Accounting outsourcing as an ally in financial control (Part 1)

Businesses are incorporated with a purpose, a vision, and a mission, engaging in value-generating activities and striving to set themselves apart from other businesses. In the corporate world, this is known as “core business”. Without a doubt, every organization must focus its efforts on its core purpose. To achieve this, outsourcing services can become a strategic ally by delegating to third parties the activities that are not directly related to the core of the business.

One of the most commonly outsourced activities in the business world is accounting. Many corporations entrust a professional firm with keeping their accounting records, preparing reports, and analyzing financial data. Thus, if the provider is the right fit, management gains an ally for the financial control of its business.
In addition to the primary goal of focusing management’s efforts on the business, there are other practical or circumstantial reasons to outsource the accounting function, such as:
  1. Foreign companies entering a new market that require financial accounting advisory services in a new business environment.
  2. Companies facing serious issues with their accounting due to various factors. Delayed or inconsistent accounting may cause Management to operate “in the dark”, unaware of their financial position and leading to tax violations.
  3. Companies for which the accounting process represents a substantial cost. In these cases, an analysis should be conducted to compare internal costs with the fees of an external service provider. 

To complement the above, some companies are required to report to their parent companies based abroad and need professionals who are not only well-versed in local financial and tax reporting but who are also familiar with the standardized reporting required by their economic group in another country.

Finally, if the accounting outsourcing service provider, in addition to carrying out the accounting process effectively, offers critical insight and professional advice, and alerts clients to the risks or special situations identified during their work, they become a crucial ally in managing the organization’s operations.

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