If you’re a business owner, you’ve got plenty of options nowadays for expert services - one of which is remote accounting. A good remote accounting team can provide critical financial assistance to your business, from bookkeeping to financial analysis and beyond.
Today I will tell you all about the benefits and drawbacks of hiring a remote accounting team and whether it is the right choice for your business. Who knows, it could end up being a valuable resource for you for a long time!
Benefits of Hiring a Remote Accounting Team
The most obvious advantage of hiring a remote accounting team is the potential for cost savings. Remote teams give you access to highly skilled accountants at a fraction of the price you would pay for an in-house team.
This is mainly because outsourcing your accounting needs can help you save on expenses like office space, equipment, and employee benefits.
Companies that may not have the resources can benefit hugely from not having to hire a full-time in-house accounting team, especially for the 13% of families in the U.S. who own a small business.
Access to a Bigger Talent Pool
The best part of outsourcing your accounting services is that you are no longer limited by geographic boundaries, giving you access to a broader range of professionals with unique skill sets and expertise.
You definitely want a diverse talent pool because your accounting team needs the right skills. For example, to meet the unique needs of your business, your accounting team may need to know how to use your CRM (customer relationship management) software for your customer service requirements.
When using CRM software, look for software with crucial features such as self-service, ticketing systems, and AI-centered automation.
Remote accounting teams offer unparalleled flexibility as far as working hours, and availability goes. Succeeding in business nowadays means you have to be able to adapt - fast. Businesses that operate in multiple time zones or have fluctuating workloads can benefit from the flexibility of a remote team of accountants.
Your business will keep growing, which means your accounting needs will too. Remote accounting teams are highly scalable and can grow alongside your business. However, scalability works both ways. You can partner with remote accountants only during the busiest times of the year, such as the tax season or the holidays, and scale down once the busy times are over.
Improved Technology and Security
This is an underrated benefit. Remote accounting teams are known to use the latest technology and software, which is excellent for ensuring financial data is accurate and secure. The last thing you want is accounting errors when it’s tax time.
Remote teams often have access to advanced security solutions, which can help protect sensitive financial information, including receipts, tax information, and credit card numbers.
Protecting credit card numbers so you can continue to accept card payments is especially important, as a recent study found that 83% of people prefer to purchase items with cards.
Drawbacks of Outsourcing Your Team
Bad communication can be the kiss of death for your relationship with your accounting team. Time zone differences, language barriers, and cultural differences are just a handful of potential pitfalls you can run into.
You must establish clear communication channels and invest in tools and technology that help with communication. This is not the time to cheap out. Miscommunications can spell huge expenses, not to mention legal trouble if mistakes made are bad enough.
Outsourcing your accounting team might not be optimal if you're a control freak. This can be particularly concerning for business owners who rely heavily on accurate financial reporting. Without a clear framework for oversight and accountability to mitigate this risk, your decision to outsource your accounting could end in disaster.
Risk Choosing the Wrong Team
Let’s not beat around the bush - outsourcing is a risk. There’s always the chance you could choose a remote accounting team that isn’t the right fit for your business. Conduct thorough research and exercise due diligence before choosing a remote team to ensure they have the necessary skills and qualifications. You’ll thank yourself later.
Data Security Dangers
It’s an uncomfortable topic, for sure. Every day, we hear about another major data security failure somewhere. Remote accounting teams are not immune to this. Although they’re usually more tech-savvy than most, sharing your sensitive financial information with a third party is always a higher risk than having an in-house team.
To protect your data, choose a remote team with robust security protocols and conduct regular audits to ensure compliance with data protection regulations.
Legal and Regulatory Risks
These risks are possibly the biggest risks of all. You must be aware of potential legal and regulatory issues that come with outsourcing a team, especially an accounting team. You will have to navigate many laws, including international tax laws, employment regulations, licensing requirements, etc.
Compliance will be complex and time-consuming. It’s almost too obvious to say that you should work closely with legal advisors so your remote team is well-versed in the regulations applicable to your business.
Making the Decision
After you’ve weighed these pros and cons, the last thing to consider is your business’s specific needs and priorities. So here are some factors to consider to help you choose:
What Are Your Current Accounting Needs?
You have to know what your needs are before you hire a remote accounting team. For example, how big is your business, and how complex is it? What are your financial reporting requirements and growth projections? These questions will help you determine whether a remote team can provide the services you need.
Here’s what James Wang, CPA at CreditYelp, had to say:
“Start by conducting a strengths and weaknesses analysis. Before hiring the team, figure out where your accounting department does well and what operational challenges you have. Identify all your sources of revenue, such as projects and service revenue, to make it easier for the team to plan and identify growth opportunities.”
Organize your invoices and receipts to accurately predict your company’s cash flow, including how much you owe, what is owed, and the projects completed.
Prepare your financial statements to gain insight into your company’s progress and avoid overpaying taxes.
Since you’ll be dealing with a remote accounting team, invest in cloud accounting software or customize one if it’s already in place. That will allow you to sync and share your accounting operations with the team quickly and securely.”
What Is Your Budget?
As mentioned before, cost savings are a big reason to go with a remote team for accounting. But is outsourcing your accounting team financially viable? Only you can decide. Remember that while initial costs may be lower, they aren’t the only costs involved. There could definitely be additional expenses related to communication, oversight, and legal compliance.
How Important Is Communication/Collaboration?
Working with a remote team may be challenging if your business relies heavily on collaboration and communication. However, you can overcome this with the right tools and processes. Is your business willing and able to invest in the necessary technology and resources for effective communication with a remote accounting team? If so, outsourcing may be a wise decision indeed.
What Is Your Business’ Risk Tolerance?
As said before, hiring a remote accounting team comes with many benefits but also with many inherent risks as well. For example, there could be data security concerns and potential legal issues.
Assess your business’s risk tolerance to determine whether you are comfortable with these risks. If you decide to move forward with a remote team, have processes in place to manage these risks effectively.
How Do You Find a Good Accounting Team?
If you decide that a remote accounting team is the right choice for your business, you must invest time and effort into researching potential teams. Look for teams with a proven track record of success known for using strong security protocols.
Consider the team’s location and its potential impact on communication and collaboration. And don’t forget to ask around - word of mouth can be a reliable indicator of a good team.
- Why Traditional Accounting Is No More
- Remote Accounting: 5 Strategies for Maximizing Efficiency and Productivity
Carefully consider the benefits and risks of hiring a remote accounting team, and you can greatly benefit from the decision. The reward could be cost savings, access to a larger talent pool, and scalability. That said, don’t ignore the possible drawbacks - communication challenges, loss of control, and data security concerns.
Evaluate your business’s specific needs, priorities, and risk tolerance. Then, conduct thorough research and consider the factors outlined in this article, and you can make an informed decision that best supports the success of your business.