The back office of a business represents any administrative or financial services that support a company to run on a daily basis to manage its operations.
What is back office accounting?
All companies need some form of financial management to support their normal business operations. Back office accounting is the financial management of a company that essentially works behind the scenes. The accounting tasks are the same as other companies which normally include accounts payable, accounts receivable, payroll, and inventory management as such.
Like all accounting systems, back office accounting needs to have logical processes in place. This includes a process to capture specific information for financial management, activities in place to record transactions into ledgers, and a manner into which a company puts together financial reports. Without these processes in place, a company may wind up not knowing anything meaningful about its financial activities. Monthly reporting is often a goal for all accounting systems in a company.
Why should a business outsource back office accounting?
Companies may be able to outsource back office accounting to a third party in order to focus on their main business goals. Hiring accountants or bookkeepers on behalf of the company for basic back office accounting tasks can be a way forward and a one solved problem for small and medium scale business owners as they can focus on managing operations and creating shareholder value for their business.
Areas to consider when outsourcing back office accounting
Your accounting tasks rob a major share of your time
Most of the time businesses end up having so much to do with operations, sales and other front office activities with so little time while they forget about managing the finances right.
You encounter delays in accounting
When the entire accounting work is dependent on a specific group of resources, then there is a high chance of encountering delays.
You face consistent accounting errors and mistakes
Overworked resources, multiple roles and responsibilities and lack of solid segregation of duties are common causes of consistent mistakes in accounting and bookkeeping.
You run into frequent audit problems
More often than not small and medium businesses do not completely leverage the available tax breaks and opportunities due to lack of time, expertise or both, which is understandable. However, if your business is facing problems with right tax documentation for an IRS audit, then it is a sign of problem and also an area of improvement.
You are scaling your business
Simplest sign of potential accounting errors or problems is a business that is scaling. It is a relentless hassle that requires more focus and preparation for the volume of work it demands. Accounting tasks are sure to pile up and without adequate resources, a business may not reach its full potential and worse, may screech to a halt.
Outsourcing accounting services as a whole or seeking assistance for specific accounting services surely free up time, resources and help the business focus more on growth. So if you are a business that is encountering any of the signs above then it is high time to hire an expert remote accounting firm like Back Office Accountants.
How to outsource back office accounting?
When a small or medium business cannot continue its accounting in house, an option may be to outsource back office accounting practices to a third party. Hiring a local bookkeeping company can fulfill this service. Larger organizations may be able to outsource accounting services to international companies. This is not only inexpensive, but it also removes the need for maintaining offices in its main location. Outsourcing needs to be significantly cheaper than hiring and maintaining accounting staff in the local area.
KLOUDAC Global is a dedicated expansion of KLOUDAC, a recognized accounting firm with branches in Dubai, London & Colombo with 15 years of service experience. KLOUDAC Global mainly focuses on back office accounting with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more.