Accounting is one area which every company has to maintain but mostly not part of their core business. It is also one of the areas that keep changing every year and the company has to aggressively keep up with the changes in the tax code. This includes managing your books till you finish up with paying taxes. For a company to survive in an environment where mistakes are costly and dependent on how well they can play the accounting game correctly, they should have an outstanding accounting department. This could either be in-house or completely outsourced to some good service providers.
Accounting is a critical component of your business and care should be taken to employ the best and the bright. These accountants should be ahead of every tax and book keeping game. They should stay abreast with every tax code changes. More so over they should be capable of finding ways to save more for the company. But having an in-house team for this is often very costly given the price of publications to subscribe and the time it takes to go through complicated laws. The best would be to outsource this task and have a limited in-house staff to oversee the operation. This is one area where a separate expert entity makes a lot more sense and you can rest assured that the team is keeping up with the changes and saving you money and help you run the core business without distractions.
Here is the top 5 list of accounting areas that you should outsource to the experts:
1. Book Keeping: this involves maintaining your sales ledgers, purchase ledgers and cash books.
2. Payroll: This is a lot complex than you think, choosing the right software and constantly keeping up with the tax codes is by itself a very complex task. In this age the base salary is just one component, the majority is based on performance and achievements. These factors are highly volatile, and add a different equation to payroll processing. Outsource this first if you have more than 20 employees.
3. VAT: Value added tax is one of the very complex tax regimes which every company should seek advice with professionals. The customs and excise is a very task intensive area and having in-house experts for small companies who do a lot of imports and exports is a costly misuse of scarce resources. You should find out the folks who can keep up with the complex tax changes and who can ensure the returns you file are accurate without any overpayments or underpayments. The overpayments are one time loss, but underpayments will come back to haunt you.
4. Financial Accounts: The financial accounts should be maintained and shown at very strict time limits. This is usually a race against time. If you have an in-house team, they may perform this well in normal situations. But sometimes there may be some audits where the time to resolve issues will be a big pressure point and your in-house staff cannot just take it. It is better that a good service provider manages this area for you.
5. Company formation and corporation law: This is one service which is wildly popular for its outsourcing ability. You can easily get the services of a good company to take care of the company formation and registration aspects. You need someone to talk to the tax authorities on your behalf. They should also be very well versed in the particular industry segment your company is in. This ensures the tax opportunities and relief available for your company can be fully utilized and proper structure could be employed.
There are a few more that could be outsourced but these are the major areas you may want to evaluate in your next board or company meeting.