the market.

An accountant is an important organ of an organization. He needs to work on accounting, bookkeeping and financial outsourcing needs. There are many private firms that offer accounting outsourcing

facility at a much cheaper price. You need to hire the best professional for your organization for keeping all your accounts correctly. An expert accountant not only takes care of your finance but he will also give you a clear picture as where does your company stand in the present competitive market. Internet is the easiest way to get information about the various private firms that provide accounting outsourcing. India excels in the field of accounting outsourcing. United States, United Kingdom any many other countries are taking the accounting outsourcing services from India. Accounting outsourcing from India is very cheaper and job quality is excellent.

There are several advantages of accounting outsourcing. They are-(1) An offshore accounting outsourcing is reliable and competent and simplify the work.(2) The accounting outsourcing relieves the company from the tedious job of accounting bookkeeping and (3) Accounting outsourcing saves office space and related expenditure.

Accounting outsourcing is cost effective. The owners can rely upon this new trend of accounting outsourcing. They can now feel that their company is in the safe hand. Accounting outsourcing is flourishing day by day. And companies are taking full advantage of it. Accounting outsourcing is a fast growing business. Internet will help you to know about the various firms that provide accounting outsourcing. Accounting is a tough job and basically owners do not have much idea regarding it. They rely on their account departments for that or they opt for accounting outsourcing.

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Make Your Accounting Records Perfect With Accounting Outsourcing

Since accounting is all about perfect handing of financial transactions, every business needs to give special treatment to its accounting section. However, most of the businesses try to handle their accounting tasks through their available accounting staff but in cases where this staff is not sufficient enough to tackle this tedious task, help from an accounting outsourcing service provider can be taken. At present, most of the businesses are outsourcing their accounting functions to achieve the desired profit level, as this external help not only saves their time but also allows them to perform other relevant tasks on time. It is quite true that accounting is considered as the most tedious task, as it demands a lot of time and concentration of the concerned person, as slight mistake in any transaction can cause major blemishes in final accounting records. Although, business owners put every possible effort to make their accounting records perfect, but since cash in any organization flows in various directions and sections, tracking cash flow on regular basis becomes quite hard-hitting task for the accountant. On the contrary, taking help from an outsider firm relieves the business owner from this worry and provides him or her with ready to use accounting details.

Accounting records portrays the financial condition of any business; hence it is required to pay special attention to accounting and bookkeeping tasks. Business owners, who cannot make it possible through limited accounting staff, can get great help with accounting outsourcing. Blemishes in accounting records can affect the position of the business, as all decisions are taken only after analyzing accounting and other financial details. Accounting outsourcing helps businesses in crushing such accounting flaws and developing precise and updated accounting records, so that the business owner may better concentrate on his or her core business functions.

Accounting outsourcing is all about perfect management of accounting details and data that are used for making crucial decisions and evaluating the exact position of the business. Basically, outsourcing refers to a process that employs human resources from outside to perform any specific task; in fact, when it comes to faultless accounting management, every business owner considers outsourcing as a beneficial move. Accounting professionals that are hired through this process, do not occupy any place in the client’s organization and work independently from their own office that not only makes the accounting process hassle free but also trims down the operational cost of the client’s company.

Professionals hired through accounting outsourcing process, perform every accounting task on daily basis and also prepare weekly and monthly reports to keep the business owner informed about every accounting transaction. Basically, this process includes daily accounting tasks such as listing of day-to-day transactions, keeping record of daily transactions, reporting and recording. Since all accounting records are used for tax assessment, well maintained accounting section helps the business owner in arranging all necessary records to file his or her business tax on time. Therefore, it can be said that outsourcing your accounting task to an efficient firm can add more value to your business efforts.

Financial Accounting ACG2021 SFCC Spring 2008 Crosson Chapter 2

Small Business Financial & Accounting (f&a) Offshore Outsourcing Cost

Fortune 500 companies have been off shoring the financial and accounting business processes (BPO) to countries like India, Philippians, China, etc. These companies have big budgets and a big team of consultants who analyzes the total cost and ROI of sending their financial and accounting work to the service providers in offshore locations. Though smaller companies have started off shoring their financial and accounting work to offshore locations but like big corporations small businesses do not have huge budget to hire consultants to identify the total cost of off shoring their financial and accounting work to offshore locations. But small businesses can still perform their due diligence in calculating total cost of their offshore engagement and gain critical knowledge in finding ROI of sending their financial and accounting work to offshore locations. In this report we will go through all of the hidden costs of offshoring financial and accounting business processes.

1. Different Costs of Offshoring Financial & Accounting Work

Small businesses mainly consider offshoring their work, they will consider only the hourly rate they need to pay to the offshore vendor for various accounting works like bookkeeping, accounts payable, accounts receivable, etc. There are several other additional hidden costs small business have to face in their offshore outsourcing engagement. Typically a small business goes through following offshore accounting work cycle in their offshore engagement:

• Selecting an offshore accounting vendor

• Sending the work to the offshore vendor

• Answering questions for the offshore vendor

• Receiving the finished work from the offshore vendor

• Verifying the finished work from the offshore vendor

• Monitoring the quality of the finished work from the offshore vendor

2. Cost of Selecting offshore accounting vendor

The cost associated with selecting an offshore accounting vendor will be small compared to other costs. Most of the time small businesses can find a qualified offshore accounting vendor simply by searching in Google or by contacting other small businesses those who are already using an offshore vendor, for detailed discussion on this topic read Offshore Accounting Success. This cost is the one time cost and it will be similar to selecting an onshore vendor.

