10 Accounting Tasks You Should Outsource
July 14th, 2022 by David Martin
There are numerous advantages of outsourcing accounting services for your company. These advantages include saving money by reducing the operation expenses because having an in-house accounting team costs a lot more money than simply outsourcing or streamlining business operations by rapidly improving the business efficiency among others. Below are the top ten accounting tasks to outsource.
1. Payroll Journal Entries
Payroll is not just limited to paying your employees. It involves lots of paperwork that can be demanding for your business. Outsourcing your payroll processing ensures that your employees are paid accurately and on time. Accounting experts also ensure that your business remains compliant with all the regulations that govern payroll processing. These processes include recording and processing employees’ bonuses, compensation, wages, taxes, and commissions
2. Bank Reconciliations & Credit Reconciliations
Businesses deal with lots of payments, receipts, checks as well as bank deposits/withdrawals regularly. It is very common to have irregularities in these transactions. The discrepancies should be investigated monthly and reconciled. The process of reconciling these discrepancies takes time and consumes lots of resources. Inventory reconciliation also consumes a lot of time and money.
3. Monthly Inventory Reconciliation
Outsourcing reconciliation tasks to a professional accounting firm not only helps save time but does away with the work involved. The outsourcing professionals utilize real-time tracking together with their professional skills for reconciling all the inventory within your company.
4. Timesheet Entry for Payroll
Timesheet entries for your payroll can be very tasking because they are used to track the time a particular employee has worked during a specific period. Outsourcing this to a professional helps you sufficiently track leaves, work hours, accruals, as well as any adjustments for processing payrolls. Owing to the competitive nature of outsourcing firms, they make sure to use elaborate tracking software with a trackable workflow for payroll approval. These timesheets are a valuable tool for management accounting. It helps you as a manager to record the beginning and end of each task.
5. Data Entry
Data entry is one of the most important activities for the development of every business although its importance is always underrated. Accurate data is the backbone of every business, data entry requires unique and efficient skills that enable companies to maintain accurate and up-to-date records from contracts to invoices. Outsourcing this task helps alleviate the stress associated with data entry because it is tedious and time-consuming.
6. Accounts Receivable (Invoicing Clients)
By outsourcing accounts receivable, companies can free their employees to work on their products and services. The individuals who create the product or offer the service will not spend valuable time maintaining the billing system and chasing down payments. Outsourcing enables the company to operate essential but non-product functions on a tight budget.
7. Accounts Payable (Paying Vendors & Bills)
Many companies struggle to maintain the manual accounts payable processes. Outsourcing this task will help alleviate the stress and increase the efficiency of a ballooning accounts payable department.
Companies with expanding headcounts may not struggle with an increase in paperwork because outsourcing the accounts payable makes everything efficient. You get professionals to work on digital records, communication, storage, and issuance of payment. Outsourcing is more efficient because it uses early payment terms that reduce costs. Companies also enjoy easy reconciliation and monthly close.
8. AP and AR Aging Review
Outsourcing this task ensures customized AP & AR reports. Customized AP and AR reports offer much better insight into the timing of your remittances. Outsourcing professionals also take into account the amount, collector, salesperson, and region when it comes to AR. Such customization can help your company spot external vs. internal issues in your accounts receivable procedure.
9. Filing Sales and Use Tax
Sales and use tax refer to the percentage of the tax price of sale that is collected by a consumer or a merchant and remitted to the government. Almost all the transactions of goods and services come with an added charge for sales and use tax. For a company, overpayment of the
sales and use tax are additional costs, and the efficiency of regulating these costs aligns with the effective financial management of the company. Outsourcing this task can help streamline everything thus saving the business a significant amount of money.
10. Booking Prepaid Accruals: Insurance, Rent, Deposits, and Retainer
A prepaid accrual is initially recorded as an asset in a business balance sheet and accounting books. This means that even if the expense has been settled upfront, it is still taken as an expense. Outsourcing will make sure that your expenses of a prepaid purchase are recorded in the accounting period so that the benefits of the purchase are realized. If the product or service covers several periods, then this expense is allocated throughout that period. Outsourcing this task ensures proper filing of the prepaid accruals. This will ensure that the initial entry showing the prepaid accrual will not affect your businesses’ financial statement whenever the service has not been received.
11. Cost Accounting
Cost accounting is crucial for businesses in industries like constructions that receive large periodical payments and have to plan for multiple cost streams. They may use different accounting spreadsheet systems to speed up the work and ensure their cost structure matches the chart of accounts in their software. Outsourcing the creation of the cost templates, automation and execution can ensure they will stay consistent and useful for managerial accounting. On top of tracking supplier and material payments they may also provide insights about margins, cash at hand and even allow benchmarking against industry peers.