Top Benefits of Outsourcing Back-Office Accounting for Small Businesses

Did you know, around 37% of small businesses outsource at least one essential task? And with good reason; outsourcing essential tasks provides the opportunity to save time, reduce costs, and boost efficiency. When considering back-office accounting, outsourcing is one of the shrewdest moves a business owner can make to achieve their long-term financial goals.

6 Key Benefits of Outsourcing Back-Office Accounting

Let’s look at 6 key areas where outsourcing back-office accounting tasks yields the best results, backed by solid data.

1. Bookkeeping: Say Goodbye to Data Entry Drudgery

Bookkeeping is a critical but time-consuming task. One that most business owners tend not to enjoy. It is estimated that around 70% of small business owners admit to being overwhelmed when it comes to managing their bookkeeping.

Outsourcing offers them the chance to save time and drastically reduce the frequency of errors. A professional bookkeeping service typically lowers the rate of error by as much as 50%, ensuring that financial records are accurate and updated without you having to worry about the details.

2. Payroll Processing: No More Payroll Headaches

Payroll is a complicated process requiring high levels of precision and little room for error. A study conducted by the National Small Business Association uncovered that more than 60% of small businesses manage their payroll in-house with over 45% of small business owners reporting payroll errors each year. These mistakes often result in fines or disgruntled employees.

Outsourcing payroll processing allows you to eliminate these headaches. Payroll outsourcing services significantly decrease payroll errors and save business owners around 80 hours per year; time that can be devoted to other areas of the business, allowing business owners to focus on scaling their business.

3. Accounts Payable & Receivable: Smooth Cash Flow, Happy Business

Maintaining cash flow is a crucial aspect of any business. Mismanaging accounts payable and receivable is one of the main reasons why 82% of small businesses fail as a result of rising cash flow problems, as reported by a recent U.S. Bank Study. Outsourcing accounts payable and receivable helps to ensure that cash flow processes are smooth and streamlined. Businesses that outsource these tasks claim to experience at least 30% faster invoice processing and markedly fewer errors.

4. Financial Reporting: Clarity at Your Fingertips

Good business decisions depend upon accurate financial reports, however, 50% of small business owners claim they do not completely understand their financial reports. Leading to misinterpretation and resulting in poor decision-making.

Outsourcing financial reporting offers expert, data-driven insights that are simple to understand and digest. In fact, businesses that outsource their reporting functions typically benefit from up to 40% more accurate financial forecasting.

5. Tax Preparation: Avoid Penalties and Audits

Tax laws are complicated and continually evolving, making tax preparation a stressful and daunting task for any business owner. In fact, around 40% of small businesses are liable to pay penalties for incorrect or late tax filings.

Outsourcing tax preparation enables businesses to remain compliant and avoid penalties. Companies that outsource their tax functions are 31% less likely to be audited and it also helps to cut down on tax preparation time by as much as 50%, freeing up resources to be deployed to other areas of the business.

6. Bank Reconciliations: Match Numbers Without the Hassle

Bank reconciliations are a crucial task that should be handled with utmost care and precision in order to avoid fraud and errors, however, that requires a considerable amount of reconciliation knowledge as well as demanding a great chunk of your time. Around 43% of small businesses are reported to be behind on their bank reconciliations.

Through outsourcing, businesses can ensure their finances are clean and accurate without giving on any of their time. Outsourcing firms tend to complete reconciliation tasks 60% quicker than in-house staff, ensuring timely and accurate financial statements.

Final Thoughts

Outsourcing back-office accounting tasks is a game-changer for business owners. From decreasing errors and improving compliance to improving cash flow and significant time savings, the stats paint a very compelling picture. If you’re ready to optimize your operations and focus on growth, you should consider outsourcing as your next best move.

befree Global has been delivering high-quality back-office accounting support to our clients for two decades now. With a roster filled with highly qualified and seasoned accounting and finance professionals on our books, we’ve helped our clients navigate any and all finance, accounting, and bookkeeping tasks with ease and accuracy.

To learn more about how befree Global can help your business, submit the enquiry form, and one of our executives will get in touch with you shortly.