Author Archives: Aristotle Consultancy
For business to grow and mature, it is necessary to opt for the services of an accounts outsourcing firm or a “Virtual CFO “, ( VCFO ) to simplify fatuous processes. One of the most common questions raised regarding this is the dissimilarities and similarities between accounts outsourcing and VCFO services.
They both provide similar services in terms of finance. However, a VCFO service usually goes an extra mile knowing your business, taking care of end to end financial matters and providing financial analyses along with strategic business inputs. Albeit, Accounts Outsourcing and VCFO Services, both are considered efficient ways to save money and time of the organization, these services differ from each other in the following ways:
Accounts outsourcing firms provide services like handling bookkeeping, accounting and other simple functions that tend to focus only on current results. Whereas, a VCFO provides with better strategies for the same processes i.e. pursuing long term benefits. In other words, a Virtual CFO is an all-rounder who provides you with knowledge that is outside the domain of accounts outsourcing firm.
A VCFO will therefore guide you through financial planning, developing of strategies, analyzing developed strategies, obtaining resources,maintaining resources and advocating government on your behalf which will in turn be helpful for you in long term planning for your company in addition to the services offered by an accounts outsourcing firm.
Accounting outsourcing firms tell you where your finances are lacking by providing you with daily, monthly or quarterly reports. Whereas, VCFO analyses such reports and makes long term action plans through financial planning, fundraising and by providing with tips& tricks to know how and where to invest to get maximum returns.
Business has various dimensions and it is not possible to handle all of them efficiently at all times. A VCFO, therefore, makes a business aware of all the possible threats and opportunities coming its way through his experience and vast knowledge of businessby working on a budget planning , budgeting, costing analysis, policy making etc. for the business which give an overview of all the possible problems coming its way. Whereas, an accounts outsourcing firm provides help only with audit, data analysis and implementing basic policies.
Every company needs accounts outsourcing to perform traditional services which are of great importance in day to day routine but apart from that it requires ideas and suggestions to provide value beyond compliance benefits. A VCFO, therefore, not only helps in tax planning but also guides on key tax practices and streamlining it to their benefit.
Therefore, outsourcing accounting services give guidance on all technical matters relating to finance and a Virtual CFO gives a deep analysis on finance, tips on latest trends and technological advancements.
Accounting outsourcing means entering into a contract by an organization with third party consultant to outsource part or all of its accounting functions.
Finance and accounting outsourcing activities are getting very much popular in many organizations, as outsourcing accounting and bookkeeping services helps an organization to focus more on core functions of business and to work more closely with the business core area and improve decision making.
When a company does finance and accounting outsourcing, it expects several benefits out of it.
Few benefits of outsourcing finance and accounting services are mentioned below:
1. Cost Saving:
By outsourcing accounting and bookkeeping services, you can get access to skilled professionals like CAs, CS’s, tax consultants and accounts executives at much lower cost without compromising on quality. Companies tend to save cost of salary, new software applications, infrastructure, employment taxes and other overhead costs. We can perform accounting services far more cheaply and efficiently than companies working with in-house team.
2. All Professionals Under One Roof:
Aristotle has skilled and trained professionals who can handle end to end accounting and finance deliverables efficiently. The company can gain from the expertise of these professionals who have great knowledge and experience in this field.
3. Up-to-Date Knowledge and Robust Processes:
The market keeps changing continuously due to frequent amendments in applicable laws and procedures. Many companies do not have knowledge about or access to these latest amendments. Updated knowledge of our team and time-tested processes enable us to provide quality accounting and bookkeeping services that are accurate. We can bring considerable increase in company’s level of productivity and efficiency.
As the business undergoes change; it may need to throttle the accounting and book keeping activities. It gets possible to easily manage (increase or decrease) these services by simply telling us about the changes required.
5. Training and Attrition:
Organizations are not required to spend their time and energy in training, mentoring and retention of their accounts team as it is the responsibility of accounting outsourcing partner. With this saved time, top management can concentrate on core business areas.
6. Focus on Core and Less Time Involvement of Management in Routine Accounting Tasks:
With finance and accounting outsourcing, company can spend more time and focus more on core functions of the business which are beneficial for the growth of your company. And, by accounting outsourcing, every employeegets a chance to work efficiently on his field of work where he feels he can contribute more.
7. Faster Turnaround Time:
With the help of accounting outsourcing services, there is faster and timely processing of services as experts having full knowledge of accounting and finance handles the processes. Therefore, time saved by outsourcing accounting and bookkeeping services can be utilized for other important functions.
A company secretary is needed within all types of companies- whether Public Limited Company or Private Limited Company . The role of a company secretary is to carry all administrative functions of a company which includes ensuring board procedures being followed, maintaining all kinds of documents and constantly checking & improving corporate governance policies and enhancing code of business ethics.
