Your business enterprise might be centered on the key products or services you deal with. But, that doesn’t mean you don’t invest thousands of dollars on ideally avoidable, but equally critical activities such as bookkeeping. That being said, the financial investment that goes into the maintenance of your bookkeeping department is hardly the only argument against it. There is also the investment of time that you willingly take out to ensure that an entire department, or worse, multiple departments are functioning smoothly. This slows down your business operations since there’s this added pressure to perform, for the consequences of making errors are severe. This is especially true for your financial management endeavors, we all know the Canadian Revenue Agency has a reputation to maintain. How does a standard business avoid this slowdown and instead focus their energies on other more directly productive pursuits? By outsourcing the following financial management duties:
Bookkeeping represents the quintessential financial function that arguably drains more money than comes out of it. But then again, bookkeeping also represents one of those activities you can’t really do without. Why is that? It’s because the consequence of making errors can lead to steep fines. If your bookkeeping services are handled by the same financial management firm that also handles your tax audits, you can be sure that the team will never give the CRA any serious reason to complain.
Besides, businesses also face the issue of privacy. When a business opens up their books of accounts or their internal financial records to an in-house department, a lot of information is left vulnerable. On the other hand, the same is not applicable when an external firm is working on your books of accounts since there are confidentiality clauses and issues of professionalism that are applicable there. Speaking of professionalism, it’s also important to remember that a professional entity cares about their quality of services (and their reputation), and hence, there is greater certainty of accurate accounting.
Payroll represents another very commonly outsourced function. Manually keeping payroll not only demands a substantial investment on your part but it also needs you to be extremely accurate with your assessment. This, implying there is the need for attention to detail on the part of those maintaining the monthly or weekly records, and on the part of those who are interpreting the data that is collected into eventual numbers. While we agree such an activity is critical to your business operations, but it is not worth the engagement of an entire department for the cause.
Let’s talk money now. The idea of cost-benefit never ceases to interest a smart business. When you outsource your payroll functions, you incur several financial costs beyond the scope of engaging your personnel for the task. For instance, you incur printing costs, the costs incurred while generating reports, and let’s not forget, the costs you incur while remitting payroll taxes and returns to the respective government agencies. Also, the government agencies need you to comply with each existing policy and pay attention to any amendments to the same. There’s a penalty in store for those who fail to adhere to them. Do you intend to take the chance? Outsourcing payroll functions can save you a lot of headache.
Now, here’s one of the most important tasks that any business, regardless of its size, must pay special care to. Unless you have a full-time accounting department equipped with all necessary knowledge that goes into preparing returns, you’re exposing yourself to great risks. This is because CRA accountants are very quick to spot any irregularities that they come across, even if the irregularity is a result of an honest mistake on your part. Furthermore, the reason why it’s a serious hassle to maintain your tax records yourself is that you need to keep yourself updated with every minor change to the existing taxation policy framework. This requires expertise and precision on the part of your accounting department as irregularities are often harshly penalized. But, let’s not forget the primary reason you outsource your taxation functions to tax shelter accountants. It is to avoid personal audits and be represented by a competent team in your engagement with the CRA accountants, if it ever comes to that.
Risk management is a function that most businesses tend to be apprehensive about. Most businesses don’t have a designated department for the function and they prefer to rely on other members of the organization whose area of expertise doesn’t lie in the field. What are the benefits of outsourcing your risk management functions? A professional risk assessment team prepares you for a rainy day, as it prepares a crisis prevention plan that accounts for your company’s current financial position and factors in your range of assets and liabilities. While it’s always better to not get to the position that needs you to rely on a crisis management plan, it’s always better to have the certainty that you’re prepared for the unpleasant circumstances. On the other hand, a risk projection report that a professional team prepares will also prepare you for what can go wrong for your business. Based on these projections, they can help you prepare strategies to prevent these unpleasant situations.
Outsourcing has truly been the way forward for most businesses since modern businesses function (and prosper) today on the basis of their specialization. Your business is a specialist in its field and this naturally means that you’re going to have your blind spots when it comes to other areas of operation such as bookkeeping and preparing taxes. Why not rely on specialists to deal with these tasks? Contact us at Altitude Accounting to consult with our team, which consists of tax specialists and former CRA accountants. We know the system inside out and we bring it all to the table for a mutually beneficial partnership.
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