The Rise of Outsourced Bookkeeping Services: Trends and Insights
Each day, businesses of all sizes race to find new ways to improve efficiencies and reduce costs, all while honing in on their core competencies. The COVID-19 pandemic has only been catalytic in forcing organizations to evaluate their strategies and ushering in agile models that are conducive to low-cost, efficient delivery.
An important implication of this shift is the increasing practice of outsourcing support functions like bookkeeping and accounting. With 68% of U.S. businesses now outsourcing at least one part of their business process, the trend suggests that what was once a stop-gap measure for cash-strapped startups is now a strategic necessity for long-term success. This article will dig into the outsourcing trend to know why so many businesses are finding extra help by leveraging these outsourced bookkeeping services, what advantages they experience, and details on what is hot in the player-field of the business environment.
The state of outsourcing today
What I have learned is that in outsourcing there are two sub-planes: IT outsourcing (including cybersecurity and cloud computing) and business process outsourcing (including payroll, HR, recordkeeping, and accounting). Close to two-thirds of enterprises recognize that they need to contract out a core benefit and also relate it with an emphasis on basic company methods. By outsourcing HR through professional employer organizations, businesses saved a significant average of 27.2% in each product category last year.
The global outsourcing market was $92.5 billion. Statista: 37% of small businesses outsource at least one business function. Clutch, 2019 According to Deloitte, almost 90% of organizations feel cloud computing is critical to their outsourcing plans.
Nine-in-ten (91%) organizations have either an established security operations center (SOC) team or in-house security talent, according to Syntax’s 2021 IT Trends Report. Despite this, 83% of these same leaders are aiming to outsource cyber security services actively or already doing so.
What lies beyond outsourcing?
With the “great resignation” underway, remote and hybrid workplaces growing in popularity, and automation revving up with the introduction of new technologies, I believe that we can only expect to see the outsourcing industry grow.
The global cost for 2023 is expected to be over $730 billion. Spending on IT outsourcing could increase up to 22% by 2023 compared with 2019. This number should hit $519B. Global: Business process outsourcing spend is forecast to rise by 19% in 2023 compared with 2019, to $212bn. As per Grandview Research, the business process outsourcing market is estimated to grow at 7% CAGR with a revenue forecast of $525 billion by 2030.
Technology and Automation Progress than Ever Before
The increase in outsourcing bookkeeping services has been due to the rapid technological innovation advances along with accounting software and the ease of availability of cloud-based platforms.
By introducing this latest technological innovation into play, outsourced bookkeeping providers streamline their financial record management service delivery by applying digital tools and process automation to harmonize bookkeeping operations, resulting in cost-effective and lucrative solutions.
The emergence of cloud-based accounting software provided an ecosystem for businesses to seek outsourced accounting functions, effectively allowing data sharing and communication.
Flexibility and Price Tag
One of the benefits of outsourcing bookkeeping for businesses is that they can save costs, which we will discuss later. This is because they spare people the need to have an entire accounting staff as bookkeeping is done by a provider of bookkeeping and accounting services.
Moreover, outsourcing bookkeeping services provides businesses with a greater ease of scalability, enabling them to adjust the services to be delivered depending on their goals and resources. By far the ideal outsourcing companies in India should be selected.
Benefits of Outsourced Bookkeeping Services
Outsourcing its accounting activities offers a wide range of benefits to businesses, such as operational excellence, increased accuracy, and acquiring highly specialized skills. Businesses that acquire bookkeeping services can take advantage in a number of ways from this association with experienced bookkeeping specialists.
By outsourcing their accounting work, businesses can gain all of the skills and knowledge that comes with hiring accounting professionals but without having to spend a large amount on professional development or staff training. Additionally, outsourced bookkeeping services make sure that records for the organization are current and accurate, maintaining accounting records that are both timely and accurate. This will allow you to comply with the provisions of regulators and avoid errors or discrepancies in accounting processes.
The Repercussions on the Accounting Profession and Businesses
The accounting industry and businesses are highly impacted by the increasing popularity of outsourced bookkeeping services. Businesses that provide in-house bookkeeping services have immediate financial management and administrative advantages along with the commitment towards a strategic business model because expertise-based billed pricing can parallel their profitability. Optimization of their core business without running extra time.
It, however, also demands change in the organization’s outsourcing and active relationship management. This involves regular evaluation of the services provided and whether they are up to standard, as well as transparency and performance evaluations.
In Conclusion
With trends and insights related to outsourced bookkeeping, businesses can recognize them well and thus make wise decisions by outsourcing accounting work in order to enhance financial management practices, which would lead the way towards sustainable development. Choosing the right outsourced accounting provider is incredibly important. In which the significant changes are taken place due to the recent trends in outsourced accounting and bookkeeping, and they are all managing very well the problems that still bookkeeping for CPAs or accounting firms have been facing. There are positive changes in the accounting industry due to these trends. We can all see these trends emerging, and by following the above-mentioned advice, firms are putting themselves in a fantastic position to do well into 2025 and beyond.
About the Author Bio:
Pramod has over 11 years of experience relating to finance and accounts in diversified industries. He is an expert in resource and process optimization, resulting in greater operational efficiencies.
Velan Bookkeeping, with 18 years of experience as an outsourced bookkeeping services provider in USA, offers cloud accounting and bookkeeping, AR/AP, payroll, and controller services for various industry verticals.
