The Benefits of Outsourcing Some Accounting Tasks
Posted 20 hours ago by Alison
It's easy to underestimate the time and effort that goes into maintaining small business accounts. From managing cash flow to paying taxes, numerous regular activities must be carried out to keep the business ticking over, and that's before you start thinking about those accounting activities that can help you delve deeper into how your business is performing and what its future may look like. It's likely that at some point, you'll start thinking about outsourcing some accounting tasks to professionals. But what tasks can you outsource, and what benefits will it bring your business?
What tasks should I outsource?
This one is entirely up to you. You may need help at specific times, such as key reporting periods. In this case, you could handle core functions internally and call on an external accountant to handle your VAT returns. Or it could be that you don't have an internal accounting team, which would make more sense to outsource everything. Having an idea of the kind of support you need before you start looking for an accountant will make the process easier and make sure you get the right person on board from the start.
How to outsource your accounting function
Once you know what support you need, it's time to start looking for someone who meets your criteria. A good starting point is to look online for small business accountants in your area that offer the services you need. You'll likely have plenty of options here, so take the time to read reviews, check their qualifications – look for UK-recognised bodies such as ICAEW, ICAS, CIMA or ACCA - and see if they work with businesses like yours.
Once you have a shortlist of practices that fit the bill, get in touch and gather quotes. If they're local, it's also worth meeting them in person—the more you can be sure they fit your business needs and work in a way that suits you, the better your chance of building a successful long-term relationship.
Once you find the right accountant, you'll likely receive a contract detailing the work they've agreed to do, the fee you'll be paying and any other important information. Be sure to read this carefully and ensure it covers everything you need. It's then a case of ensuring your accountant has all the information they need, such as access to bank statements, bills, invoices, receipts, previous accounts, etc. Once they have access to all of this, they can start to manage your accountants.
The benefits of outsourcing accounting tasks
Cost savings
While you may think that outsourcing could be expensive, in most cases, it'll be more cost-effective than hiring an in-house team. This is because you'll save on the costs of having an employee, such as national insurance and pension contributions. You'll also save on overheads, such as hardware and office supplies.
Eliminate the time and costs of hiring
While it will take some time to find the right accountant for you, this will be much less than the time – and costs – associated with hiring someone to do the job. Placing job adverts, looking at CVs, conducting interviews and then training someone up all take time that you could be using to develop your business elsewhere. You cannot guarantee how long someone will stay with the business, so you may need to repeat the process sooner than you'd like. And, with the cost of hiring someone well into the thousands of pounds on average, you can save some serious money.
Saving time
It's not only the time associated with hiring someone that you'll save. By outsourcing your accounting tasks, you'll also save significant time on a day-to-day basis that you'll be able to spend focusing on your business. Your employees will also be less constrained by admin tasks, and there'll be business continuity benefits, such as you won't have to worry about covering holidays or sickness. In addition, you won't need to train and manage an internal team, which will further contribute to business efficiency.
Gain access to experts
In any area of business, having access to experts is always a huge benefit, and accounting is no different. Not only will an accountant take away those regular, time-consuming tasks such as managing expenses and invoicing, but they will also have detailed knowledge of tax and financial accounting. This can give you confidence that you will always be compliant with any changes in legislation and that you're fulfilling all your legal obligations when it comes to reporting and paying taxes. It will also drastically reduce the chance of you making any mistakes and allow you to gain further insight into your business, making planning for the future more accurate.
Automation technologies
By working with an accountant, you'll also be able to utilise the technology they work with to further reduce your burden of maintaining accurate financial records. For example, most accountants will utilise cloud-based accounting software so all parties can access the most up-to-date financial information available at any time. The systems will also scale as you grow, so you won't have to worry about upgrading them in the future.
Further Reading
2024 Spring Budget: What does it mean for small businesses?
A Guide to Sick Pay for the Self-employed or Company Directors