If you have ambitions to expand throughout the Asia-Pacific region (APAC), outsourced accounting services can help your firm grow smoothly in a challenging economic climate.
Business owners sometimes feel intimidated by the thought of working with an outside team because of the complexity of the accounting function. So, can accounting be outsourced? This article covers how outsourcing supports an intelligent business model and what you can do to make the transition go smoothly.
Why outsource accounting?
APAC firms are increasingly choosing to outsource accounting services because of the many benefits they offer. According to a 2020 global study, over half of finance and accounting professionals are considering outsourcing additional tasks.
There are three primary reasons for this trend.
1. Access to knowledge and expertise
Firstly, outsourcing makes it possible to hire experts with high levels of specialised knowledge and experience – professionals that are sometimes difficult to find through traditional hiring processes.
According to Yang Shuzhen, Accounting Director at BoardRoom, “Often, companies outsource because they’re looking for specialists who can improve their processes.”
The typical daily responsibilities of operational teams and supervisors are intensive and leave little time to objectively analyse procedures and spot improvement areas. An external team can help in many areas, and this is one such area.
Shuzhen notes that many people returned to their home countries after the COVID pandemic. As such, many organisations need help finding the essential skills and experience required to fill positions due to the tight labour market this has caused.
2. Fast and trustworthy service
Secondly, accounting outsourcing offers immediate, effective assistance when the turnover rate for financial personnel is significant.
“A lot of financial professionals want to take a break or try a totally new industry,” says Shuzhen. “So people are leaving, and in many cases, businesses are not able to replace them quickly enough.”
Worker shortages and poor handovers can lead to transactions and procedures going awry. Thus, businesses encountering these difficulties will seek the assistance of an external firm with a pool of qualified, experienced accountants available to evaluate the problem and swiftly support with processing.
“They require experts who have the knowledge to guide them in the future in addition to taking over their accounting duties,” says Shuzhen. “Standard operating procedures and internal controls, which are essential for success, can be established with the aid of an external team.”
3. Digital transformation support
The accounting sector is going through a period of significant change due to increased digital transformation, creating opportunities to turn data into valuable business insights. In addition to executing transactional activities, the finance department is now expected to advance strategic company goals. As a result, the required skill set for finance professionals is changing.
To fulfil finance’s new position as a strategic business partner, organisations must mix human and machine-based skills while also exhibiting the four characteristics of future-ready companies: analytical, adaptable, agile and anticipatory. This is according to a 2020 Deloitte study.
The technical know-how and data analytics capabilities necessary to accomplish this can be challenging to maintain internally. This is why many organisations turn to premium accounting firms as a solution.
The effects of the COVID-19 pandemic have pushed outsourcing demand even further. By 2026, it is predicted that the worldwide finance and accounting outsourcing market will be worth USD 53.4 billion by 2026. This is primarily because corporate services companies can meet the industry’s demand for efficient solutions and stability during difficult times.
Challenges associated with in-house accounting
Businesses in the APAC region are turning away from in-house accounting for two main reasons.
It can be labour-intensive
It takes time to find, train and manage a financial team, and it also takes time to expand the team as your company grows.
“A company that is fast growing will see a lot of resources going toward educating the staff, maintaining morale and ensuring the team is performing properly,” says Shuzhen. “This is crucial because timely reporting and accurate financial information help the company when stakeholders are making decisions.”
But resignations can be demanding on a team. Businesses may invest time in providing the new team with adequate handoff and training, but because there will be a learning curve, it is doubtful they will have the same immediate impact as the last team. Additionally, there is no assurance that the employees will be around for a long time.
Shuzhen says that “Deliverables may be impacted by frequent transitions and short handover times.”
It can be challenging to adapt to technological change
Internal teams are under pressure to embrace new accounting systems that are more complicated than conventional ones due to the digital advancements occurring throughout APAC.
