Many CPA firms are facing challenges regarding balancing of the most critical yet time-consuming tasks like bookkeeping & accounting with business growth activities. According to research, CPA firms spend 70% time in administering low-yield data-intensive compliance functions. Instead of making strategies for business growth, a CPA is busy in low revenue generating tasks like bookkeeping, accounting, payroll, and tax preparation.
CPA firms have a lot of responsibilities to handle, some of which are:
- Ensure accurate depiction of accounts and support the client by setting up compliance and controls.
- Adopt cost-cutting strategies to be more proficient in the accounting profession.
- Adopt policies to cut down the cash cycle and increase their ROI.
However, outsourcing enables CPA firms to manage everything efficiently. Having a team of experts in accounting will help a CPA to get smooth workflow and a cost-effective way to get everything well maintained.
3 Major accounting tasks that a CPA firm should outsource to focus on their business growth:
Bookkeeping - Bookkeeping is an essential task yet time-consuming process as well; which consist of recording financial transactions, check financial records and update statements for accuracy.
A CPA firm doesn’t have the desired time to handle the general bookkeeping tasks in-house, and having a team of in-house bookkeepers is not an affordable option for every CPA firm.
Secondly, there is massive competition among accounting or CPA firms. To stay ahead of competitors, they have to deliver their services more consistently at a reasonable price and also have to be more flexible according to their work schedules.
Therefore, it is vital to have a credible outsourcing partner offering bookkeeping services for CPAs; who undertakes work with the help of professional accountants. The outsourcing firm aids you in all the bookkeeping tasks such as account reconciliation, general ledger entries, accounts payable and accounts receivable.
Payroll processing and reporting – Businesses have to fulfill a wide range of rules and law when it comes to employees — from federal, to state and local. It takes significant time and consideration to deal with them. There are also legal requirements, such as tax reporting and remittance that needs to be fulfilled accurately.
For a small team, it’s easy to manage payroll in-house. But once a business starts expanding beyond 10 employees, monthly payroll processing may become hectic and time-consuming. Therefore outsourcing payroll can help to:
- Gain more control over the payroll process
- Reduce the risk of imposing penalties for violating reporting and other requirements
- Keep up with the technology because lack of technology becomes a hindrance to scaling for the growth of the business.
Hence, outsourcing is preferable than setting up and managing payroll processing and reporting. As it helps to achieve the business growth by handing over the payroll responsibilities to the third party as the business starts expanding.
Tax Preparation – Tax preparation is another task that requires your time and undivided attention. Engaging yourself in managing and recruiting the quality team becomes more complicated, and handling a large internal team for tax preparation results in a rise in the operating cost of the firm.
Therefore, a large number of CPA firms are taking help of outsourcing companies to prepare taxes for their clients. It helps them to:
- Reduce at least 50-60% of their cost spent on hiring in-house employees
- Handling tax compliance workload
- Meeting deadlines timely during the peak seasons
- Helps in business expansion
- Improving client relationships
- Reduce the burden of managing and recruiting the quality team
Conclusion - Consider outsourcing as a tool that can be used to help you provide quality, efficient, and affordable services to your clients. CPAs and accounting firms can use their time more efficiently to focus on value-added tasks like investments, wealth planning, business growth strategies, maintaining good client relationships instead of the spending time in bookkeeping & accounting.
Take note of the list above and start outsourcing now to save time, money and focus more on growing business.
