Top Reasons to Outsource Your Accounts Payable
As an entrepreneur, your goal is to see your business grow and become successful. At first, the entrepreneur can handle different roles in the business. However, as it grows, accounting transactions become bigger. At this point, you’ll be in a dilemma: whether to hire a full-time CPA accountant or outsource the service.
Well, hiring a fulltime accountant to handle your accounts payable is not cost-effective. As professionals, they’ll demand a higher compensation rate that your small business cannot sustain. Instead, accounts payable outsourcing allows you to get similar services at an affordable price. The following are the main reasons why you hire an accounting service to manage your accounts payables.
Save on Costs
It takes an average of $15.61 to process a single invoice. Assuming you’re processing 100 invoices in a month, that’ll be $1561 in cost. A small business will experience challenges in meeting these costs and supporting their growth.
Outsourcing the service allows you to save on the cost by more than ten times. That’s because the accounting firm you engage will offer advanced technology solutions at a cheaper rate.
Be sure to reinvest the money you save towards the growth and development of your firm.
Saves on Time
As an entrepreneur, you have limited time. You should spend this time growing and managing your firm, not overseeing bills. That is where your time is needed as an expert. But that doesn’t mean you ignore the AP department. No!
Many accounting services have spent their years improving their AP systems. Outsourcing their services ensures a faster, better, and accurate accounts payable system.
Many of these companies will process an invoice that comes through their system in a day. Put your accounts receivables in the hands of an expert, they’ll be done accurately and within a short time-frame.
Ensures Compliance with Accounting Standards
There are a set of accounting standards that every business should comply with. Other than this, there are statute laws that a company must follow. Failure to comply with these laws can attract costly court cases and huge penalties if convicted.
The problem is, these laws keep on changing. As such, compliance may be hard. Outsourcing the accounting service ensures you remain compliant to the applicable laws. With this, you’ll have peace of mind knowing that your employees are following the set rules and regulations.
It Frees Up Your Employees
The human resource is the greatest asset in your firm. These are the people that drive your firm towards the attainment of its goals and objectives.
So, why tie your account payable team doing a task that you can outsource? Remember, outsourcing the service doesn’t mean you’ll have to fire your employees. Engage them in tasks that a machine cannot do such as working with your suppliers to improve the terms of payment or assisting with collections. Let them focus on doing great work that contributes to the growth of your enterprise.
Ensures you Never Miss a Beat
Assume your accounts payable accountant is sick and can’t report to work for a week? That would translate to delay on your part to clear due accounts. If you do not pay the vendors on time, they will withhold the goods. It’s a chain of losses.
Maybe you’re saying, “My business has four clerks dealing with accounts payables.” So, if one gets sick, the business is still safe. Yeah, but that would mean a 25 percent reduction in accounts payable efficiency.
Outsourcing the service ensures you’re continually receiving quality services. The company will have different and competent professionals who can handle your accounts. Therefore, if their employee doesn’t show up to work on any day, your services will not be interrupted.
Keeps your Record and Documents Safe
Let’s face it: calamities like fire or floods happen, and you can’t control them. Such disasters will pose a significant threat to your business. Other than destroying your inventory, they’ll damage your records.
Outsourcing the service to a third party ensures the safety of your documents and data. Even better, they’ll store your records online or in the cloud. If any calamity happens, your data will be secure in the cloud.