Outsourcing Accounting Services For Small Business

Outsourcing Accounting Services For Small Business

There are several benefits of outsourcing accounting services for small business. One of them is that you will save extra money when compared to hiring a full-time accountant because hiring an In-house accountant can be very expensive. This makes scaling up your business a lot easier!

What Is Accounting Outsourcing Services?

Outsourcing accounting services is the long-term contracting of a company's bookkeeping and accounting needs to an outside service provider, helping to increase shareholder equity by reducing the costs of non-essential functions and increasing productivity.

Signs You Need To Outsource Your Accounting And Bookkeeping Services

What are the reasons for outsourcing accounting services? You need to outsource your accounting and bookkeeping services or choose online CFO services if:
  1. You are spending too much time on your books while neglecting other aspects of your business
  2. You are cutting corners because you don't really understand how to maintain proper bookkeeping
  3. You want top-notch accounting, but it's either too expensive or you don't need full-time accounting services
  4. You need "at a glance" financial reports to stay informed about your business
  5. You are not afraid to ask questions about financial information you don't understand
  6. You want the flexibility to check your accounts anytime you’d like, in addition to the peace of mind that your books are kept by skilled professionals.

Basic Tips For Outsourcing Accounting Services For Small Business

While outsourcing accounting and bookkeeping services is becoming more popular among business owners, many of them are still cautious of this practice. This is a good thing because you can’t just hire the first accountancy firm you find online via search engines or act on a recommendation! Also, you need to take the right steps from the beginning to make your relationship with an accounting outsource firm work.

However, if you are ready to join millions of business owners in outsourcing accounting in the Philippines and bookkeeping services, here are five tips that will be helpful in the process of outsourcing accounting services

1. Identify Your Area of Needs

There are various functions involved in accounting and there might not be need to outsource all of them. A good idea is to understand your needs so you don’t end up spending much money on outsourcing finance and accounting services.

Outsourcing accounting and bookkeeping services can be classified as highly skilled, specialized, or repetitive. For instance, you may want monthly expert advice on finances, IT support for your accounting network, or help with payable or shipping inventory. When deciding on the tasks you wish to outsource, list your priorities and keep your budget in mind.

2. Be Clear about Your Expectations

Closely look at your current accounting system and check what stresses you the most. Consider your business goals and what you’re trying to achieve by outsourcing your accounting services. Maybe you want a better reporting system or you want to keep track of cash and profits effortlessly.

Oftentimes, outsourcing works fail as a result of imprecise requirements and unclear magnitude of the work. Being clear about your expectations will keep you aligned with your company’s standing and give your outsource partner a direction to work. You certainly don’t want to let the outsourced team do their job and later discover that the original problem remains even after six months!

3. Choose Expertise over Competitive Pricing

Once you have a clear idea of what you want, it will be easier to choose an outsourcing firm that can take care of your company’s accounting needs. You have to understand that accountancy professionals have their strengths and weaknesses too, and are on different levels in areas of knowledge, experience, and expertise. Furthermore, accountancy firms may offer various services or specialize in a particular role.

Remember that quality is not cheap, so even though you’re trying to reduce costs by outsourcing services, don’t settle for less. See qualified professionals and established firms as a long-term investment which will yield profit.

4. Remember Security

It’s unlikely that you will forget security, as most businesses are hesitant to outsource their accounting because of growing concerns over data security. However, you only have to be as careful as you would when hiring an in-house accountant!

Prevent financial fraud at an early stage by checking references and making sure that the outsource providers meet basic compliance standards. Talk about what security arrangements they put in place and clear all your doubts before taking a decision. First and foremost, you need to know the type of network security they have in place, what encryption methods they use on their websites and login portals, and what measures they take to monitor location and data broadcasting.

5. Communicate Well

Effective communication is important in all business dealings, but since cost-cutting and improving bottom lines is the goal of outsourcing, it’s easy to lose focus of what’s important. Always get your message across clearly, whether you are talking to potential outsource partners about your company’s specific goals or discuss security issues. And always clarify when you are in doubt about a particular thing!

Even when you focus on a firm that fits your business, maintain healthy communication. Convey messages through established channels; this way, both parties involved know what to do when there’s an urgent need to clarify matters. Make sure that your company and your outsourced partner are on the same page on all aspects of your business.

Convey regular meetings and communicate relevant information on a global level. This is where cultural differences come into play, so do your homework and take a proactive approach to addressing problems.

What Accounting Services Do Small Businesses Need?

Some important services provided by bookkeeping and accounting firms include accounts receivable, accounts payable, bank reconciliation, credit sales reconciliation, financial statement preparation, and accounting write-ups. 

Other bookkeeping services rendered include payroll, small business tax preparation, reconciliation of bank accounts and credit card statements. Bookkeeping firms can handle clients’ basic accounting tasks before transferring the information to CPA firms for more difficult tasks.

What Accounting Services Can Be Outsourced?

The top 8 accounting services that can be outsourced include:
  1. Tax accounting services
  2. Preparing financial statements
  3. Book-keeping
  4. Bank reconciliation
  5. Payroll processing
  6. Accounts payable
  7. Accounts receivable
  8. Forensic accounting services

Tax Accounting Services

Filing year-end tax returns is one of the most common reason a small business will use an accounting firm or CPA. While this is an important service, there are several small-business accounting services that accountants and bookkeepers can offer a business. These can help save time and make sure the job is done right, such as tax reporting rules and deadlines for sales tax, payroll tax, 1099, income taxes, etc.

