The ability to outsource accounting services in Hong Kong is becoming more and more popular for smaller businesses, but why? There are pros and cons to outsourcing so let’s take a look at what they are and you can decide if outsourcing is an option that you could use.
Why Outsource?
The biggest reason for accounting outsourcing in Hong Kong is that of cost saving that comes by way of saving time. It’s impossible to buy time, but, if you are able to give yourself more time by having someone else undergo time consuming admin tasks, then you are kind of accomplishing the impossible in a roundabout sort of way. All businesses require the ability to focus what drives their income and profit and as such outsourcing services are being used more so now than ever before.
The pros
- More cost effective
Recruiting an outsourced accounting agency is frequently less expensive and more efficient than hiring in-house financial personnel. You avoid any overhead costs associated with hiring an employee, much like using technology to boost business, health insurance, retirement, vacation, Workers’ Compensation, and sick days, by outsourcing. Also, having the experience of a full team rather than just one individual is invaluable.
- Proactive approach
You didn’t go into company to be a skilled finance professional in charge of the books, did you? You want to operate your firm and concentrate on the company’s overall growth and vision. This is why having an outsourced accounting team gives you the advantage of proactivity, as they can notice red flags ahead of time and alert you to things like expenditures and cash flow and have the confidence to make sound financial decisions.
- Reduced fraud
In many small to medium-sized enterprises with only one person in charge of accounting, fraud can be an unexpected result. That’s because it’s simple to tamper with the books or allow a fictitious expense to go unnoticed for months, if not years. There are a variety of warning indicators that can indicate fraud, and they are frequently the result of an employee’s financial struggle, when they are unsure what else to do.
The cons
- Hidden costs
Scope creep can occur with any paid service, where one work turns into several, resulting in additional costs you weren’t aware of at the outset (or forgot about). Make your month-to-month connection clear and set expectations from the start to reduce the chances of this happening.
- Less control
There is a catch to an outsourced team’s proactivity: you can’t walk down the hall and inquire about every single financial event that occurs. Of course, you’ll be able to contact your account manager, although you will probably need to read up on the subject for if they aren’t available, if you are in the IT industry then you might find this outsourcing information useful. You will be able to receive weekly updates, and monthly reports, but trust in your outsourced relationship is required.
- Not local
There are certainly advantages to having an employee on hand who can respond to inquiries quickly. While an outsourced workforce is available, responses are not always immediate.
Because they are not in the same office, there may be constraints, however, a good outsourced accounting firm should have solid communication procedures in place to guarantee that your team is always available and accessible.
