Outsourced Accounting Services Is Gaining Popularity In Singapore
Why Companies Are Outsourcing Their Accounting Services?
Outsourced accounting services in Singapore are experiencing rapid growth and gaining popularity due to cost savings, access to specialized expertise, increased focus on core business activities, scalability, technological advancements, and enhanced compliance and risk management. This growing trend is driven by the desire for efficiency, expertise, and flexibility in managing financial operations, making outsourcing a desirable option for businesses in Singapore.
In this blog content, we will examine why many businesses opt to outsource their accounting functions.
Five reasons why companies are Outsourcing Their Accounting Services
1. Cost Savings and Efficiency
One of the primary drivers for outsourcing accounting services is cost savings. With outsourced accounting services, Singapore companies can avoid expenses associated with hiring and training in-house accounting staff, purchasing expensive accounting software, and costly hiring expenses (which include paying into the Central Provident Fund for each employee).
On the other hand, outsourced account service providers can offer flexible pricing models, enabling companies to pay just for the services they need. This cost-effective approach helps companies to optimize their financial resources and allocate capital for other essential business functions.
Furthermore, outsourcing accounting services can significantly enhance operational efficiency. Professional outsourcing service providers can help to streamline accounting processes, efficiently handle complex financial tasks, and, most importantly, ensure compliance with Singapore’s ever-changing regulatory framework. Outsourcing accounting services also allows Singapore businesses to focus on their core operations and strategic objectives, leading to increased productivity and competitive advantage.
2. Access to Specialized Expertise
Accounting is a specialized field that requires in-depth knowledge and constant upskilling. By outsourcing their accounting services, companies will have access to highly qualified professionals with in-depth knowledge and expertise in financial management. These outsourced professionals possess up-to-date knowledge of local tax laws, accounting standards, and other regulatory requirements, assuring compliance as well as lowering the possibility of mistakes or penalties.
Outsourced accounting service providers often have qualified and certified accountants as well as finance professionals who are well-versed in accounting best practices. These experts often help companies optimize financial processes, improve budgeting and forecasting accuracy, and offer strategic recommendations based on solid economic data analysis. With access to this specialized expertise, businesses can leverage valuable insights to drive growth and profitability.
3. Scalability and Flexibility
Outsourcing accounting services provides Singapore companies with the flexibility to scale their operations efficiently. As businesses grow or undergo periodic fluctuations, outsourcing allows them to adjust their accounting resources accordingly. Outsourcing account service providers can quickly adapt to changing needs ensuring that companies always have the right level of support without the hassle of hiring and training new employees or letting go of existing staff during downturns.
Moreover, outsourcing account services enables companies to tap into a wider talent pool to streamline their accounting processes. By engaging a reputable account service provider in Singapore, organizations can leverage a diverse team of professionals who can also offer diverse experiences, ideas and perspectives to the table. This diversity can foster innovation and help businesses stay ahead in an ever-evolving marketplace.
4. Risk Mitigation and Compliance
Navigating complex regulatory landscapes like those in Singapore can be challenging for local businesses. Outsourcing their account services can help mitigate risks and ensure compliance with relevant regulatory laws. Service providers like APacTrust are well-versed in this area and actively stay updated on the changes in legal and regulatory frameworks. By leveraging the expertise of outsourced providers, companies can minimize the risk of non-compliance, avoid penalties, and ensure adherence to accounting standards and best practices. It will also help to ensure compliance with GST regulations and accurately file IRAS Income Tax returns on time.
5. Focus more on Core Competencies
Outsourcing non-core functions allows companies to concentrate their efforts and resources on their core competencies. Businesses can streamline their operations and increase overall productivity by delegating peripheral tasks to outsourced service providers. Outsourcing non-core functions such as accounting, corporate secretary, or business support administration enables companies to refocus their internal teams on strategic business initiatives, innovation, and market expansion. It helps in paying more attention to core competencies, fosters growth and allows companies to maintain a competitive advantage.
What are the five types of Accounting Services commonly Outsourced?
1. Accounts Receivable /Accounts Payable Services
These accounting functions, commonly outsourced in Singapore, are highly sought-after. The main goal of accounts receivable (AR) services is to ensure that your customers make timely payments to you. In addition, these services encompass various tasks such as expense reporting, approval of payments, order management, handling vendor inquiries, financial reporting, debt management, forecasting, and customer billing management.
Outsourcing the management of accounts receivable and accounts payable (AP) offers several benefits. It frees up your time to focus on essential business operations. Furthermore, you can rely on skilled and experienced professionals who have extensive expertise in managing different accounting functions.
2. Payroll Services
Payroll services involve the maintenance of precise records regarding all payments recorded in the financial records. It is essential to accurately calculate the payroll, other forms of compensation and other CPF contributions. Outsourcing payroll services can guarantee accuracy and effective management of the payroll process.
3. Financial Reporting Services
Creating financial reports is crucial for companies and businesses of all kinds. Often, it is necessary to outsource accounting professionals to assess the financial status of your organization and generate comprehensive and trustworthy financial reports. Additionally, business owners can also gain access to impartial viewpoints and expert guidance for resolving any cash flow challenges within your company, thereby ensuring the seamless operation of your business.
4. Bookkeeping Services
Bookkeeping is an essential daily task that involves recording all financial transactions in the appropriate sections of a company’s accounting books. These activities may contain errors, notably if the staff lacks experience and expertise, which can then impact present and future accounting records. To ensure greater accuracy and timeliness, it is possible to outsource these bookkeeping tasks to professionals specializing in this field; this allows for more precise and prompt services to be provided.
5. Tax Filing & Reporting Services
Tax accounting focuses on ensuring the accurate payment of required taxes and proper management of income tax. Outsourcing these accounting services can improve service quality since most outsourced accounting firms have expertise in tax laws, tax payments, and other tax-related matters. To ensure a successful tax report preparation and filing while maintaining compliance with Singapore laws and IRAS, it is advisable to outsource these tasks to a reputable accounting service provider. Doing so can minimize financial and accounting errors that could negatively impact your business operations.
Suggested Read: Why Choosing The Best Accounting Service Provider Is Important?
Related Content: An Overview Of Accounting Services In Singapore
The increasing trend of Singapore companies outsourcing their accounting services is driven by various factors such as cost savings, access to specialized expertise, scalability, and flexibility. By outsourcing their accounting services in Singapore, businesses can streamline their financial operations, reduce costs, improve efficiency, and comply with regulatory requirements. Not only that, but it also empowers organizations to focus on their core competencies, make informed decisions, and achieve sustainable growth in today’s dynamic business landscape.
At APacTrust, we are committed to helping local businesses thrive and reach their maximum potential. Do feel free to take a look at our accounting services as well as other corporate services. Contact us today for a free consultation.