2020 was a difficult year for small businesses in the United States, and the pandemic’s impact will have long-term consequences.
As companies suffer from revenue decline and workforce reduction, all industry sectors are compelled to reinvent strategies to keep up with the changing business environment.
An alarming statistics from Yelp’s 2020 Economic Impact Report showed that 60% of businesses that have closed as a result of the pandemic won’t have the financial strength to reopen. The remaining 40% mostly survive on forming outsourcing relationships and adapting to pandemic-driven trends.
Accounting is critical to business profitability and financial health. Thus, accounting experts are in a unique position to assist small businesses in developing plans to help them recover from the economic crisis.
The increasing demand for outsourcing is a reflection of the emerging needs of small businesses for:
- Building innovative lead generation tactics
- Cost-cutting opportunities
- Updating pricing policies
- Changing unprofitable products
This challenge has demonstrated how convenient and efficient remote operations can be.
Types of Accounting Services You Can Outsource
An outsourced firm can handle a wide range of professional accounting services. Here are some of the particular services you can outsource in the accounting market:
- Accounts Payable & Accounts Receivable Management
- Preparation of Financial Statements
- Controller Services
- Bookkeeping Services
- Cost Accounting
- Payroll Processing
- Forensic Accounting
- Tax Reporting and Filing
- Financial Planning and Analysis
Advantages Your Small Business Can Reap from Outsourcing Accounting Operations
Outsourcing accounting operations gives you more opportunities to manage and grow your business. Here are some of the benefits you can reap.
The time to focus on your core functions
Now, more than ever, your leadership must focus on revamping your processes. Delegate accounting work to an expert and you get the time to do the most important functions in your business.
More small businesses opt for outsourced accounting services to save money. Outsourcing the accounting work in your company lowers labor expenses while bringing in skilled professionals with a large pool of resources. Outsourcing can also relieve business owners’ concerns about employee turnover or prospective layoffs.
Hiring professional accounting services can help your business cope with the complexity of tax planning and loans.
Outsourced accounting firms have the financial and regulatory knowledge to help businesses apply for Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). They can also help you understand the updates and modifications that have been recently implemented to the programs.
Maximized security and efficiency in a virtual workforce
With more people working from home in the near future, the accounting outsourcing industry is experiencing a major technological shift. In this virtual age, transitioning an organization from desktop or server-based accounting software to cloud-based accounting software empowers business leaders and employees to have secure and remote access to their company data.
Well-designed tax strategy
2021 is not the year to miss out on applicable tax credits, particularly pandemic-related tax credits.
The increased disclosure requirements has pressured firms to keep their tax returns error-free. Meanwhile, businesses who do not have a tax consultant on their side are not taking full advantage of all of the tax deductions that they can avail.
An online accounting firm will ensure that your business tax return is properly submitted and you receive every tax benefit that your company qualifies for.
Final Thoughts: Benefits of Outsourcing Accounting Services
As small businesses respond to the new challenges in an unpredictable economy, their day-to-day operations must also develop. Outsourcing accounting has become a practical choice and can improve financial operations by combining the necessary technologies and expertise of a reputable accounting firm.
To learn more about how professional accounting services can help your company scale, contact Today CFO for a free consultation.