What are advantages and disadvantages of outsourcing accounting services?

Accounting is indispensable to any business, producing or trading goods and services. Currently, the trend of outsourcing accounting services is increasing. So what are the pros and cons when outsourcing accounting services? Why should you outsource instead of having a separate accounting department?

1. What is outsourcing accounting services?

• Accounting service is an organization or individual whose human resources are not under the management of a company or that business that stands to do the work of an accounting department. They are not under the company’s leadership but do accounting work for those companies under the agreement, in principle, a working contract.
• In particular, package accounting service is understood as an overall activity related to business accounting, including all accounting operations such as tax reporting, financial statements, and tax finalization. Package tax accounting service gives businesses maximum benefits while minimizing costs.

2. Outstanding advantages when hiring accounting services:

Lower cost than hiring an on-site accountant.

• The first plus point of hiring an accounting service is cost savings. A modest figure compared to maintaining the accounting department at the company. Not to mention, paying salaries for highly qualified personnel is relatively expensive. In addition, businesses will need to invest in accounting equipment and software to serve their work. When hiring a package accounting service, there is no need, and customers do not need to buy anything because the supplier will actively prepare all.

Having more expertise than hiring an on-site accountant.

• The next advantage is that professional accounting services will always be updated on current accounting laws and regimes. The accounting team is selected with qualifications, capacity, seniority in the industry, and solid skills.

Responsible for solving if there are errors.

• Many businesses are facing many problems arising in accounting, mainly because accounting staff lacks professional qualifications, poor skills, and little experience in accounting. Personnel can also change frequently. Accounting services will always have stability in personnel responsible for solving if errors occur. This not only helps to promptly resolve all situations while at the same time ensuring compliance with the law, limiting penalties for accounting and tax-related violations

Manage documents and data from the server without losing data.

• Data safety cannot be ignored regarding the pros and cons of hiring accounting services. Customers’ trust in using accounting services is also thanks to managing documents and data from the server without losing data. All books are complete and carefully stored. Data or any information about accounting and tax will not be confidential, not to be leaked to the outside. The customer will receive adequate compensation for any malfunction caused by the service provider’s fault based on the contract signed between the two parties

Ready to have a replacement staff if an employee is on maternity or job leave.

• Units providing accounting services usually have a large team of accountants. They always have enough staff to serve customers’ needs at all times. Even if there is an employee on maternity leave or leave, there will be a replacement employee, which will not affect the operation of the business.

A professional data control system and operations

• Accounting services will do all the work on accounting software. The business will be provided whenever needed.

Accounting services have a good relationship with Tax Authorities.

• Businesses need to do a lot of tax accounting work. For example, monthly, quarterly, and annually, businesses need to make VAT reports, PIT reports, PIT finalization reports, pay taxes to tax authorities, etc. For newly established companies, they will have to make a report. Declare and pay license tax to the tax office.
• Accounting services have many years of operation in the field, directly working with tax authorities, so they always maintain a close relationship with them and can complete all tax documents and reports on time and on time.

3. Disadvantages when hiring accounting services :

• The burden of hiring accounting services is that there is no regular staff at the company. Most of the team will work at the office of the service provider company. They will receive documents via email or just come to the business in case of need.

Indeed, accounting personnel will not be able to do many things simultaneously besides the main job of accounting for the company. Usually, only large-scale enterprises have enough financial resources to pay and attract highly qualified accounting personnel. Package accounting services will mainly be suitable for small and medium-sized businesses that do not have the conditions to hire good accountants. Because of:

• The business is newly established and is in dire need of accountants to perform accounting operations and solve complex problems and difficulties in the declaration and financial statements for the enterprise at the beginning.
• Enterprises must consult regulations and decrees related to tax and financial statements that a newly established business has not yet understood.
• Hiring a package of tax accounting services is cheaper than hiring an accountant.
• Frequent changes in accounting personnel, or new official documents and tax regulations, if businesses do not catch up in time, will have to spend a lot of time or more seriously be punished and affect the company’s business operations.

If you are finding for outsourcing accounting services, visit us at CPA Nashville for more information!