If your firm intends to expand throughout the Asia-Pacific region (APAC), outsourced accounting services can help you achieve seamless business growth in an unpredictable economic climate.
Given the complexities of the accounting function, it is common for business owners to be intimidated by the notion of hiring outside staff. In this article, we will look at how outsourcing can be used to create a smart business model and what actions you should take to guarantee a smooth transition.
Why use outsourced accounting firms?
Because of the numerous advantages of outsourcing accounting and bookkeeping, it is becoming a common alternative for APAC firms. In fact, according to a 2020 global study, over half of finance accounting professionals are contemplating outsourcing additional tasks.
This can be attributed to three significant factors.
1. Access to expert knowledge and skills
Outsourcing gives businesses access to qualified professionals with a high degree of relevant knowledge and expertise – attributes that are not always simple to achieve through recruiting.
“Companies frequently want to shift to outsourcing because they’re seeking specialists who can help them enhance their procedures,” says Yang Shuzhen, BoardRoom’s Accounting Director.
Operational teams and managers are typically preoccupied with day-to-day operations, making it challenging to examine procedures objectively and discover opportunities for change. This is just one example of how an outside team might assist.
“During COVID, many people working in Asia returned to their home countries, which has caused a shortage in the labour market,” Shuzhen notes. “Because of this, many APAC firms cannot source talent with the skills and experience they require.”
2. Reliable and prompt service
Accounting outsourcing provides immediate, practical support at a time when finance personnel turnover is rampant.
“A lot of financial professionals want to take a break or try a totally new industry,” Shuzhen explains. “As a result, individuals are leaving, and in many cases, businesses cannot replace them at the same rate.”
This can lead to insufficient handovers and employee shortages, causing transactions and procedures to fall between the cracks. Businesses confronted with these issues would consequently seek the assistance of an external provider with a pool of trained, professional accountants ready to analyse the situation and take over the processing.
“They require experts who are experienced enough not just to take over their accounting duties but also to advise them moving ahead,” Shuzhen explains. “An external team can assist you in developing standard operating procedures and internal controls, both of which are essential for success.”
3. Digital transformation insights
The accounting sector is undergoing significant development, with digital transformation providing opportunities to translate data into valuable business insights. The finance function is increasingly expected to contribute to the advancement of the strategic goals for a business in addition to executing transactional activities, which means that the required skill set for finance professionals is changing.
According to A 2020 Deloitte study, finance’s new position as a strategic business partner would necessitate firms balancing human and machine-based skills while reflecting the four future-ready company qualities: analytical, adaptable, agile and anticipatory.
The data analytics skills and technical experience necessary to do this can be challenging to maintain internally, which is why many organisations seek the assistance of premium outsourced accounting services.
The COVID-19 pandemic has intensified outsourcing demand even further, with the global finance and accounting outsourcing industry predicted to reach USD 53.4 billion by 2026. This is mainly owing to a widespread demand for efficient solutions and stability in difficult times, which corporate services providers can deliver.
Challenges faced by in-house accounting
There are two primary reasons why APAC organisations are moving away from in-house accounting.
Intensive labour is involved
Recruiting, training and managing a finance team is time-consuming, as is expanding the team as your company grows.
“A fast-growing organisation will devote a significant amount of money to educating the workforce, maintaining morale and ensuring the team functions properly,” Shuzhen explains. “This is significant because strong financials and timely reporting benefit the company when stakeholders make decisions.”
However, resignations may be difficult for a team. Businesses may invest time in effective handovers and training for the new staff, but there will be a learning curve, so they will not have the same influence as the prior team. There is also no assurance that the workers will remain for an extended period.
“Deliverables may be impacted when these changes become frequent and handover times are short,” Shuzhen warns.
Technological changes are difficult to adapt
Across APAC, digital innovation places pressure on internal teams to embrace new, more complex accounting systems.
While this adaptability is necessary for continuous productivity, workforce constraints caused by the Great Resignation mean that there is frequently little time to guarantee new systems are implemented correctly. As a result, the new software may become a barrier rather than an aid, resulting in further delays and investment.
