6 Reasons Canadian Companies Should Consider Accounting Outsourcing
Accounting outsourcing is a strategic move to Canadian firms that are experiencing talent and skill shortages, as it can expand their capacity to deliver quality service to their clients, while staying within their budget.
This is in fact true for Canadian organizations facing higher-than-usual inflation rates. According to Trading Economics, the current inflation rate in Canada is 3.4% and can reach around 3.5 % by mid-2024. This economic scenario has prompted various firms to find the right solution to this current concern. One of the solutions that many organizations are considering is to outsource some of their tasks, especially their finance and accounting functions, to fight off the inflation rates.
In this article, we will discuss the benefits of outsourcing accounting services, and why you should also consider it.
What is Outsourced Accounting?
By definition, accounting outsourcing is when an external service provider provides you with a certain level of accounting support. This goes beyond just adding more staff, as it provides flexible and skilled options that save money for your organization.
For accounting firms and other professional services firms, accounting outsourcing can act as an extension of your firm. This means that outsourced accountants can give your in-house team the necessary admin accounting support — giving your firm the ability to meet the requirements of your growing clientele.
Why Should Canadian Firms Consider Accounting Outsourcing
Here are the six (6) reasons why Canadian firms should consider accounting outsourcing:
1. Talent Shortage
Let’s face the fact that it’s hard to get and hire the right people nowadays due to different factors.
According to the Chartered Professional Accountants of British Columbia (CPABC)
The growing demand for Certified Public Accountants is caused by two notable factors.
1. Aging population: British Columbia is experiencing a rapid increase in its aging population, leading to a need for CPAs to replace retiring professionals. This demographic shift has put pressure on organizations to find qualified individuals to fill these vacancies.
2. Labor shortages: Several other industries, such as the banking and tech sectors, are competing for quantitatively minded professionals. Often, they offer higher compensation than accounting firms, which causes the decline in qualified accounting candidates.
As a result, the shortage of CPAs in the workforce hurt existing employees, resulting in increased responsibilities, burnout, and limited organizational growth.
Hence, in response to the growing talent shortage, one solution that has proven effective is accounting outsourcing, since they have a more proactive approach to attract and retain CPAs. These measures are:
a. Offering competitive compensation to entice skilled CPAs
b. Promoting a healthy work-life balance to attract experienced professionals
c. Fostering a good working environment by emphasizing the importance of company culture.
This benefit can help Canadian organizations overcome the challenges posed by the talent shortage in the accounting industry and ensures the sustainability and growth of their organizations.
2. Robust Data Security
A top concern across all industries is data security, especially within the financial sector which is highly susceptible and vulnerable to breaches. Fortunately, the advancements in modern accounting technology have now made outsourcing safer. Cloud accounting software such as QuickBooks and Xero, for example, comes with advanced security features.
As a result, many organizations now entrust their accounting tasks to outsourcing providers that prioritize security as their utmost concern. When choosing an accounting outsourcing service provider, it is essential to ensure that they understand the sensitivity of financial information and implement stringent data security measures to safeguard client data.
A data security measure an outsourcing accounting provider should have is the strict implementation of internal data security protocols to prevent unauthorized access. They must also have regular training sessions and workshops to educate accountants on best practices in data security. This ensures they are well-informed and cautious when handling confidential financial information.
3. Cost-saving Opportunities
As mentioned above, the inflation rate in Canada is high so maintaining an in-house accounting department can be quite costly – from hiring and training staff to investing in accounting software and technologies. Hence, organizations can benefit from exploring different cost-saving opportunities to fight off the inflation rate — and in many cases, they're finding that outsourcing accounting functions is significantly less expensive and creates real- deal opportunities.
4. Access to Qualified Experts
A team of dedicated experts with specialized knowledge and experience in the finance and accounting field can ease the headache and burden of many Canadian organizations.
Established outsourcing providers possess sufficient experience and expertise in various accounting niches and industries. At the same time, they also have the ability to bring a brand new and fresh perspective to your organization, provide - unbiased insights that challenge existing assumptions and offer alternative viewpoints — all of which leads to improved decision making and innovative solutions.
5. Increased Focus on Core Competencies
Bookkeeping, tax compliance, and financial reporting are essential in sustaining an organization’s financial health, but they can be time-consuming at times. And for growing organizations, these tasks can limit their ability to focus on core competencies that directly contribute to revenue and growth.
Hence, many organizations not only in Canada have found it valuable to outsource these tasks to a reliable outsourcing accounting firm. Doing these can free up their valuable time and resources, allowing them to focus on what really matters - running and expanding their business.
6. Scalable Services
As your organization grows, so do your accounting needs. As we all know, scaling an in-house accounting department can be quite complex and costly, especially in the midst of higher inflation rates. However, one attractive solution that allows many organizations to have flexible and scalable solutions is to outsource their accounting tasks.
Outsourcing allows them to adjust the level of accounting services to accommodate their organizational needs, whether they require additional support during peak seasons or need to downscale during slower periods. These reasons are something that many organizations are considering as accounting outsourcing provides the necessary resources and expertise to meet each organization’s specific requirement.
The Bottom Line
Accounting outsourcing is indeed a strategic move and a game-changer across different industries, especially when fighting off inflation rates in countries like Canada. Organizations should consider the reasons mentioned above to go and try accounting outsourcing, particularly in low-cost nations such as the Philippines. By doing so, they can not only benefit from their outsourced team’s expertise but also save significant time and overhead costs.
Are you looking for a competent accounting team that can act as an extension of your accounting firm?
Consider working with us. D&V Philippines has been in the industry for over a decade and focuses on bringing the best accounting services to our clients.
We only offer accounting-related services to strengthen our expertise in the industry. When you choose to outsource your finance and accounting function to us you can trust that you are in capable hands. Schedule a free consultation with us today.
You can also get a copy of our whitepaper, Finding the Right Talents: D&V Philippines Solutions for Modern Accounting Firms, to learn how our dedicated team of experts undergoes rigorous training to stay ahead of industry standards, ensuring that you receive nothing less than the best quality service.