Bookkeeping and accounting transactions are required by law. It is one aspect of running a company that management cannot get away from. Yet, when it comes to outsourcing services, bookkeeping, payroll and other accounting transactions are the first ones to go. More and more companies opt to hire independent accountants or freelance bookkeeping firms to address their accounting services requirements.
Companies that have outsourced their accounting services observed that securing an accurate and timely financial information is economically viable that having and maintaining an in-house accounting department. Human resource related expenditures and operating expenditures are lowered. Recruitment and placement fees, training of new staff, and the purchase of accounting software and its subsequent upgrades are eliminated. Supply, equipment, and utility cost are significantly lowered. Financial fraud and tax fraud risks are minimized as well.
One circumstance that’s true to the point is the difference in the fidelity of and compliance to statutory requirements. In-house accountants risk the name of the company when preparing GST submissions and payroll services. Outsourced accounting firms risk the name of their own company when preparing the same documents. Negligence and imprudence of in-house accountants is a risk for the company; while violations to accounting laws committed by freelance bookkeeping firms absolves the company from direct liability.
However, choosing the right accounting firm to entrust your financial files can be a tedious process, but equally rewarding. Management needs to select which, if not all, of the company’s accounting transactions will be outsourced. Among the most common are accounts receivables, accounts payables, financial statement preparation, Goods & Services Tax or GST submission and payroll services Singapore.
Decide whether the services will be passed on to freelance bookkeepers, independent accounting firms within the locality or offshore online services. Seek out references and recommendations from colleagues, and make a short list of potential candidates. Contact each of those on the list and request price quotations for various services. Demand to check eligibility certificates and operating licenses from the candidates. Be sure that the certificates and licenses are still valid and is issued to the firm or the accountant. Demand the same requirements from online accounting services. Although the professional fees tend to be lower for offshore online service, the accountant handling your company may not have the necessary training or certificate required by your government. Finally, set up regular monitoring scheme with the firm whose services you will hire, parameters for error and submission deadlines should be made part in the agreement. The monitoring procedures may be less extensive than an in-house accounting department, but do not leave financial documents to chance. Trust the firm you hired but not to the point of complacency.
Once the company established a tailor-fit relationship with the firm and gets the accounting services handled by competent independent entity, management can concentrate on the more important aspect of the business, like expansion and increased sales.