| Good accounting and bookkeeping services can | | | | There is now a new class of vendors (primarily from |
| considerably increase the likelihood of business | | | | India) who provide outsourced accounting and |
| success. | | | | bookkeeping services to clients who may need only a |
| The following two tables from The Small Business | | | | quarter-time accountant to clients needing three |
| Book (Robert Hamilton and John English) make the | | | | hundred accountants. |
| point eloquently. | | | | Outsourced accounting and bookkeeping service |
| Survival Related To frequency of accounting Report | | | | firms have several advantages: |
| Frequency Survival Rate % | | | | 1. They can train their staff consistently in accounting, |
| At Last month - 79 | | | | bookkeeping, or tax return preparation. |
| Quarterly - 71.5 | | | | 2. They are much less vulnerable in case of employee |
| Half-yearly - 49.9 | | | | absences, illnesses etc. |
| Annually - 36.0 | | | | 3. The outsourced accounting and bookkeeping |
| Survival in relation to accounting records | | | | service firms have to invest in quality control to |
| Accounting Records Survival Rate % | | | | retain clients. |
| Excellent –good -- 63.0 | | | | 4. For one price the customer receives a bundle of |
| Average -- 49.8 | | | | necessary skills, all the way from clerical level to |
| Inadequate -- 20.1 | | | | controller level. |
| Poor – non existent -- 2.5 | | | | Outsourced accounting and bookkeeping service |
| As one can see the difference between average and | | | | firms provide: |
| good accounting can make a 25% difference in | | | | 1. Flexibility in manpower requirement – one can |
| business survival. | | | | buy only the required services from outsourced |
| Until recently small businesses could not afford best | | | | accounting and bookkeeping service firms. |
| accounting or bookkeeping services. Small companies | | | | 2. The client is relieved of the need to hire, train, and |
| had to rely on part-time bookkeeping services, with | | | | manages staff. |
| no guarantee that the person will be available when | | | | 3. The client is also relieved of rent, computers etc. |
| needed. Part-time bookkeeping or accounting service | | | | 4. Considerable cost-savings. Outsourced accounting |
| providers cannot provide the diversity of accounting | | | | or bookkeeping services cost as little as 1/3rd. the |
| and bookkeeping experience needed. | | | | cost of comparable US resources. |
| Even for larger companies, there is a shortage of | | | | One of the arguments against using Outsourced |
| accountants. The number of accounting graduates is | | | | accounting and bookkeeping services is security or |
| down 25% and the number of CPA candidates is | | | | loss of control of data. Outsourced accounting and |
| down 22%. Since the need for accounting expertise | | | | bookkeeping services firms spend considerable time |
| is going up and the supply is down, the salaries for | | | | and energy to keep their data secure. |
| US accountants are increasing faster than inflation. | | | | To summarize, use of outsourced accounting and |
| Companies like General Electric pioneered outsourced | | | | bookkeeping services, can give the business owner a |
| accounting and bookkeeping services. Many large | | | | key tool that he can use to get timely, actionable |
| companies have followed suit. Typically they have | | | | information. It raises the probability of success at an |
| created captive operations with at least 300+ | | | | affordable price. |
| employees. | | | | |