How to outsource accounting profitably and safely?

In modern, not the simplest, economic conditions, many entrepreneurs think about ways to optimize costs or transfer costs from fixed to variable. That is, sales volume has decreased – I would like to pay less. Or get much more for the same money.

One option is to outsource accounting. There is a stereotype that outsourcing is only suitable for small businesses. But in recent years, both medium and large companies have been outsourcing accounting in general or certain areas - to increase the return on the function and where the cost of error is high.

However, if you do not take into account various nuances, instead of saving, you can end up with serious problems and even greater expenses. Let's look at how to effectively and safely work with an outsourcing company.

What is included in the cost of accounting for you and how does a company get optimization?

Organization and maintenance of workplaces

This includes renting an office, purchasing furniture, computers and necessary software, as well as paying for utilities, cleaning, etc. A third-party accountant does not need to be provided with a place in the office; the equipment is provided to them by an outsourcing company, which also pays for licenses for professional programs.

Salary and other employee payments

The amount of remuneration for full-time employees, as a rule, does not depend on the volume of tasks they perform. You pay wages and social contributions. When maintaining records by an outsourcer, you pay only for the services actually performed, which are provided for in the contract. That is, if an accountant is 80% busy for 2 months, and only 100% busy for the third month, this is where the savings zone is.

Payment for staff development courses

Changes in accounting and tax legislation occur annually. To keep good records, specialists need to constantly update their knowledge, and it is not cheap. By hiring an outsourced accountant, you get a professional whose qualifications are not paid for by you.

HR costs

If a full-time specialist terminates, gets sick, or goes on maternity leave, she needs to be replaced and the workload redistributed, which wastes the time and resources of other employees. Downtime in accounting or its maintenance by incompetent persons can lead to problems with the tax authorities, fines and other troubles. By concluding a contract with a provider, you can be sure that your business will be serviced continuously.

Thus, when transferring accounting to a third-party company, several expense items are removed from the client immediately. In addition, the company will receive financial benefits due to the quality of service provided.

Outsourcing company:

• It will be responsible for all errors - this is stated in the contract. If, through its fault, the customer receives a fine from the tax service, then the outsourcer will pay for it.

• It is interested in the professionalism of its employees, invests in their training and development of control procedures, and maintains a methodology department.

• It has a large staff of employees specializing in various sectors of the economy. You can choose an accountant who understands the nuances of accounting in your niche.

Another opportunity for saving is identifying reserves in order to reduce the tax burden. Sometimes outsourcing costs are fully recouped through the release of frozen accounts or the return of amounts overpaid by mistake, as well as the legal application of available tax benefits.

An important resource for an entrepreneur is time. By transferring accounting to a provider, the manager can focus on more important business processes.

By concluding an agreement with a third-party organization, you pay for professionalism without spending extra money. The released resources can be spent on developing and strengthening the business. However, bookkeeping by a provider may also have its disadvantages.

Possible risks of working with an outsourcing company and ways to avoid them:

• Risk of increased cost. Usually the provider asks you to fill out a form with your parameters, and based on it, the provider makes a cost calculation. It is more effective to invite the provider to do a mini-audit of your processes, then they will have complete information and will be able to offer you the most accurate cost of services.

• Difficulties in obtaining your account base in case of termination of the contract. It is recommended that the possibility of getting the database back be specified in the contract or that you ask the provider to provide you with a copy of the database on a regular basis.

• Information leak. In general, in such a situation, the provider risks its reputation, it will be difficult for it to attract new clients, so the provider controls leaks more carefully than you yourself, providing for a lot of controls.

How to choose an outsourcing company?

The main criteria, as when choosing any consultants, are long-term successful experience of working with similar enterprises, recommendations from previous customers, employee qualifications, professional liability risk insurance and price-quality ratio. It is also necessary that the contract stipulates a guarantee of maintaining the confidentiality of information.

It is important to have transparent business processes that allow you to control their execution. It is also recommended to study information about the outsourcing company in the press and on the Internet, find reviews, and talk with those specialists who will be assigned to your company.

Don't focus solely on cost. Comparison of several proposals should be based on a comparison of the basic package of accounting support. Companies that offer the lowest prices may have a minimum set of services, and you will have to pay extra for all additional operations.

Rules for safe transition to outsourcing

This process, like any project, can and should be managed.

To do this, both parties form project teams. On the client side, as a rule, it includes representatives of all functional departments that are affected by outsourcing: HR management, financial service, IT department. Financial directors or one of their deputies are often appointed as the project manager.

Exchange of information about the status of the project, discussion of emerging problems and possible ways to solve them should be carried out regularly, otherwise the transition may take a long time.

In terms of time, the companies usually get used to each other from a month to six months, depending on the scale of the business and the qualifications of the provider.

To ensure effective interaction, it is recommended to discuss the following issues in advance:

• Monitoring the work of an accountant. Does the customer have access to the document database and reporting system, is there a clause in the contract regarding compensation for financial losses due to the fault of the outsourcer, etc.?

• List, format and procedure for transferring the necessary documents and databases to the outsourcer, as well as the procedure for organizing document flow, ways of communication, communication channels (main and backup). In a good outsourcing company, each client has its own accountant who can be contacted on all issues specified in the contract.

• Formation of prices for services. What is included in the price, what determines its change.

• Distribution of functions and responsibilities of specialists on both sides.

• Basic procedures to ensure continuity of service provision (for example, in case of delay in providing information from the client).

It is important to remember that the contract and the annex to it must reflect all the nuances relating to the work, including the list of authorized persons, the cost and conditions for the provision of services, the rules of interaction for each service, methods of communication, etc.