Why Use Outsourced Accounting Services?
Avoid errors in your books or incurring late filing fees with better accounting.
Save hours spent on paperwork
Company owners spent countless hours every month or year rushing through bills and receipts on last minute before filing deadline.
Better Clarity of your Books
Many company owners are not accounting trained and not able to ensure quality work from staffs in this area. Outsourcing to the care of qualified accountants ensure proper allocation of transactions and help paint a clearer picture of the company’s position.
Be confident for scrutiny by 3rd party
There will come a time when you need to show financial statement to third-parties or statutory body for various reasons.
Be confident of your numbers when the time comes with outsourced accounting.
Accounting is Much More than Just for Statutory Purposes
Business owners feel that using accounting services is not important as they are involved in their business and they can estimate their numbers.
But here are the important benefits that you are missing out on without proper outsource accounting.
1. Help to compete and plan for your company
2. Help to pay liabilities (eg creditors, employees)
3. Enable tax planning and meet the statutory requirements
4. Makes it easier to distribute profits to shareholders as dividends or for partnerships with profit sharing.
The Pros of Outsourced Accounting
1. More cost Effective
Hiring an outsourced accounting service is often cheaper and more cost-effective than hiring in-house staff to handle the finance function. By outsourcing, you don’t have any attributed overhead costs that hiring an employee would generate
2. Being Proactive
Outsourced accounting team has the advantage of proactivity, where they can spot red flags ahead of time and notify you about expenditures and cash flow, for example. Having trained eyes on your finances at all times can bring considerable peace of mind
The Cons of Outsourced Accounting
1. Hidden Costs
With any paid service, scope creep can happen where one task ends up snowballing into multiple, and it can result in additional costs you weren’t initially aware of (or forgot about). However, at 3K Ltd, we are very transparent about our pricing structure and what you see is what you get.
2. Less Control
By outsourcing your accounting, there is definitely less ability for you to micro manage your financial reports, you can’t just walk to the next table and pull up a number from the finance department. However, you will definitely still get regular updates from us when you use our service.
The Key Difference and Advantages of Outsourced Accounting over BookKeeping
Accounting helps you come up with critical analysis and decisions
Bookkeeping is only the record of a company’s financial transactions systematically while outsourced accounting aids management in making good decisions based on a firms finances.
Accounting starts from accurate transactions of book keeping
Bookkeeping starts from raw data such as receipts and invoices while accounting starts from the clearly sorted and recorded data from bookkeeping.
Accountants require a different type of analytical thinking compared to book keepers
A Bookkeeper should have good knowledge of ledges and journal entries to input the correct transactions and also a detailed thought process while an accountant on the other hand should be able to think out of the box and look at the big picture and balance risks and trade offs to help the company.
Frequently Asked Questions for Our Outsourced Accounting Service
Bookkeeping refers to the recording of transactions whereas accounting extended the scope to interpreting, classifying, analyzing, reporting, and summarizing the data.
For example, an accountant can generate reports on the company’s current financial condition for management to make business decision.
To summarise, outsourced accounting helps you make meaning of your transactions and also give you insights on making better decisions based on your data.
1. What is the strategic plan?
The requirements depends on the business strategic plan of the company. For instance, an expectation of future increase in sales (eg: New projects/extra marketing efforts in coming months) would require you to get more funds for higher productions. How clear is the financial plan will depend on the clarity of strategic plan.
2. Prepare forecast
A strategic plan would allow you to make projections about your company’s finance, which in turn allows you to gain valuable insights about potential financial impacts, with and without adjustments for potential uncertainties/change. By having a financial forecast, the management will then be able to present weaknesses of the company (egL Over cost for some expenses) and make timely decisions to reduce costs. Another projection would be a cashflow forecast, which is paramount because liquidity can hinder the development of your company even when there is profit.
3. Manage needs
With planning, a company can make the best profit maximising decision, whether it is to seek financing from loan or equity at a strategic timings at favourable terms, or cut unnecessary new loans if cost control exercise in place makes the cash flow healthy.
4. Cater for emergency
The financial forecast can be further worked out based on best, normal and worst case scenarios in order to prepare financially for all these cases, especially the worst scenario.
5. Continue to monitor
Such monitoring not only allow companies to know when and how to react and adjust promptly based on the actual situation, but also improve future forecasts.
Currently servicing more than 300+ clients, our team are led by experienced accountants to ensure we have the expertise to account transactions properly under different situations. Our service can be value-added to the company at economical value like removing duplication of work done by us and the company.
A solvent company is one whose assets exceed its liabilities and one that can pay its creditors in full, within 12 months of a debt falling due.
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