Outsourced Bookkeeping: What And Why?
There is no denying that the financial recession of 2007 or what it has been called by some
, The Great Recession, has left a bitter taste in the mouths of many individuals throughout the world. This bitter taste seems to have become a little more bearable thanks to not only the daily advances in technology but also the creative minds, primarily within the financial industry, that have adapted their business to the ever-struggling economy.
Ever since the 1980's multinational corporations have been outsourcing services for numerous reasons but first, what exactly is outsourcing? Outsourcing, in short, is the allocation of services to a third-party company. In the 1980's offshore outsourcing became attractive to owners of large corporations for many reasons but one of the leading factors was to cut costs.
With this being said, a new trend of outsourcing has began and it is has been made available by the financial industry to try and help small business owners cut costs to try and compensate for the amount of business lost. According to Victor Quinn, co-owner of www.VirtualAccountingOnline.com, said "The primary objective of VAO is to not only lower costs increase security, and ease the process of cash flow for business owners but also decrease the probability of employees becoming laid off." Victors partner, Nicholas De Luca stated, "The economy wont have a fighting chance without consumers..." Expressing his concern regarding a further increase in the unemployment rate.
The good intentions shown by companies like VAO seem great but is it to good to be true? Absolutely not, outsourcing proved beneficial in the 80's and is the exact reason why it became a popular trend. How exactly does outsourced bookkeeping cut costs and increase security?
First, to understand the benefits of these services it must be made known that in order to obtain the benefits of outsourcing it is no longer required to know a company overseas. Companies like VAO and some others are actually located within the United States but still offer the ability to reduce overhead, ease cash flow, and increase security.
These companies are now referred to as "Outsourced Services", "Cloud Services", or "Virtual Services". There are many techniques in place to help the business owner reduce overhead but one of the most popular seems to be a "pay-as-you-go" type of relationship. Instead of paying for services monthly or annually you have the ability to just pay as you need a task completed. Of course this method wont work for everyone, particularly a large company due to the fact that the more activity within a company equals more work for the accountant/bookkeeper. If this method does not seem to work for your company then payment can be handled like it is with any other accountant but the rates are still half that of hiring an accounting firm or having one in-house.
These virtual bookkeeping companies often double as your own personal debt collector, account manager, etc. The reason being is because with today's technology these companies have the ability to handle all of your banking needs whether its paying vendors, payroll, utilities, etc. No longer do business owners need to feel the stress of paying bills and keeping track. It is the outsourced bookkeeper or virtual accountant to handle finances and to make sure the company is operating within its financial means.
Increased security? That's right, increased security is also a top reason for using these kinds of services. These virtual outsourced companies, although the method varies between companies, have a secure online system where financial reports can be posted to for the business owner to retrieve, view, or delete. Basically this system is in place to give the business owner a 24/7 understanding of how the business is operating.
It is thought by these companies that if they can save business owners some money they wont have to go through with laying people off.
by: Freelance Article Writer
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