Managing the resources that go into accounts can represent a real Catch-22 for small and medium businesses. For many companies, a full time accountant is simply not financially feasible. Responsibility for issues like VAT returns and billing then falls to managers or directors.
Managers and directors are typically occupied reacting to more pressing matters and so these accounting responsibilities tend to be put off. This results in
Outsourcing Accounts
The challenge then for small businesses is to leverage the accounting resources they do have more effectively. One way they can do this is by outsourcing some of their accounting requirements or through the use of management accounting services.One of the key benefits of outsourcing accounts for smaller businesses is that they can get support in the particular area they are struggling with rather than having to outsource all of their accounting requirements.
Payroll
The relatively complex requirements of payroll can be a challenge to meet, particularly for small companies . However, failing to get payroll in on time is not an option for businesses that wish to keep running. Outsourcing payroll relieves this pressure at a cost that is far less than that of failing to meet payroll.
Billing
Unlike payroll, billing is far easier to fall behind on. No one is going to urge you to send them bills. However, falling behind on billing severely disrupts cash flow which can lead to other more serious problems such as being unable to meet payroll. Outsourced billing will keep a healthy cash flow that allows a business to meet its obligations and grow at a steady pace.
VAT Returns
This is another accounting requirement for small businesses that often goes on the long finger due to lack of resources. Unfortunately, filing late VAT returns can result in fines from Revenue which in turn leaves even fewer resources to put into accounting.
Management Accounting
For larger, medium sized businesses where full time accountants are on staff, a similar resource gap occurs. Standard obligations such as payroll, billing and VAT returns are all met but these typically use up all of a company’s accounting resources.
This means accountants do not have time to provide their skills and knowledge to the overall running and development of the business. Management accounting services provide businesses with expert accounts analysis and advice that helps them to better evaluate their situation and make more informed decisions.
Services might include preparing bi-monthly or quarterly reports to determine whether a company is in profit or loss. This provides immediate information rather than waiting for an annual audit from the accounts department when it might no longer be useful.
Management accounting services might also include providing a business manager assistance in negotiating with their bank or other financiers. A company’s in house accountant might be very experienced in carrying out their ordinary accounting duties but may not have adequate experience in financial negotiations.
Use Resources Strategically to Grow Your Business
For developing businesses, outsourcing specific accounting tasks can be a highly effective means of meeting their accounting requirements without having to take on additional staff. Companies can target their resources very accurately to the areas where they can provide the optimal benefit and return.
Consider what areas of your business’s accounting needs could be managed more efficiently through outsourcing.
Images: ”Outsourcing concept with interface and world map on blue background / Shutterstock.com“
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