Although this adaptability is crucial for sustained productivity, the Great Resignation’s workforce shortages mean that there is often not enough time to guarantee that new processes are properly implemented. As a result, the new software can become more of a burden than a benefit, adding to the delays and costs.
A skilled accounting partner can connect with software providers to guarantee that new systems are customised to suit your company. Thanks to their ability to plan a systematic and trouble-free implementation of the latest software, they can ensure that the most crucial fixes are performed first, saving you time and reducing costs.
Accounting outsourcing: here are the steps
We recommend taking the following actions for an easy transition to outsourced accounting services in Malaysia:
- Consider the challenges you are faced with and the problems you are hoping outsourcing can help you with.
- Analyse the available funding for accounting outsourcing.
- Make contact with a premium accounting services company. They will converse with you to understand your current situation, assist you in compiling all the relevant data and provide guidance on what to do next.
- Ask about the accounting software options the company offers to get the best solution for your company.
A capable provider will focus on the most important jobs first. Whether this means creating solutions for immediate problems or troubleshooting existing issues, your primary concerns will be addressed before moving on to the next steps. Once these issues are under control, they will collaborate with you to develop a comprehensive end-to-end accounting system that works for your company and offers you individualised support.
It is also important to think about who within your organisation would be the best to communicate with your supplier on a one-on-one basis to facilitate effective and seamless communication.
The essential factor is that the appointed person has excellent financial knowledge and can discuss financial topics in detail. The chosen individual might be a finance manager, CEO, firm owner or director. Additionally, it will guarantee that the merging solutions are specific to your needs.
Choosing the best provider for your company
Just as an in-house team would, your accounting services provider should seamlessly integrate with your company. Once we have gained a deep understanding of your issues, we can provide all of the benefits of an in-house team while removing all the disadvantages.
From your accounts receivable and payable to your general ledger and financial reporting, a full-service business can handle all facets of your accounting and bookkeeping. To assist your organisation in achieving its objectives, they will also be able to offer business support in other areas, such as cash flow management.
“At BoardRoom, our accounting service extends beyond transactional processing,” says Shuzhen. “Financial data can be valuable, and we utilise this data to the fullest extent when advising our customers.”
It is important to choose an experienced provider because they will be able to quickly and easily pinpoint workable solutions to any accounting problems you may be experiencing. Also, you will be able to trust that your business has adhered to all regulations the next time it is audited.
Accounting outsourcing pitfalls you need to avoid
Avoid postponing your decision if you are thinking about switching to accounting outsourcing. Businesses frequently waste resources trying to address accounting difficulties on their own when an external services provider could have stepped in much sooner and implemented solutions much faster.
Even a small organisation can have a build-up of financial problems and commitments. For this reason, involving an outside provider from the beginning is vital if you are establishing a new business or branch in a neighbouring country. They will ensure that the proper accounting procedures are in place from the start.
The more you wait to outsource, the more difficult and time-consuming it can be to manage your funds, potentially exposing your business to unnecessary risks.
The ways outsourcing can accelerate business growth
An accounting services provider can be a crucial business partner on your growth journey if your firm has expansion goals.
They will be able to help you by:
An accounting partner can assist with setting up internal accounting controls at your corporate headquarters and implementing them within the finance departments of other countries. You can quickly provide reliable group-wide statistics at any time of the year if you have similar internal controls in place throughout your regional sites.
Maintain compliance across multiple countries
Accounting partners also help businesses thrive by guaranteeing complete regulatory compliance, including creating and filing statutory reports.
Concerning your Malaysian requirements, they will ensure that all Malaysia Financial Reporting Standards are satisfied and SST returns are submitted on time. Different regulatory frameworks, some highly onerous and complicated, may also be present in other APAC areas. Therefore, having a provider that supports multiple regions is essential.
Begin your transition to outsourced accounting
No matter where you are in your expansion process, setting up your accounts is essential for guaranteeing a straightforward and successful course.
Contact BoardRoom for more information:
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