• 10 Benefits of Outsourcing your Accounting Functions(1)

One practice that sustainable businesses adopt is ­outsourcing their accounting and bookkeeping functions to financial service providers instead of trying to carry all the responsibilities on their own.

When a small business owner undertakes all the responsibilities of operating a business alone, chances of overlooking too many minute details is high.

Outsourcing for Accounting Services

By outsourcing accounting services, business owners do not have to be overwhelmed by all the information as accountants can focus on updated key figures to allow the owners to make an informed decision. ­

In Singapore, it is considered one of the easiest and straightforward for foreigners or locals to own a business or do business. One of the reasons why is the variation of accounting services offered by accounting service providers, such as:

  • Company Registration and Formation
  • Tax assessment
  • Secretarial Services
  • Financial Tools & providing support in various other areas
  • Advise on local types of funds, programmes, and schemes available to business owners
Advice:
It would be wise for the local accounting service provider to be operating from their home country to ensure they are more familiar with the requirements for the schemes and grants!

For instance, in Singapore, consultants would be able to provide information and eligibility for the best type of tax incentive offered such as:

Tax Exemption Scheme for New Start-Up CompaniesFrom YA 2020 onwards,

75% exemption on first $100,000 of normal chargeable income; and

A further 50% exemption on the next $100,000 of normal chargeable income

Partial Tax Exemption for All CompaniesFrom YA 2020 onwards, qualifying companies can enjoy,

75% exemption on the first $10,000 of normal chargeable income; and

A further 50% exemption on the next $190,000 of normal chargeable income

It is a myth that these services cause unnecessary burden on the expenditure of the company. In actual fact, being able to receive the latest data and current knowledge would give the company an advantage over others.

This is especially true of multinational companies and foreign business owners who might need help with the local infrastructure and business landscape in Singapore.

Wan Yi
RECOMMENDATION: If you do not have any accounting experience, it is best to get an accounting professional to do your accounts.

Should You Hire an Accountant/Accounting Service Firm

Another aspect to consider is the needs of your business. By understanding what your company needs, it would allow you to make the best decision between hiring an accountant or an accounting service firm.

It is common for small companies to start with the usage of financial software programs to assist them in managing cash flow, financial reports and other related matters until the business grows and more financial responsibilities come.

When that happen, it would be advisable to shift the responsibilities to a certified expert to handle such activities like tax filing, tax planning and business planning. Some of the benefits of having an accounting firm are:

  • Detailed assistance in planning financial future
  • Managing financial books
  • Tax services
  • Up-to-date technology with accounting software programs

What are the Benefits of Outsourcing your Accounting Functions

Having someone else or another entity focus on the accounting and finances of any operation will then give the business the freedom to look into other aspects of the business. Here is a list of some of those benefits:

Cost saving

The most significant benefit of outsourcing your accounting functions is that it is cost saving. Despite the cost incurred for engaging accounting providers, the money is saved from the monthly salary, annual leave, time in lieu and sick leave for permanent employees.

Time saving

Instead of spending time on recruiting, training, and other employee-related activities, you will be able to obtain “instant employees” by opting for finance and accounting services.

This saves time and effort of considering the employees as you are only responsible for paying for their services.

Worry-free for deadlines and timeline

By outsourcing the accounting functions, you would not be needed to worry about the submission or reporting deadlines as the service providers would do it for you. This relieves the burden of deadlines and allows the owner to focus on other aspects of the business.

Better quality of work

Outsourced accounting providers will honour the service agreement because they need it as part of their business as compare to permanent employees who probably only worry about the next pay check.

Always up-to-date with latest regulations and legislations

Another advantage of having experts is that they are updated with the latest regulations and legislations relating to accounting functions.

Only pay for what you need

Outsourcing your accounting function also means that most of the time, you will only be charged for services that you use as and when you require them.

Streamlining your business

Outsourcing accounting services usually proves to have fewer errors due to this streamlining and thus, you would have to spend less time trying to rectify mistakes.

Access to the latest accounting technology

Together with the service, you are more likely to also get the latest in accounting technology. By outsourcing, you no longer need to spend so much time researching on accounting programs.

Drive core business functions

Through outsourcing your accounting, it allows the business to put money towards activities that will increase revenue as compare to hiring an internal accountant that would not necessarily drive revenue.

Increase controls & Reduce Fraud

In small companies, it is common for accounting to be managed internally in the hands of one or two people, posing higher risk of fraud. By outsourcing and moving the responsibility to a third-party, it reduces the risk of fraud and allows for greater internal controls.

Outsourcing proves to be a catalyst for numerous businesses to spur the growth of the organisation, especially in today’s climate. Through doing so, business owners can now spend a significant amount of your day investing in business operations instead of having to worry about internal processes.

Ready to set up your company in Singapore or require accounting services? Reach out to us and see how we can be part of your journey!

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FAQs

Should only big companies consider outsourcing their accounting functions?2021-09-17T16:48:58+08:00

No, Small companies who has just set up their company should and can employ outsourced accountants to help with the accounting functions especially if the owners do not have any accounting knowledge or intends to focus on other aspects of the business.

Is it safe to outsource accounting functions?2021-09-17T16:48:31+08:00

When choosing a service provider, you should review their security measures, their data storage, data security and staff awareness.

Does Paul Hype Page offer Accounting Services?2021-09-17T16:48:01+08:00

Yes. Paul Hype Page is a leading and trusted accounting service provider in Singapore and you can find reliable professional accountants for your company.

Will I acquire more accurate services from outsourced providers?2021-09-17T16:47:26+08:00

When choosing a provider, you should read up on their past clients, their comments and review of the service provider. It is vital that both you and the service provider contractually agree on the delivery service level agreement and key performance indicators before following through to manage expectations.

Do startups need to hire a professional accountant?2021-01-19T09:48:22+08:00

It depends on the owner’s background and expertise. If a business owner has no clue where to start and the basic accounting knowledge, it is best to hire one to make sure the company is complying with the annual compliance.

How should I choose the right accountant if I decided to hire one?2021-01-19T09:48:09+08:00

When you decided to hire a professional accountant, make sure the accountant is certified or chartered. Of course, hiring an accountant with relevant experience in your business field will be a plus.

Where can I hire a reliable professional accountant?2021-01-19T09:47:58+08:00

You can hire a reliable professional accountant for your company from Paul Hype Page. We are the leading and trusted accounting service provider in Singapore.

How do I evaluate if I should hire a professional accountant for my business?2021-01-19T09:44:31+08:00

You should consider hiring a professional accountant for your business if you are not familiar with Singapore’s corporate tax regulations, requirements, and tax laws. It is also a sign to hire a professional accountant for your business if you are not sure when to register GST.

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