A company secretary, therefore, is not considered a cost to the company but has an important role in the working of an organization as a whole. These are:
A company secretary is responsible to be updated with all the company compliances. He is required toensure that the administration of a company is in compliance with statutory and regulatory requirements and that the decisions of the board of directors are being implemented correctly.
A company secretary is an expert in corporate laws and thus provides valuable advice to the directors on its key aspects. It helps the organization to take informed decisions.
It is necessary for a company to keep a track of all the important company recordstoday to keep working efficiently in future as well.A company secretary, as mentioned before is responsible for maintaining all kinds of documents, whether manual or electronic, which includes company’s statutory registers, minute books and other statutory records.
Benefits to Stakeholder
Every stakeholder has a right to know that the company is being run in compliance to the applicable laws. A company secretary, therefore, is generally the only point of contact for company’s stakeholders. He ensures rights of the stakeholders are protected and also keeps them well informed about the company’s happenings and meetings as well.
Learn more about finance and accounting outsourcing services at Aristotle Consultancy
Company secretarial services contribute to be one of the most important services an organization needs. It includes ensuring that the organization is in compliance with the administrative requirements. A company secretary ensures that the board procedures are in place and constantly checks& makes improvements to corporate governance policies.
Outsourcing Company Secretarial services were not considered as an equally feasible activity as other functions of business, because organizations always had a fear of sharing their business information with outsiders and believed that it can be managed with the in-house team.
However, majority of companies these days prefer outsourcing company secretarial services because of the following reasons or benefits it offers:
1.Accurate and Consistent Handling
There is timely and consistent handling of administrative requirements of an organization when these services are outsourced. It enables an organization to have a team of experts who keep a track of records and save the organization from being charged for non-compliance, late document submission or inaccurate reports.
2.Knowledge and Experience
The outsourced team has in-depth knowledge and experience in handling company’s administrative requirements. All the processes are, therefore, done more easily and efficiently with expert knowledge.
Outsourcing company secretarial services save you the cost of hiring and training of in-house team without any compromise on quality. The cost spent on infrastructure, employment taxes and other overhead costs are saved by outsourcing services to third-party. Therefore, money saved can be used to expand the business.
Having well-trained and experienced team lets you have an expert advice and feedback on how you can improve your business operations. You can rely on them to meet all your requirements without any worry as they will always have solution to your problems.
5.Cut Down Risk Factor
Outsourcing agencies have a team of experts to execute work within stipulated timeframe and help to reduce the penalties and other monetary loss and enhances the goodwill of an organization.
Learn more about finance and accounting outsourcing services at Aristotle Consultancy
Having a good relation of trust and transparency with the accounting firm is very important for an enterprise as they are responsible for assisting in vital financial decision making needs. When that level of understanding or comfort goes away, an enterprise might start considering switchingtheir accounting firm.
However, switching accounting services in the beginning of the year is considered to be beneficial as it avoids the level of complexity in the processes, a business would face if changed in miear.
Reasons for Switching To a New Accounting Firm
1. Insufficient Understanding of your Business Basics-
A good understanding of business model of a company is very essential even for an accounting firm to implement accounting processes customized as per business requirement within legal framework. When an accounting firm is not able to grasp the business model or fails to understand your business needs, it results in inefficiency of financial performance.
Inability to contact with your accounting firm when needed can lead to a lot of frustration and delay in decision making process.
When the business feels that they are paying more than the services promised to be offered by the accounting firmor when they feel that they can get same services at much lower cost.
4. Change in Technology –
Industry undergoing changes in terms of technology require latest up-to-date software for their business. Therefore, when the software used by one accounting firm becomes obsolete or outdated, you might want to switch your services with them.
Pros and Cons of Switching Accounting Firms
•Save Money –
There are firms which might be providing same services with equal efficiency at much lower cost than your current accounting firm. Therefore, switching to that firm might result in optimum utilization of moneyfor your business.
•New Ways of Performing –
When switching to a new accounting outsourcing firm, business evaluates and looks for the one who has more knowledge and expertise than the previous ones or uses new methods of technology. Introduction of new accounting firms, therefore, can bring in new way of thinking and new ideas to the organization making it work in a more efficient manner.
•Clear Picture of Work –
One of the major reasons (non-availability), for switching goes away when the new firm understands the required scope of work and ways to be available for the needs of the business at all times.
•Full Knowledge of Business –
The current accountant knows everything of your business. All the needs and objectives of the business are already known to the accounting firm. Switching might lead to explaining everything from scratch which can be time consuming.
Although switching might result in less upfront cost in the long run, you might face some extra indirect costs initially such as training of new firm and making them understand the business.
•Disturbance in Organization Structure –
Sometimes, handover period creates disturbance in the current working situation because no new projects can be undertaken in that period. It takes time for a new firm to understand the business and its objectives. Also, ongoing projects also get delayed in the process of switching.
There is always a certain level of risk attached to working with any new association which depends entirely on its way of working with the business. It’s arduous to evaluate its actual capability in a couple of months.