An experienced accounting partner can efficiently negotiate with software providers to ensure that new systems are correctly customised to your firm. They can also plan a smooth and smart rollout of the new software, ensuring that the most critical solutions are installed first.
How to outsource accounting services
For a simple transition to outsourced accounting services in Hong Kong, we propose the following steps:
- Consider the accounting issues you are presently dealing with and the solutions you want to find through outsourcing.
- Examine the budget you have for accounting outsourcing.
- Get in touch with a reliable accounting services provider. They will meet with you to discuss your present position, assist you in gathering the essential information and advise you on the next steps.
- Inquire about the firm’s accounting software options to discover which is best for your company.
A good provider will prioritise the critical tasks that require attention. Once things are under control, they will collaborate with you to develop a comprehensive end-to-end accounting solution for your company, as well as a tailored approach to advice.
To set the initial onboarding and subsequent relationship up for success, evaluate who in your organisation is most suited to engage with them directly.
The designated individual might be a finance manager, CEO, firm owner or director; the most essential thing is that they have extensive financial expertise and can discuss financial topics in depth. This will also assist in guaranteeing that the final solutions are matched to your specific requirements.
Making the right choice for your business
Like an in-house team, your accounting services provider should integrate smoothly with your firm and have a deep awareness of your challenges. Your partner should deliver all the benefits of an in-house team while eliminating all the negatives. Once we have gained a deep understanding of your issues, we can provide all the benefits of an in-house team while removing the disadvantages.
From accounts receivable and payments to general ledger and financial reporting, a full-service business can handle all areas of your accounting and bookkeeping. They will also be able to give business support in other areas, such as cash flow management, to assist your firm in meeting its objectives.
“Our accounting solution at BoardRoom extends beyond transactional processing,” Shuzhen explains. “Financial data may be quite beneficial, and we utilise it extensively when advising our customers.”
It is critical to seek an experienced accounting services provider since they can quickly and readily discover effective solutions to any accounting difficulties you may be experiencing. You will also know that the next time your firm is audited, it will have followed all of the proper protocols.
Accounting outsourcing: what to avoid
If you’re thinking about switching to accounting outsourcing, get started now.
Businesses sometimes waste valuable resources attempting to handle accounting issues independently when an external services provider might have stepped in far earlier and implemented solutions in a much shorter time.
Even if the organisation is small, financial commitments and difficulties can swiftly add up. So, if you are establishing a new organisation or branch in a neighbouring nation, it is important to hire an external team from the beginning to verify that the proper accounting processes are in place.
The longer you put off outsourcing, the more difficult and time-consuming it can be to organise your finances and resolve problems.
What are the benefits of outsourcing for business growth?
If your firm has expansion plans, an accounting services provider might be a beneficial business partner.
They can help you by:
An accounting partner can also assist in establishing internal accounting controls at your headquarters and implementing these among finance units in other countries. Because you have identical internal controls throughout your regional sites, you can quickly generate reliable group-wide statistics at any time of year.
Compliance with multi-country regulations
Accounting partners also help businesses thrive by guaranteeing full regulatory compliance, including drafting and submitting statutory reports.
In terms of your Hong Kong duties, an accounting partner will ensure that all your Hong Kong Financial Reporting requirements are completed and filed on time. Choosing a provider who supports multiple regions is crucial as other APAC areas will have distinct regulatory regimes, some of which may be quite rigorous and complicated.
They can also ensure that your business is achieving its local compliance obligations on an ongoing basis by consolidating taxes with a worldwide organisation.
Begin your transition to outsourcing your accounting services
An expert accounting team working in close partnership with your internal team is critical to ensuring a smooth and lucrative trajectory, regardless of where you are in your expansion journey.
Related Business Insights
12 Jul 2023
Hong Kong executives can engage an external company secretarial services provider or fill the role internally. Lear …READ MORE
30 Jun 2023
The evolving nature of commercial law can make workforce compliance challenging. Find out how specialist payroll se …READ MORE
29 Mar 2023
Elevating your corporate governance in Hong Kong can help you remain compliant and retain skilled employees. Ensure …READ MORE