Outsourcing accounting functions is a good idea
For many years, the United Arab Emirates has seen a massive increase of companies, and the need for legal aid in correctly managing the Books of Accounts is growing increasingly critical. The UAE Commercial Company Law 2015 and the UAE VAT Law both stipulate that accurate books of account must be kept for a minimum of five years. There are several advantages to outsourcing accounting services for your company. In the fast-growing economy of the region, it may be challenging for a business to manage its Accounting Activities while competing with others and complying with legal obligations. As a result, outsourcing accounting services may be a preferable way for them to proceed. An accounting outsourcing firm can aid a corporation in lowering operating expenses, generating earnings, and setting yardsticks for superior dominance and regulatory compliance.
What are Outsourcing Accounting services?
Outsourcing Accounting services is a business activity in which the accounting function is outsourced rather than handled by the company’s in-house accounting department. Outsourced accounting is a service that, for small firms, provides a full accounting department experience. Day-to-day transaction coding, accounts payable, accounts receivable, payroll, management financial reporting, and many more services are handled by an accounting department.
Why Outsourcing is important for a business?
Outsourcing is a departure from a company’s standard operating procedure. Though it comes with some dangers, such as inexperienced management, business unpredictability, obsolete technology abilities, and so on, it’s a wonderful way for a company to make the work process easier to handle. When a firm chooses to outsource accounting and bookkeeping services, it may continue to focus on and enhance its primary business areas. It eliminates the risks and costs of hiring more people, as well as gaining access to outside expertise that they would not otherwise be able to pay. Most firms do not consider accounting to be a fundamental competency.
How does outsourcing accounting functions help a business?
The basic goal of bookkeeping is to keep a complete and accurate account of all financial transactions in a logical, systematic, and organized manner. This guarantees that the financial implications of these transactions are accounted for in the books. It is a management tool for analyzing business performance. Now advantages of outsourcing this function are explained below:
1. Increase in profits
Accounting companies in the UAE give businesses enough time to focus on their core business skills by entrusting them with accounting services. The time-consuming operations of hiring, training, supervising, and reviewing the performance of internal accounting employees can be eliminated by outsourcing. Companies can devote more time to expanding their client base and launching new projects that will improve efficiency and profitability.
2. Reduces overhead expenses
Businesses that rely solely on internal staff for accounting activities incur needless overhead costs. Internally deploying resources for the accounting process results in unnecessary costs for salaries, payroll taxes, benefits, training, and recruitment. Companies might use the outsourcing partner’s services to eliminate these overhead costs.
An outsourced accounting firm can provide insight into future costs and earnings, as well as ensure that financial standards are followed. It can provide the organization with access to accounting and bookkeeping skills without incurring significant costs.
3. Quick and efficient decision making
When businesses are faced with the challenge of dealing with laws, rules, processes, and the adoption of new technology to make the accounting process more effective, the assistance of an outsourced accounting service provider becomes critical. Following changes in rules and the technology ecosystem, quick choices must be made and implemented. Outsourced accounting firms in the UAE give businesses access to up-to-date financial data.
4. Cash-flow management
With sound advice from accounting and bookkeeping services in the UAE, businesses could improve their cash flow management and hence improve their operations. A cash flow statement shows how much money a company has coming in from its current operations and other investment sources. The cash flow statement shows how much money the company makes from operations, investments, and financing. Companies that do not conduct cost-center accounting are often unable to focus on the most profitable cost-centers, resulting in losses. Companies that outsource to an accounting firm may be able to avoid making this costly error.
5. Implementation of new technologies
The accounting and bookkeeping systems have undergone significant changes and problems as a result of digitalization. Accounting activities have been revolutionized by automation of the accounting and bookkeeping processes, which has provided access to real-time data and the capacity to make bulk revisions in financial reports. Companies may find it difficult to retrain their employees to keep up with technological advancements. Outsourcing the services to an accounting firm, on the other hand, may provide firms with new technologies to help them enhance their financial records.
6. Avail business advisory services
A business can establish strategic plans for growth with the help of outsourced accounting services. They collaborate with clients to help them solve complex industry issues and capitalize on chances to expand, optimize, and defend their businesses. They are not only in charge of accounting, but also of providing a foundation for increasing earnings, improving cash flow, and expanding the company.
7. Helps avoid tax penalties
An accounting firm that is outsourced might assist a company in avoiding tax fines. The laws and regulations governing tax preparation and filing are changed on a regular basis. As a result, it’s critical to keep track of any modifications to these regulations. Any error made in the preparation or filing of taxes is costly and subject to penalties. If you outsource these jobs, they will be completed by specialists who are constantly updated and acclimatized to all changes, ensuring total precision and adherence to the current policies.
The Role of Alya Almarzooqi Auditors
Alya Auditors is a dedicated team with a stalwart accounting machine. We are the industry leader in outsourced accounting and bookkeeping services, and we can help you modernize your finance department. We not only take care of your accounting, but we also give you a platform to increase earnings, enhance cash flow, and expand your company. Our clients can relax knowing that we will provide them with the efficiency and financial acumen they require to thrive. In the UAE, we also provide Financial Advisory Services, Tax Consulting Services, Management Consulting Services, VAT Company Registration, Internal Audit for Companies, Business Advisory Services, and other services.