6 Qualities of the Best Accounting Outsourcing Firms

qualities-of-best-accounting-outsourcing

Undoubtedly, partnering with accounting outsourcing firms has made finance-related tasks easier for a lot of businesses. In fact, 90% of finance and accounting business process outsourcing (F&A BPO) engagements are reported to meet their initial delivery performance and cost-reduction targets.

From the mundane jobs such as outsourced bookkeeping to the more complex ones like risk management service, BPOs have provided more time for businesses by taking these tedious tasks from them. This allows companies to focus on more important business matters.

Because of the clear benefits of outsourcing, it is only natural that companies seek its service. However, while BPO services are advantageous, it can also backfire if you don’t conduct research carefully about your prospective outsourcing partners. For instance, incompetent firms may cause trouble with miscalculated employee payrolls, or worse, have the Bureau of Internal Revenue haunting you for filing late tax reports.

Although these problems are really troubling, they can be completely avoided. Save yourself from future headaches by checking out the qualities to look for in the best accounting outsourcing firms.

Offers Reasonable Price


Competitive price is an important factor to consider when choosing an accounting outsourcing firm, but it should not be the sole basis in your decision-making. Cheaper price may sound good and enticing, but it does not necessarily translate to the best firm. Low-cost services shouldn’t stop at being inexpensive; it should also be able to provide quality and efficient processes at the same time.

Efficient Processes


According to a Forbes article, simplified and standardized F&A processes result to more information, more service, and more cash. When deciding which firm to choose, you should seek how their process works, and if they have the expertise in creating process that can provide you with more competitive advantages.

Impressive Track Record


Long and proven track record matters for businesses. When dealing with prospected firms, ask how long they have been operating, and the number of clients they have partnered with. Experienced BPOs have more likely dealt with issues concerning the tasks, and know how to avoid them in the future. The track record does not only ensure you are working with a seasoned service provider, but it also guarantees you are in safe hands.

Specialization in Complex Tasks


Different firms offer different services. As someone who lacks expertise in accounting, you are looking for a firm that is an expert not just in standard accounting, but also in the more complex branches of the job. It should be adept in outsourced bookkeeping, and at the same time be able to handle financial analysis, risk management service, and other complex tasks.

Aside from specializing in complex tasks, the best outsourcing firms should also be flexible. They should be able to catch on the latest trends in the industry, and meet their partners’ requirements and the changes in the state’s conditions.


Promotes Security


Dealing with financial information is a sensitive and crucial matter. Hence, your service provider should be able to secure their systems from external threats. They must be able to show how they are managing and securing information, in compliance with ISO 27001 standards. A certification to the said standard is also a good sign that you are working with a reliable accounting outsourcing firm.

In addition, since confidentiality issues may arise while doing business with BPOs, it is better to choose firms that are willing to sign a Non-Disclosure Agreement (NDA).

Values Transparency


Immediate access to your financial data is important, therefore, accounting outsourcing firms should be able to give that to their partners. Having knowledge on using cloud-based service software should help ensure that you are getting your data anytime and anywhere you need them.

While problems are part of every business, it does not mean that you should face those head on when you can totally avoid them. You wouldn’t have to suffer from failed outsourced bookkeeping tasks just because you’re not careful enough in choosing the best service provider. Taking note of the qualities above should let you screen prospective firms better and make more informed decision to help your business achieve success.
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The Consequences of Tax Evasion

tax-evasion

Probably one of the most needed skills in accounting is good financial management skills. Financial management refers to the planning, controlling, directing, monitoring, and organizing of monetary resources. Good financial management skills are needed to make sure that a company or individual can live to its means and avoid unnecessary financial crisis. There are many accounting outsourcing companies that offers financial management services for other companies to take care of their financial health. For individuals, they can seek professional help or take care of it themselves. But an individual looking to take care of their financial health should take extra caution especially to that one area they should keep a close eye on: tax management.

In the 16th amendment of the US Constitution, the Congress have had the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. This requires Americans to pay corresponding monetary value to the government. These funds mostly go in supplying the army, protection of the people, funding government projects, enforcing the law, and carrying out federal duties. The 2015 tax rates have 7 tax brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The amount of tax you owe depends on your filing status and income level.

According to the US Internal Revenue Service, the average annual tax gap for 2008-2010 is estimated to be $458 billion with a net compliance rate of 83.7. It has improved by little compared to $450 billion tax gap and net compliance of 83.1 for tax year 2006. Tax gap refers to the difference between the amounts of tax that should, in theory, be collected against what is actually collected. The compliance rate reflects that there are still margin of citizens that fail to properly pay their taxes. Since tax payment is a federal obligation, the law imposes punishment for those who won’t be able to pay their taxes.

Tax evasion or tax fraud is the purposeful illegal attempt of a taxpayer to evade assessment or payment of a tax imposed by the Federal law. Conviction of this tax crime may result in fines and imprisonment. According to the Internal Revenue Code section 7201, “any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

Tax evasion cases follow rigorous investigations. For companies, tax non-compliance can put the legal status of the company in a tight situation. To avoid tax penalties, it will be a lot smarter to comply with the law of the land. Because in your attempt to save money, you might just end up spending more in the legal procedures and causing you to lose more than you should.
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