What are the types of internal audits?

Internal audits can include operational audits, compliance audits, financial audits, forensic audits, IT audits, and environmental audits.

What are the key standards in internal audits?

The key standards include independence, objectivity, proficiency, quality assurance, and communication.

What is the risk-based approach in internal audits?

The risk-based approach prioritizes auditing high-risk areas within an organization to focus resources where they are needed most.

What are the 5 C's of internal audit?

The 5 C's are Control, Compliance, Cost, Consistency, and Communication, which are critical for a successful audit process.

How does an internal audit help in risk management?

Internal audits help identify and mitigate risks by ensuring that internal controls are effective and that the company complies with laws and regulations.

4 Important Outsourced Accounting Service Benefits You Must Know

Published on December 23, 2021

Small businesses or start-ups—especially new ones—find it challenging to hire an accountant. Particularly with the right abilities to set up their company’s fiscal reports, oversee ledger tasks, break down financial data, and create outgoing invoices.

According to a survey, more than 1/3rd of start-ups are adopting outsourced accounting services. Curiously, most small businesses—opting for the outsourcing of account-related tasks—do not feel confident and comfortable carrying out accounting tasks independently.

So what exactly is an outsourced accounting service? In simplest terms, it is a service that gives a whole accounting department experience for private ventures. An accounting department comprises the handling of transaction coding, accounts payable and receivable, payroll management, financial reporting, and several others. Typically, this service provider comes with a team of accounting professionals, enabling them to offer a couple of accountants at a lower cost of hiring.

This blog aims to highlight the benefits of outsourced accounting services. To achieve this, we will cover the following topics in detail.

What is outsourced accounting?
Difference between outsourced accounting and in-house accounting
Top 5 outsource accounting benefits
Tips to consider before opting for outsourcing
How can Felix Advisory help in outsourcing accounting?

What is outsourced accounting?

As far as the definition is concerned, we have already covered it in the introduction. For this section, let us dive a little into the intricacies.

For any company, financial planning and accounting are the two critical pillars to execute a successful business. Lately, more and more businesses have been inclined to outsource these tasks. There are two major reasons for this: professional accountants as permanent employees take big salaries, and a lot of time is required to understand these processes. By outsourcing, businesses can save money and time, which they can use on the core parts of their growing business. Outsourced accounting offers better opportunities to grow in the longer run.

Since the expense of outsourcing is less than the salary of one accounting professional, more and more organizations are starting to outsource their accounting operations. Cutting overhead and improving financial authority ensure the success of any business. By getting where the business stands now and where it is moving, entrepreneurs have the option to conclude whether outsourcing is the best choice for their business.

Difference between outsourced accounting and in-house accounting?

Quality and Training: The in-house accountant/financial professional comes with proven professional experience as he/she passes the hiring tests set by the company. It can’t be the same for the outsourced accounting service providers, with a chance that the person in interest can be self-taught. Therefore, it becomes imperative to check for efficiency and expertise, ensuring a path to receive timely and accurate financials.
Internal Controls – When 1 or 2 employees are dealing with the books, there is a higher chance of fraud. This occurs since there is just 1 person involved in different duties, which means he will have the key to the bank, clearing his way for an easy steal and cover-up. On the other hand, outsourced accounting services reduce the chance of fraud. This is due to the existing separation of duties and several steps to take while offering financial reports for the business.
Cost of difference – This is by far the biggest differentiator. While a full-time financial/accounting professional can cost you between $7,000 and 8,000 a month, outsourced accounting can cost around $2,500 to $5,000 for small and medium businesses, depending on the required service. Note that the salary range suggested for in-house financial professionals is excluded from the overhead costs.

4 Important Outsourced Accounting Benefits

Eliminates time and cost of hiring: The recruitment process is an extensive job that requires ample time and capital investment. It takes resources to oversee it, from making a strategy, bringing applicants to interviewing them. Thereby mandating the business to allot one or more resources to look after the matter. Typically, start-ups refrain from engaging themselves with the above-explained approach. Instead, they prefer a ready-made setup that comes under budget, allowing them to put their efforts in a better place.
Offers seamless account scaling – The accounting service provider comes with resource availability to scale the additional required task quickly without any lag. For instance, if your accounting requirement exceeds the number of functions for 1 employee, you can readily obtain the other resource. This can be achieved without going through an extensive and time-taking recruitment process. Besides, outsourcing providers charge hourly, allowing you to increase or downsize the hours with practically no interference.
Provides automation technologies – Accounting automation software saves a great deal with saving time and reducing data-leak risk. Additionally, there is less room left for human error. Service automation allows one to receive a real-time report, identify a potential problem, and find a solution early. Good accounting service providers come with a workforce skilled in Quickbooks, Sage, Visma, Xero, Microsoft Dynamics, SAP, and more.
Offers cost-saving accounting service – In general, outsourcing is considered an additional burden. However, it isn’t the proper discernment by any means. It is the opposite. Businesses can save money on salaries, taxes, office supplies, and other overhead compensations by outsourcing. It means paying just for what you need, thus a significant cost-saver.

5 points to consider before choosing account outsourcing

The required accounting services
Competitive cost range
Expertise
Data Security
Flexible service level agreement

How can Felix Advisory help in outsourcing accounting?

Felix Advisory offers accounting services that harness a proprietary methodology to strategize business decisions and data collection. It oversees, changes, and shields compliance for businesses through auditing and assurance accounting. This service creates optimal financial reports to develop pragmatic business solutions. Three features that highlight their accounting service are Quality Assurance, Sustainability, and Risk Mitigation.

There are enormous benefits for businesses that outsource their accounting operations—starting with cost-efficiency and finishing with adaptability. Accounting is vital for any business, yet in addition complex. It requires time and explicit expertise. In the absence of it may end up in undesired business results. Therefore, it is advisable to look out for the best accounting outsourcing companies to give your business a needed boost.

Hope this article has helped you know more about How CFO services can help businesses grow and enhance their Financial Health. Felix Advisory can help you with our Best-in-Class Virtual CFO Services.

Below are a few blogs that you would like to read:

Everything You Need To Know About Corporate Compliance

How CFO services can help businesses grow and enhance their Financial Health

Convertible Notes Open Doors to Foreign Investments for Startups

Fitness Tech: Transforming Lives and Industries

What the Budget 2020 could have in store for PE, VCs and start-ups