• Benefits of Outsourcing Accounting Function

When businesses expand and their responsibilities pile, it tends to cause their manpower to be spread thinly. A way that businesses may relieve some of this burden is by outsourcing some of their functions, such as for accounting.

In doing so, there are many benefits which will be discussed later in this article.

Outsourcing for Accounting Services

As your business grows, the risks of overlooking misstatements and financial errors are high, especially when there are too many minute details to examine.

By outsourcing your accounting function, the experienced accountants are able to focus on the updated key figures to allow businesses to make an informed decision without being overwhelmed by all the information.

One reason contributing to the ease of business is the availability to outsource their accounting services. Some of such services are:

Advice: It would be wise for the local accounting service provider to be operating from their home country to ensure they are more familiar with the requirements for the schemes and grants!

Should You Hire an Accountant/Accounting Service Firm

When deciding between hiring an accountant or an accounting service firm, it is important to evaluate the needs of your business.

It is common for small companies to start with the usage of financial software programs to assist them in managing their accounting functions such as managing cash flows, financial reports and other related matters until the responsibilities and scope of work expands beyond your capacity.

When the time comes and too many responsibilities accumulate, it is advised for the business to give the responsibility of accounting functions to a certified individual or firm.

What are the Benefits of Outsourcing your Accounting Functions?

Through outsourcing, especially if the accountants are from their home country, there are benefits such as language barrier and familiarity with local regulations.

Consultants from the local firms would be able to advise on the best type of tax incentives and exemptions offered, for example:

Discount  Eligibility  
Public Company Discount Eligible public companies are entitled to a tax discount of 3% off the standard rate of 22% for fiscal year 2020/21 or 20% for fiscal year 2022, thus providing an effective tax rate of 19% for the fiscal year 2020/21 and 17% for fiscal year 2022 onwards.  
Small Company Discount Eligible small enterprises are entitled to a 50% tax discount of the standard rate which is imposed proportionally on taxable income on the part of gross turnover up to IDR 4.8billion. For enterprises with a gross turnover less than that are subject to final income tax at 0.5% of turnover. 

Although it is seen as an unnecessary burden on the expenditure of the company, outsourcing gives the company an advantage above others as it allows the company to be up to date with data and knowledge.

Here are 10 Benefits of outsourcing your accounting functions in Indonesia:

1. Cost Saving

When you outsource your accounting functions, you save on having an internal accountant, saving on monthly salary, annual leave, time in lieu and sick leave that would be needed for permanent employees. 

2. Time Saving

By employing accounting firms for their services, you employ ‘instant employees’ and save time on training, recruiting and other employee-related activities.

3. Worry-free for deadlines and timeline

With the help of your accountant, you would not be needed to worry about the submission or reporting deadlines as the service providers would do it for you. This relieves the burden of deadlines and allows you to focus on other aspects of the business.

4. Better quality of work

Outsourced accounting providers will honour the service agreement because they need it as part of their business as compare to permanent employees who probably only worry about the next pay check.

5. Always up-to-date with latest regulations and legislations

Another advantage of having experts is that they are updated with the latest regulations and legislations relating to accounting functions.

Corporate Secretarial checker

6. Only pay for what you need

Outsourcing your accounting function also means that most of the time, you will only be charged for services that you use as and when you require them.

7. Streamlining your business

Outsourcing accounting services usually proves to have fewer errors due to this streamlining and thus, you would have to spend less time trying to rectify mistakes.

8. Access to the latest accounting technology

Together with the service, you are more likely to also get the latest in accounting technology. By outsourcing, you no longer need to spend so much time researching on accounting programs.

9. Drive core business functions

Through outsourcing your accounting, it allows the business to put money towards activities that will increase revenue as compare to hiring an internal accountant that would not necessarily drive revenue.

10. Increase controls & Reduce Fraud

In small companies, it is common for accounting to be managed internally in the hands of one or two people, posing higher risk of fraud. By outsourcing and moving the responsibility to a third-party, it reduces the risk of fraud and allows for greater internal controls.

This is all especially true for multinational companies as they would need assistance with the local regulations, infrastructure, and business landscape of Indonesia. Outsourcing is the way to easier businesses and expanding into foreign countries or even locally, allowing businesses to dedicate their focus to other areas.

Starting a Business in Indonesia

If you require assistance with your international tax planning or accounting functions, we at Paul Hype Page are able to serve your needs in this area. Our accountants will work with you to ensure that all the steps we take are completely legal in both Indonesia and any other country involved.

Thinking of setting up your company in Indonesia? Reach out to us for free consultation on company incorporation and other corporate services like accounting today!

whatsapp us
contact us

FAQs

Do startups need to hire a professional accountant?2021-11-09T16:18:24+08:00

It depends on the owner’s background and expertise. If a business owner has no clue where to start and the basic accounting knowledge, it is best to hire one to make sure the company is complying with the annual compliance. 

How do I evaluate if I should hire a professional accountant for my business?2021-11-09T16:15:41+08:00

You should consider hiring a professional accountant for your business if you are not familiar with Singapore’s corporate tax regulations, requirements, and tax laws. It is also a sign to hire a professional accountant for your business if you are not sure when to register GST. 

Should only big companies consider outsourcing their accounting functions?2021-11-09T16:15:21+08:00

No, Small companies who has just set up their company should and can employ outsourced accountants to help with the accounting functions especially if the owners do not have any accounting knowledge or intends to focus on other aspects of the business. 

Is it safe to outsource accounting functions?2021-11-09T16:13:47+08:00

When choosing a service provider, you should review their security measures, their data storage, data security and staff awareness. 

By outsourcing, it also promotes less fraud as a third party will be handling accounting functions.  

Share This Story, Choose Your Platform!

Just keep reading…

Join our PHP Community ID Forum - Expert Tips & Resources

Join the discussions

Go to Top