When business owners and chief decision makers think about ways to streamline their business practices, few ever think about outsourcing accounting services. Which is too bad, when you think about it, because outsourcing accounting functions can be one of the most effective methods of eliminating wasteful spending, overhead, and manpower. Not convinced yet? Here are 5 examples of how outsourced accounting can help.

1. Outsourcing accounting services helps your business stay up to date with constantly changing tax codes and regulations, which is an absolute necessity. Handling yearly training and refreshers internally can be a great drain on your resources, eventually leading to lost productivity and a higher rate of errors in accounting.

2. Hiring a third party accounting service will ensure your company won’t have to pay extortionate tax penalties that can occur as a result of poorly managed payroll, which happens sometimes when overburdened bookkeepers make mistakes. Most outsourced accounting firms even offer insurance guaranteeing against tax penalties.

3. By outsourcing accounting functions to a reputable company, you can rest assured that the employees in charge of handling your sensitive financial information have been pre-screened and are monitored closely for potentially fraudulent activity. In order to institute these kinds of checks and balances within your own company you’d have to hire even more fulltime employees, which can lead to massive overspending.

4. Accurate and efficient payroll processing means that your employees are paid regularly and on time, ensuring a satisfied and productive workforce. As we all know, there’s nothing more integral to the success of a company than the attitude and morale of its employee base.

5. Having constant access to a team of experts is another way that outsourcing accounting services can help streamline your business. These experts will not only perform routine accounting functions accurately, but they can also offer advice essential to improved business operation.

If streamlining your business is as important to you as it should be, consider the benefits of outsourcing accounting functions.

If you ask most people what they think of outsourcing, the majority of them will tell you that it’s a bad practice. Most of those people won’t be able to tell you precisely why they feel this way – just that they do. But the truth is, whether you’re an SMB or a large corporation, the decision to outsource accounting services could actually result in the creation of new jobs, not to mention spurring growth in your company. How does this work? Read on to find out.

Businesses who decide to outsource accounting to third parties frequently do so because their internal bookkeeping could use a bit of help. Maybe their bookkeeper isn’t up to the task of keeping up with daily entries, or is delivering substandard performance. While the belief that outsourcing will bring improved checks and balances is one that’s founded on solid logic, handing over the accounting to a qualified third party can actually decrease overhead to the point where new jobs in different areas can be created – like expanding manufacturing, for example.

The natural consequence of expansion in critical areas like manufacturing or sales can then result in opportunities for corporate growth. Although outsourced accounting services aren’t free, they can be a lot more cost effective than employing an entire team of bookkeepers, especially when you factor into regular employment additional expenses like health care and benefits. There are also overhead cost to consider when you employ a team of accountants. Just freeing up a small percentage of the company’s physical real estate to make room for other endeavors can dramatically cut cost and spur expansion.

Reduced operating budgets and expanded growth are the kinds of things that help ignite stalled job markets. Think about it: if more companies were to take advantage of growth opportunities like these, maybe the country’s economic outlook wouldn’t be so dire.

Keeping strict guidelines in place for your company’s accounting policies is critical to your bottom line – but unless you have developed a stringent system of accounting audit procedures or go out of your way to deliver extensive training to every bookkeeper you hire, there’s always the risk that those policies won’t be followed to the letter. This is one of the chief concerns that’s leading many business owners to consider outsourcing their bookkeeping needs, and it’s something you should consider as well for the ultimate health of your business.

So what are the risk factors inherent in failing to enforce strict accounting policies? There are plenty, actually – but here’s one example that can bring about significant risk: the miscalculation of depreciation of company assets. Since there are numerous ways to calculate depreciation – including straight-line, units-of-activity, double-declining balance, and sum-of-the-years’-digits – this can lead to a mightily undesirable situation where your financial statements are thrown out of whack by inconsistent calculations. This isn’t illegal – not unless you’re a publicly traded company, that is – but it can impact the opinion of potential investors and lenders, which can in turn stunt company growth.

Need to take out a small business loan to fund expansion? How about attracting big-pocketed investors to help you achieve your dreams of company growth? If your financial statements don’t add up and are pockmarked with errors, you can kiss those dreams goodbye.

When you outsource your bookkeeping needs, you’re essentially turning over control of your accounting to a third party that has clear, concise, and unambiguous accounting policies in place – and that has the resources to perform thorough accounting audit procedures to guarantee consistency. If you want to learn more about the benefits of outsourcing your company’s accounting, in addition to the numerous additional services you’ll have access to when you do, visit AccountingDepartment.com.

Although much has been made of standard accounting procedures and GAAP, there are alternative methods of reporting finances that smaller companies can take advantage of. Hiring a third party business accounting management firm can help you determine which procedure will work to your company’s best advantage. It will also open your eyes to some little-known facts about financial statement preparation. For example, did you know that smaller companies can follow OCBA instead of GAAP procedures?

What is OCBA?

OCBA is an acronym that stands for Other Comprehensive Basis of Accounting. It’s a viable alternative to following GAAP standard accounting procedures when preparing your company financial statements that can save time and effort when it comes to preparing your company’s year-end tax returns.

When can a company follow OCBA instead of GAAP?

A perfect example of the kind of company that’s better suited to following OCBA is the sole proprietorship. In this case, the preparation of the company’s financial statements doesn’t have to strictly adhere to GAAP standard accounting procedures and can instead use the income-tax-basis approach, which is more conducive to the methods that will have to be reported on the company’s tax returns.

Why follow OCBA instead of GAAP?

One of the primary reasons why your company may want to follow OCBA instead of GAAP is that when it comes time to file your business tax return, IRS requirements will force you to recalculate certain figures — like depreciation. This isn’t always an issue for bigger companies, but for the privately owned “mom and pop shop” or the sole proprietorship, having to convert numbers to match the IRS-required formula can create a big strain on resources.

Hiring a business accounting management firm to handle all of the particulars with your company financial statements and tax returns removes the burden of having to keep up with ever evolving best practices. If you’re worried about not being “in control” of your finances, don’t. AccountingDepartment.com has established methods of communication between yourself and your dedicated bookkeeping specialist that you can take advantage of to stay in daily contact, including e-mail, IM and phone. To learn more about the benefits of outsourcing your bookkeeping needs, visit AccountingDepartment.com.

If you’re a do-it-yourselfer type or have a bookkeeper in your employ taking care of the company books, you’re probably thinking you have no need to outsource your accounting. After all, moves like that are reserved for much bigger companies – right? Actually, wrong. Even for small to medium sized companies, outsourcing accounting can uncover a good number of best practices that will help your company operate at optimum efficiency. For example, did you know that sometimes, following GAAP accounting procedures isn’t practical when it comes time to prepare your company’s tax return? Here’s why.

Accounting procedures differ for day to day bookkeeping than they do for filing income tax returns. For example, depreciation follows a uniquely different course on income tax returns than they do when following the rules of GAAP accounting. Having an accountant at your disposal who understands this can save a boatload of time during tax season – time that could be much better spent actually running your business instead of translating all of your calculations from GAAP accounting to income tax basis. For this reason, many smaller companies opt to follow what’s called OCBOA (Other Comprehensive Basis of Accounting) instead of GAAP when preparing their financial statements.

If this is news to you, it’s probably indication that you could use some professional help in your company’s accounting procedures. If this is news to your bookkeeper, consider it an even more pressing indication. Visit AccountingDepartment.com to learn more about the advantages of outsourcing your company’s accounting needs, including the various methods of communication that will be available to you to confer with your dedicated accountant on a daily basis, even if that dedicated accountant just so happens to be on the other side of the country.