3. Cost of sending the work to an offshore vendor

Small businesses must consider various types of cost like Scanner, High speed Internet, Backup Server, etc, to send their financial and account documents to an offshore vendor, but the good news is that it will be a one time investment and most of the small businesses will have these in place already. There are three different offshore accounting models you can use to send your accounting and financial work to the offshore vendors and for these you will incur following one time cost.

3.1. Scanner & Scanning software

Most of the accounting and financial data will be in your accounting software like QuickBooks, Peachtree etc, but there will be other documents like Bills, Checks, Invoices, Goods received notes, etc will be on paper and these should be digitized using a scanner and a scanning software to convert it into PDF documents which will be stored in your computer. Once the documents are in your computer then you can give access to the offshore vendor to view the PDF documents or they can retrieve it from your computer to perform their work in the offshore location.

Most of small businesses already have a scanner, if not a scanner (scanning software comes with the scanner) can be purchased for less than 00.00. The cost of the scanner will go up based on the volume of accounting and financial documents to be scanned in a given day. It will be a one time cost for the small business and also by scanning all their paper based accounting documents; you can improve the efficiency of overall accounting process.

3.2. High speed Internet Connection Cost

You need to have high-speed Internet connection to send and receive the work to and from offshore location. Again all most all small businesses already have DSL/T1 Internet connection if not they can get a DSL Internet connection for -100/month.

3.3. Secure FTP software

If small businesses are using Application Service Provider (ASP) like Quickbooks online, cpaasp.com, etc, then it is possible for offshore vendors to directly access your accounting data directly from the ASP vendor. In this case there is no need to use secure FTP software.

3.4. Backup Server

Once small businesses start digitizing their accounting documents for their offshore vendors, they need to start planning for the backup server to backup all their accounting documents. Most of the small businesses will have this feature already, if not it is a good investment to have a backup server to backup all their accounting and financial data from their main computer to the backup server. For any business “Business continuity” is a vital task and the backup server will help the small businesses to recover all the accounting data in case of main computer failure.

3.5. Additional Accounting software License cost

Small businesses use various accounting software packages like QuickBooks, MYOB, Microsoft Office Accounting etc, for doing all their accounting and financial work. When they offshore the work the offshore vendor will use the same accounting software to do the work. It is very difficult for the small businesses to find an offshore vendor who already owns the licenses for all the accounting software. As described in the offshore accounting models if small businesses decides to use Remote Server or ASP then there is no additional cost for small businesses. On the other hand if the small businesses decided to use Secure File Transfer then small businesses needs to buy additional accounting software license for the offshore vendor to use. Small businesses will incur this cost even if they outsource the work to onshore vendors. This cost is truly soley based on the accounting software package used by the small businesses. Accounting software packages comes with various flavors types of software licenses like concurrent users, fixed number of users, CPU based, Network based etc., Some times small businesses can completely avoid this cost altogether.

4. Managing Financial & Accounting offshore vendor

Once you send your accounting and financial work to the offshore vendor, you need to constantly mange and monitor the quality of finished work that comes back from the vendor. Initially you may need a full-time person educating the offshore accountants and bookkeepers about your accounting process and preparing proper instructions for them to follow in their work. Once you and the offshore team are comfortable in the working relationship then all you need is to verify the work periodically. Basically you need to consider the offshore team as your virtual team and educate them in your accounting processes and procedures, once you are comfortable with their work your own employee(s) will spend less time with the offshore vendors.

5. Offshore vendor wage

For the accounting and financial work performed by the offshore vendor, small businesses will pay either an hourly rate or a monthly rate to the offshore vendor. This will be the actual direct cost small businesses will pay to the offshore vendor and all other costs are indirect cost of sending the work to offshore vendor. Typically the wage cost will be 50-70% less than the cost paid to the onshore accounting and financial vendor. For small businesses this cost savings is one of the major reasons to use the offshore vendor for their financial and accounting work.

Small businesses need to consider several costs in their financial and accounting offshore engagement. As shown in the table Small business F&A offshore outsourcing – Fixed Cost Vs Monthly Cost some of the costs are fixed and some of them are monthly expanses incurred by the small businesses. Among the monthly cost only the offshore vendor wage is the direct cost paid to the offshore vendor. While performing ROI analysis small businesses must consider all these costs to find the Total Cost of doing business with offshore vendors. As shown in the table, for certain items finding out the exact cost may not be possible and it is highly based on the individual small businesses and the type of accounting and financial work that has been sent to offshore locations. The total cost may not be a fixed amount and it can change from month to month. For example in some months there will be more questions from the offshore vendor in clarifications and in other months there will be less questions, this cost will vary from month to month.