Preparing Financial Statement

Preparing financial statements like the income statement, cash flow statement, and balance sheet is something that many small business owners overlook. These are important financial documents that give business owners the financial reporting data they need to run their business. It is the duty of an accountant to prepare these statements, and help you understand the it so you can make better business decisions.


Bookkeepers can enter all the day-to-day transactions of a business in the necessary books to make sure proper financial statements and that all expenses are being carefully deducted.

Bank Reconciliation

Bank reconciliation means settling all the dispute between the bank statements and the books of account. Bank reconciliation services ensure that all financial transactions are correctly recorded in the books and alert the business owner to potential fraudulent activity happening in the company.

Payroll Processing

Payroll has to do with salaries of staff of the business. Payroll services handle properly paying employees salaries, submitting withholdings, and paying state and federal payroll taxes depending on the laws of the country.

Accounts Payable

At some point, every company will buy goods and services from another companies, sometimes on cash or on credit. Missing a payment, paying twice for a particular good or service, or paying illegitimate bills are costly mistakes made by businesses. General accounts payable services offered by accountancy firms include bill sorting & organization and making payments, etc.

Accounts Receivable

Accounts receivables are financial obligations a business is to receive from other businesses in a particular period. Collecting accounts receivables faster means less cash tied up that can be used for other things. Accounts receivable outsourcing services will help small businesses in getting paid faster, increase collection rates, and faster processing of invoices.

Forensic Accounting Services

Hopefully, your business will never need this service. However, forensic accounting is used to discover fraudulent activities going on in the business, with embezzlement being the most frequent.

Benefits Of Outsourcing Finance And Accounting Services

As a small business owner, with intentions of outsourcing your accounting services, you might be asking "what are the benefits of outsourcing accounting and bookkeeping services?" to know what you stand to gain from outsourcing.

I can tell you from experience that there are several benefits of outsourcing accounting services for small business, but we are going to discuss few of them. Hence, here are the top 10 benefits of outsourcing finance and accounting services.

1. You Will Save Money

There is a usual misunderstanding that outsourcing non-substantive functions cost you a lot more than managing the processes internally. But some small businesses, it is not economical to have an accounting department or hire a full-time accountant or bookkeeper.

2. You Will Save Time

As a small business owner your main focus is on ways to make more money for the business. Whether you’re an expert at selling medical equipment or your true passion is crafting gluten-free baked goods, concentrating your time on bookkeeping is time-consuming and subsequently money - and subsequently money - away from your aim of going into business at the outset. But when you outsource non-essential functions, you’ll feel the financial weight taken away from your shoulders.

3. Availability Of Timely Financial Advice

If you’re leaving the majority of your accounting functions to year-end tax season, you’re allowing a gap of 11 months without financial advice from an expert.

Outsourcing your bookkeeping to an accounting firm will allow you to have a customized bookkeeping process that works for your business, and a team of professional bookkeepers managing your day-to-day financials. You'll be equipped with useful, actionable financial facts to make sound business decisions.

4. You Will Understand Your Cash Flow

Knowing when and where your money is coming from can help you make strategic business decisions for the long-run. For instance, if your company functions within the wedding sector, then the summer is your busiest season. But are you losing money on excess staff during your quieter months? A reliable bookkeeper can assist you understand where you are losing money, and where you should focus your investment.

5. Reduced Year-End Accounting Bills

If you’re managing your own books until tax season and then passing things off to an accountant, chances are your year-end bills will be pretty high! By keeping proper yearly records, you will save significantly during filing taxes.

6 Access To Tax-Saving Opportunities

A reliable bookkeeper will always have your best interests. As a small business owner, you may not even be informed of the tax saving opportunities available to you. Are you recovering all the GST that you’re spending? Leave the number-crunching to the tax experts.

7. Up-To-Date Financials

Keeping an accurate and up-to-date financial information reduces innumerable headaches on the long run. A good outsourced bookkeeping partner will make sure that the data in your accounting software is entered correctly and kept up-to-date at all times. You'll always have someone staying on top of your numbers and committed to delivering regular monthly financial statements.

8. Reduced Audit Headaches

Anyone can be audited, and it is stressful even in the best-case scenarios. Knowing that your books are up to date and carefully documented can relieve almost all the headaches associated with an unexpected audit. A good bookkeeping service will properly document and record your financial information, helping you scale through the auditing process without stress.

9. Access To Easier Life

When it comes to owning and operating your own business, you’re always busy! Managing employees is time-consuming; an outsourced bookkeeping service provides you with a set-it-and-forget-it service.


Outsourcing finance and accounting services is a great way for businesses to enhance operations while cutting overhead costs. If you’re looking to streamline processes, raise your finance team, and grow your business, partnering with an outsource firm that can take care of your accounting needs is a good step in the right direction.

That being said, you will have to put in more works to make outsourcing work for your business. Take into consideration the tips mentioned in this article, and you are on the right track to establishing and keeping a productive relationship with your outsource partner.
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