Introduction

Were you aware that only 20% of all new businesses established each year survive their first year? Only half of those twenty percent survive five years. Even though there are a variety of reasons why they don't succeed, many of them have to do with money.

Because money is required to operate, entrepreneurs must learn not only how to generate profits, but also how to manage those profits. As a result, accounting and bookkeeping are critical to a company's long-term success.

You're always stressed about time and money as a small business owner. You must balance the creation of a good product or service line with cost-cutting. You might find it difficult or impossible to control every aspect of a small business. Accounting is one area where you may feel you require assistance. Outsourcing accounting is a viable option to consider.

What does "outsourcing accounting" imply?

Outsourcing is the process of hiring another company or individual to manage various business-related processes and activities on your behalf, instead of using an in-house team or an individual.

As a result, hiring a service that provides a full accounting department experience is referred to as outsourced accounting. This typically includes everything from daily transaction coding, accounts receivable, accounts payable, payroll, and taxation to financial reporting management. It is a very common practise that is used by both small and large businesses.

Why isn't it a good idea to handle your finances on your own?

In the early years of a company's existence, it's not uncommon for the owner to take on accounting and bookkeeping duties directly. In order to save money on the cost of hiring an accountant, they look into the company's finances with only rudimentary knowledge of how they should be managed (in most cases). Even while there is a lot of reading material available on how to handle your own accounting and numerous online platforms you may utilise to make it easier, it isn't always efficient. This is due to the fact that most owners or junior accountants lack the necessary skills and experience, resulting in a high risk of error. Another drawback is that accounting and bookkeeping take a lot of time away from core business operations.

What advantages does outsourcing provide?

Every business is unique, and it is up to them to determine when it is appropriate to outsource their accounting. There are a number of factors that contribute to such a decision. The following are a handful of them:

It is cost effective

The cost savings are the true value of outsourcing accounting. You only pay for assistance not headcount. Employee costs such as benefits, insurance,

payroll taxes, and paid time off are eliminated when accounting is outsourced. By outsourcing your accounting, you can lower your overall operating costs.

Professional assistance

When you hire an accounting firm, you can rest assured that you will be working with experts. Having an accounting firm on your side ensures that your

financial reports are accurate and meet regulatory and compliance requirements. Accounting firms are experts at what they do, making them ideal for completing all of your accounting projects. Employ the services of a third-party accounting firm and rest assured that all of your accounting will be completed promptly and accurately.

Availability of cutting-edge technology

Accounting firms are constantly striving to stay ahead of the competition. Having the latest technology is an important part of being at the forefront. When you have access to the most up-to-date accounting technology, you can keep your bookkeeping up to date at all times. As a result, you'll have a better understanding of your costs and will be able to outperform your competitors.

More efficient use of time

When you outsource your accounting, you reclaim time that was previously spent on administrative duties. You can now use the time you used to spend on accounting to help your small business succeed. It can be distracting to do tedious tasks like accounting. Hiring an accounting firm frees you up to concentrate on your core business. Instead of wasting time worrying about whether or not your accounting is up to date, outsource it.

Are there any cons of outsourcing accounting?

Giving up control of your accounting to a firm can be difficult and unsettling in the beginning. When looking for the best outsourced accounting services, look for one that has a simple onboarding process, clearly defined roles within the team, well-defined policies and procedures, and excellent communication.

Conclusion

In China, it can be difficult to find a qualified in-house accountant. Companies must collaborate with their global headquarters. As a result, the accountant needs to be fluent in English and have a thorough understanding of the business. Furthermore, it may be difficult to ensure that everything is completed in accordance with the laws and regulations, as well as on time. When funds are limited, however, attempting to do everything yourself may appear to be the only option. While it may work in some areas of business, it is best not to take chances when it comes to accounting and bookkeeping, which is the lifeblood of your business. Outsourcing these tasks to the right service provider will help you save money and beat the odds in your first year and beyond.

Please contact us (inquiries@chinalawsolutions.com) to get in touch with a recommended accounting firm which can assist you in China. All inquiries are treated as confidential.