Accounting Outsourcing : Let your Business go Places

All successful business owners understand the significance of a proper accounting system and for this reason only, they ensure to employ the most efficient accounting team in their organization. It is undoubtedly true that in order to procure a good, well managed accounting system, a great deal of time as well as endeavor is needed.

Accounting is basically a collective task of various day to day jobs and transactions, where every business transaction and financial record keeping task should be performed in an appropriate manner because, even a single mistake is enough to disturb the entire accounting management.

However, unfortunately, not all business organizations are well equipped with latest accounting software and heavy accounting staff due to cost effectiveness or unavailability of experienced accountants. But fortunately, as every problem comes with a set solution, even this problem is settled with an easy option of accounting outsourcing.

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SBDC hosts seminar called 'Basics of Bookkeeping'

The ASU Small Business Development Center is holding a seminar, "The Basics of Bookkeeping." The seminar will be from 6 p.m. to 8:30 p.m. Tuesday, Aug. 12, in Conference Room 100 of the Rassman Building on the ASU campus. Cost is $10 per person.

The seminar will focus on the importance of adequate record-keeping for business survival and will explore the two main uses of financial data, the nine requirements of a record-keeping system, and a detailed explanation of the basic steps in the accounting cycle.

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Five Guidelines In Selecting Your Outsourcing Bookkeeping Partner

Outsourcing refers to the practice of transferring day to day process of a business to some external service provider. It rose to prominence as a business strategy in the early 1980's when some European airline companies began transferring part of their back office function to New Delhi. The guiding force behind such a strategy then was to reduce labor costs. Outsourcing in today's context is however, necessitated not only by cost consideration but also other specific advantages like flexibility and scalability of operations etc. And as more and more companies join the fray, it is natural that there has been exceptional increase in the number of vendors undertaking such services.

It therefore becomes very important that outsource of critical functions like accounting be done with utmost care The most important point in this regard is identifying the right outsourcing partner. Policies and practices that the outsourcing partner follow, impact the companies business directly. Therefore extreme caution should be practiced by the companies while deciding on their outsourcing partners. Never should such a decision be taken in a rush.

The following pointers should be taken into consideration while selecting your partner:

1. Company's experience is direct pointer to its capabilities. Information relating to their total client base and kind of projects handled by them can give a clear idea of their real standing in the market. It is always prudent to check on the references provided by the company.
2. To have a clear idea of the people running the business it is always advisable to ask for a profile of its director, the key persons etc. Also their qualifications should be taken into consideration to judge the level of professionalism that can be expected.
3. The best way to judge the capability and genuineness of a company is by checking whether the company measure in expectations of its clients. It is thus the best way to gauge the company's credentials.
4. To get an idea of outsourcing partner's abilities in bookkeeping, it is always advisable to test him on files that have been already completed. This way their skills can be directly tested.
5. Once credibility about the competencies of the outsourcing partner has been established, assessment should be made about their capabilities, factors like proper infrastructure facility, number of staff etc that are directly involved with completion of the project should be checked. Here once again client reference plays an important role.
   

Once the credentials and capabilities of the vendor are established, it is necessary to establish that the outsourcing partner shares the same business objective as that of the company. This is important because communication becomes really easy once the objectives and strategies of the outsourcing company are shared by the outsourced vendor.

Bookkeeping is an important business function. Outsourcing such a key function is a decision that can have huge implications on the business. Both the outsourcing company and the vendor company will be venturing into a strategic relationship that affects both their businesses directly. But the element of risk lies more for the company that undertakes to outsource its books of accounts. It should therefore make the most informed decision to minimize the risk and benefit from it.

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Accounting firms can't help on tax

If policymakers think the big auditors are going to help them roll back tax avoidance, they may have a long wait

Don't let the fox guard the henhouse." It may be an old proverb, but many involved in financial regulation do not appear to be aware of it. Blinkered policymakers think that major accounting firms are somehow going to help them to stem the tide of tax avoidance. Such aspirations have little chance of becoming reality until major accounting firms are forced to put their own houses in order.

Earlier this year, Christian Aid (pdf) reported that big accounting firms are at the heart of a global tax avoidance industry. It showed how depriving governments of vital revenues for investment in social infrastructure can cause death and misery for millions. Big accounting firms are protected by a cocoon of secrecy and confidentiality laws, but some evidence of their activities is publicly available.

KPMG has been the subject of what the US justice department described as the "largest criminal tax case ever filed".

KPMG admitted that it engaged in fraudulent practices that enabled its clients to generate phoney losses. The firm collected huge fees and the tax authorities lost billions of dollars in tax revenues. The firm paid $456m in fines, but escaped closure. A number of its partners may face prosecutions.

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