Posted on August 31, 2021
Written By Rukmani Krishna
Manufacturing companies regularly deal with unique challenges, such as increasing labour costs, rising competition, quality control, lack of resources, and regulatory compliance among others. The prime focus of such companies is production, which could lead to key accounting tasks like billing, payroll, and reporting taking a backseat.
Unfortunately, overlooking the accounting side of manufacturing can be costly in the long run. Lack of resources and adequate attention to accounting tasks can result in penalties, missed opportunities, and inaccuracies in records. So, it’s a good idea to find a specialist sourcing partner for your accounting function. Let’s take a look at 8 benefits of outsourcing manufacturing accounting to a specialist.
1) Higher efficiency with lower costs: Taking care of finance & accounting in-house can present significant challenges in terms of recruiting, training and retaining qualified staff. A specialist partner employs qualified and experienced professionals who can better manage your accounting activities. The sole focus of a specialist is to stay up-to-date on the latest financial news, increase accuracy, and standardise the entire process. In the long run, outsourcing can also offer significant cost savings.
2) Gain access to the latest technology: Specialist providers leverage cutting edge technology and are up-to-date with the latest tools. This enables quicker turnaround times, precision, and enhanced security. Additionally, specialists can help create accurate financial models and provide forecasting reports using advanced technology.
3) Gain access to expertise and a portfolio of services: An outsourcing specialist can provide a variety of accounting solutions, such as monthly accounting and bookkeeping; bill pay services; tax preparation and planning strategies; budgeting; and payroll processing among others. An experienced specialist offers financial expertise and up-to-date knowledge of everchanging legislations and compliance requirements. They can also help with monthly reconciliation and financial close to financial statement preparation, costing techniques, payroll for manufacturing firms, and tax planning among other tasks.
4) Simplify the entire process: When you hire a specialist, they will take care of the entire accounting process. Outsourcing specialists already have standardised processes and procedures in place. Additionally, experienced and qualified accountants constantly monitor and supervise the entire process, thereby improving the efficiency and accuracy of your accounting function.
5) Automate workflows: You are, no doubt, aware of how beneficial automation can be for finance and accounting functions. Automated workflows offer enhanced accuracy, workflow optimisation, and immediate identification & rectification of errors. Accounting specialists usually offer automation support and solutions to ensure the success of your digitisation and automation initiatives.
6) Easily scale your business: A manufacturing business already has to deal with several mission critical components such as hiring new workers, buying more raw materials, and increasing production. An accounting specialist can take control of your accounting process, thereby allowing you to focus on strategic activities and investing in better infrastructure without increasing operational costs. A specialist can also accommodate your growing needs as you scale your business.
7) Improve tax compliance: It can be challenging for manufacturing businesses to be up-to-date with everchanging local, state, and federal tax compliance. Any errors in tax reporting can invite hefty penalties and punishments. An accounting specialist can help your business improve tax compliance through multiple solutions, such as year-end services, financial statements, AR and AP management, and tax services.
8) Improve business continuity: The COVID-19 pandemic, in particular, has further increased the need for businesses to have a strong business continuity plan in place. It’s important to be ready for any unfavourable changes that may happen in the short term as well as the future. Liquidity is essential for a manufacturing business, and doubly so in situations like a pandemic. By outsourcing accounting functions such as accounts payable and accounts receivable, your business can be better placed to maintain sufficient cash flow.
Irrespective of its size, it’s important for your manufacturing business to choose the right sourcing partner. You can reap significant benefits from outsourcing your accounting function to a qualified specialist. Furthermore, a qualified and experienced specialist can offer customised services as per your needs and can scale their offerings as you grow your business.
Are you considering outsourcing your manufacturing accounting function? QX can support your F&A automation and transformation initiatives. Get in touch with our experts for personalised advice on how to transform your manufacturing accounting function.
Originally published Aug 31, 2021 01:08:21, updated Dec 08 2021