Outsourcing, especially when a firm specializes in a business operation, saves time and increases efficiency by employing experts at a lower cost than if you hired full-time personnel with the same skills. Unless your business warrants hiring full-time experts, putting a less skilled employee in charge of technical aspects of your business means you lose efficiency and effectiveness. Outsourcing is critical for every business to master if they want to optimize performance while saving money. Below, you can see a comparison between hiring marketing employees to manage digital marketing and using an agency. Today, I’ll talk about automated accounting as a means to lower costs and improve record-keeping.
Streamlining your finance and accounting functions provides up-to-date information while helping you reduce interest or other disruptive expenses you incur when you don’t manage your accounts payable effectively and income loss from not managing your accounts receiveable well. Most suppliers offer a discount if you pay for material within a short period after you receive them — usually 10 days. If you extend payments beyond the 30 days commonly allowed, you may incur excess expenses for your tardiness. You might also find your supply disrupted for non-payment, meaning your ability to make money is impaired. Hence, maintaining meticulous records is your first line of defense to avoid these negative consequences.
The best way to manage your financial recordkeeping is using accounts payable automation software that takes your records, enters them into your books, and reminds you of critical payments due. You don’t need piles of documents all the time, but you do need a reliable way of making your finances work for your business. If you want to do better with your finances in your business, then the best thing to do is look at how you can automate your accounting department and make it work better for you all around. Below, we put together some of the top reasons that you should automate your accounting department going forward.
1. Automated accounting improves efficiency
Your time matters in your business, and as a business owner, you must hink about how you spend your time since time is finite. Spending time on one task means you have less time to spend on other tasks. Unless you run an accounting business, your main goal is to deliver some product (good or service) to customers and ensure you provide value, not spending hours slaving over your books.
But, accounting is important, as I said above. So, you can’t just ignore this function. Plus, there is so much more to accounting than just crunching those numbers and if you automate your accounting recordkeeping, you ensure compliance and manage your money efficiently without the risk of human error. Automated accounting helps you create a budget to help you optimize your tasks and you can create financial projections and statements that guide your other plans and activities. With the right practices and processes, you can ensure that your accounting is working the right way.
Plus, every business faces a host of compliance requirements from tax reporting to providing investors and lenders accurate, up-to-date financial information. With automated accounting, these records require a few keystrokes rather than a major effort.
2. Reducing your costs
As a business owner, you know what it’s like to manage your money as you go through the year sometimes borrowing from Peter to pay Paul. Not only must you manage your accounting records to ensure you pay your bills on time, but you also want to save money on a function that doesn’t directly contribute to your main goal, which is providing value to customers. When you automate, you can forgo many of the expenses that come with candidate recruitment, and automation is much like outsourcing; letting someone else handle it all. Cost reduction is a must and outsourcing your accounting can help you with this.
3. You’ll improve income
When you automate or when you outsource your accounting, you save money while earning more of it at the same time. With the right time investment in the right places, you can improve your profitability and increase your overall profit share. You can maintain a much more flexible schedule and this improves the level of service that you can give to your organization and its customers. You can also concentrate on the formulation of much simpler, better strategies this way.
4. Invest in skills
Are you planning to outsource your accounting team? If so, then you have to make the right investment in skills and a company that uses the right automation software is the place to invest. Accounting isn’t something you can fake, especially given the reporting requirements and it isn’t something you can hand off to just anyone. You can access a much larger pool of global talent when you outsource and invest in the right skills, too.
5. Reduce your risks
One of the most important things to remember about manual processes in accounting is that there is a high risk for human error. We all make mistakes but an innocent numerical mistake could ruin your business. Instead of allowing this to happen, you can outsource to a business that knows how to automate accounting processes, which makes a massive difference in the frequency of errors. Notice the role of compliance risk on your business operation as depicted below.
6. Reduce fraud issues
Did you know that 42% of cases of fraud in a small business are caused by a lack of internal controls? That’s not your fault, not directly as you’re trying to run a business. However, you can avoid this and learn to depend on the right companies and employees where possible. If you choose a company that automates financial decisions and processes, you can choose a company that is going to work on ensuring that you don’t have fraud in your business.
7. Better security
Outsourcing your accounting is smart if you are looking for security, but automation is another element of that process. You must safeguard your business as much as possible and your cash flow and financial performance matter here. You don’t need to manage in-house accountants if you outsource properly and you can use the right software to keep on top of your accounting, too, and it’ll be much more secure, too.
Remember, you also likely have sensitive customer records and you are obligated to protect their privacy and security, as well.
8. You’re embracing technology
When you automate, you step into the new age with technology. You should also think about the fact that technology used by your outsourced firm allows you to optimize performance. When you entrust a piece of your business to another company, you embrace a whole new area of your business that might help you add technology to other aspects of your business to further improve efficiency.
You get the right information at the touch of a button with automated accounting. Automated information and data are easier to access than manual processes and automation.
9. You scale your business
Whether you outsource or automate, you are going to be able to scale your business up and let it grow. Growth is a must for your business’s future and you don’t need the whole intensive recruitment process when you scale because it all happens online. You want to meet your profit goals and automated accounting is going to help.
You want to keep on top of your business accounting and automation is the key to helping you to get there.
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