Outsourcing financial management
You can outsource all or part of your company’s financial management to an accounting firm. Using a proficient accounting firm usually improves the quality of financial management and allows your company to focus on its core activities. Even if you are using an accounting firm, you should learn the basic of financial management. Remember that, as the entrepreneur, you carry the final responsibility for your company’s financial management.
You can outsource all or part of your company’s financial management to an accounting firm. In addition to bookkeeping and financial statements, the accounting firm can manage your company’s payroll, invoicing transactions, and notifications to the authorities. The accounting firm can also help you in planning your business operations and monitoring financial ratios.
Partial outsourcing of financial management is both common and advisable. Small companies often manage their invoicing and payment transactions on their own while outsourcing their accounting and payroll management, for instance. Agree on this division of labour with the accounting firm in advance and in detail.
Always conclude a written agreement with the accounting firm. Follow the agreement and the agreed time limits. For example, providing vouchers to the firm too late may cause extra charges for your company.
Even if you outsource your company’s financial management, you should learn its basics. This allows you to keep on track with your company’s financial and tax situation, know how to read your company’s financial statements, and change your company’s operations to be more profitable.
Outsourcing financial management usually brings a variety of benefits for your company. Using a professional to manage your company’s financial management on your behalf reduces the risk for errors and neglect of the obligations by the authorities. A good financial management professional knows the laws, decrees and the best practices in the industry.
When you outsource your company’s financial management, your company saves time and can focus on its actual operations. It does not have to get its own financial management system or recruit or train an employee in charge of financial management. Your company’s financial management will usually be more up to date, which makes it easier for you to plan your activities and decision-making.
The accounting firm will provide you with quick access to the financial management services your company needs. The service models are highly-evolved and established. If necessary, you may also ask the accounting firm for advice in matters such as pricing and taxation. The firm will also provide you with ready-made models and templates for matters such as budgeting, foreign trade, and the special requirements of your industry.
Before asking for quotes for your company’s financial management, you must find out certain basic issues. The accounting can use these as the basis for calculating how much financial management services would cost for your company.
First, you should consider which areas of financial management your company wants and which it should outsource. Also consider this issue from a practical viewpoint: if the accounting firm manages calculations related to taxes, for instance, will it also manage the transactions with the authorities related to taxation?
When asking for a quote, provide concrete numbers indicating the scope of your company’s operations. For instance, notify the average number of invoices your company sends and receives each month, and for how many people does it pay salary.
Also consider which cost pool and budget reports you will need, for example in monitoring the profitability of different departments and product groups. Also consider the level of detail you will need in the reports.
The more carefully you have considered these issues in advance, the easier the bidding process will be for you.
A professional accounting firm can often identified by its staff having appropriate training and sound experience in the field. They also maintain their vocational skills through continuous training. A good accounting firm’s finances and background are in order. It will also have up-to-date tools.
The competence of the accounting firm is difficult to discern from afar. There are many types of accounting firms with regard to quality, as, in practice, anyone can set up one. In addition, there is no authority that specifically supervises the activities of accounting firms.
Likewise, the competence of an accounting firm cannot be inferred from its size. Even a small accounting firm can be proficient and competent. Similarly, a large accounting firm may employ people with various levels of competence. The same applies to price: A high price is not always a guarantee of quality.
An accounting agency can also be authorised. In this case, the Association of Finnish Accounting Firms monitors the accounting firm to ensure that its competence, systems and operating models are in order. However, please note that an unauthorised accounting firm may meet these criteria just as well.
You can get tips on good accounting firms from other entrepreneurs or from a development company in your region. You can also ask accounting offices for references.