Here’s some serious food for thought: According to a Statista survey conducted in 2023, as many as 57% of startups in Australia identified accounting as the top task being outsourced. This trend isn’t limited to new businesses — it’s reflective of a wider shift happening across the country towards outsourced accounting services in Australia. In fact, some of the leading companies in Australia such as the largest airline, a leading telecommunications firm and even one of Australia’s largest banks outsource financial processes like payroll and some accounting functions to specialized firms.
This article dives into why more Australian companies are handing over their accounting reins to experts such as Embee NextGen. It will explore the key drivers—from economic pressures to strategic resource management—reshaping how businesses handle their finances today.
Key Drivers For Businesses In Australia Shifting Towards Outsourced Accounting Services
Australian businesses are increasingly seen leveraging the benefits of outsourced accounting. Research firm IBISWorld was recently quoted by an Australian accounting firm as valuing the Australian outsourced accounting services at around AUD 2.5 billion in 2023, growing at 5.6% annually over the past five years. What’s driving this growth? It’s a combination of factors: need for cost-efficient solutions, access to specialized expertise, and the use of advanced accounting technologies that are global benchmarks, apart from business scalability, team flexibility and peace of mind achieved for the resources. Let’s do a quick run-through.
- Need To Achieve Cost Efficiency
A big reason for this paradigm shift is rising economic pressure and the need for cost-efficiency. With the cost of hiring, training and retaining in-house staff and operational expenses climbing, outsourcing offers a smart way to maintain quality without draining budget. Deloitte found that businesses saved up to 30% on operational costs by outsourcing accounting.
- Scalability and Flexibility
Outsourcing accounting enables businesses to scale their financial operations seamlessly as they grow. By leveraging external expertise, Australian companies can easily adjust their accounting support to meet increasing demands without the overhead of hiring and training an in-house team, ensuring they remain agile and cost-efficient at every stage of growth. Outsourcing accounting in Australia also lets companies scale services up or down easily, without the hassle or cost of permanent staffing changes.
- Access Internationally-Benchmarked Expertise and Technology
Outsourcing accounting allows Australian companies to tap into top-tier expertise without the constraints of hiring internally. By partnering with specialized firms like Embee NextGen, businesses gain access to a team of seasoned professionals who are well-versed in local regulations, tax laws, and industry best practices. Additionally, outsourced accounting providers invest in the latest accounting technologies, offering cutting-edge tools for automation, real-time reporting, and data analysis. This not only improves efficiency but also provides businesses with deeper insights into their financial health, empowering them to make informed decisions quickly.
- Focus On Other Business Functions
When businesses outsource accounting, there is precious bandwidth generated. By handing off day-to-day work like bookkeeping and payroll, companies can redirect their resources to areas that need attention. Hiring outsourced accounting services in Australia frees up the internal teams. Also, management will have more time for strategic planning and provide better business service. And the best part? The time and money saved can be used to chase new growth opportunities and sharpen the competitive edge.
- Improvement In Risk Management
Business accounting solutions in Australia really know their way around local and international standards. They keep you compliant with the latest regulations. Letting the experts handle your financial reporting also helps you dodge costly mistakes. In fact, according to a PwC study, a 74% of Australian companies state that outsourcing has helped them stick to regulations and reduce risks.
While the benefits of outsourced accounting are pronounced, one may want to be wary of jumping on the bandwagon. Below is a quick checklist that will help you onboard the right partner for you to outsource accounting in Australia.
Questions To Ask Outsourced Accounting Services Firms In Australia When Onboarding Them
If you’ve made the decision to onboard an outsourced accounting firm, here are a few key questions to help you narrow down your list and make an informed choice of the right partner for you.
- How Experienced Are You And What Is Your Expertise?
When hiring an outsourced accounting service in Australia precision is key. Therefore, ensure that the firm you choose has the right expertise, knowledge, and experience required to effectively manage your finances. Make sure that they have the right qualifications. They should possess CPA or CA certifications, which demonstrate expertise.
Industry-specific experience is also important. It showcases that the firm understands the regulations and challenges of your sector, which ensures smoother operations. Finally, proficiency in accounting software and technology platforms is essential for efficient and accurate financial management. These factors combined will ensure you’re partnering with a capable and experienced firm.
- How Does The Firm Communicate?
When assessing an outsourced accounting firm’s communication, start with their responsiveness. Are they quick and thorough in their replies? Make sure they use your preferred channels, like email or video calls. Check if you have a dedicated point of contact and if they’re transparent about your finances. Finally, see if they keep you updated on important deadlines, like tax filings. These signs will show if their communication is clear and reliable.
- Do They Use Tech?
In accounting, tech is key to keeping things confidential, secure, and private. Look for a firm that uses advanced accounting software and secure data storage. They should also have automation tools with strict security protocols and strong confidentiality policies. Most importantly, check that they follow Australian Taxation Office (ATO) rules to protect your data. A firm with the right tech and secure systems will give you peace of mind.
- Will The Firm Represent You During A Tax Audit?
Many outsourced accounting firms in Australia can represent you during a tax audit, provided they have licensed tax agents or certified accountants (CPA or CA) on their team. It’s important to confirm if the firm has experience handling audits and navigating the complexities of Australian Taxation Office (ATO) requirements. Ensure they offer audit support as part of their service package or have the expertise to manage the process if required.
- Do They Follow Latest Encryption And Security Protocols?
It’s crucial to verify if the outsourced accounting firm stays updated with industry changes, tax laws, and accounting standards relevant to your business. Ask if they use real-time accounting software and regularly train their staff on the latest regulations. Additionally, ensure they follow the latest encryption and security protocols, like multi-factor authentication and data encryption, to protect sensitive financial data from breaches, complying with Australian data protection laws.
Conclusion
Outsourcing accounting services in Australia offers numerous benefits, including cost savings, improved risk management, and scalability. By choosing the right firm to engage with, businesses can ensure expert financial management, stay compliant with Australian tax laws, and focus on core business functions. Asking the right questions, like their expertise, tech usage, communication, and audit support, to help you make an informed decision and partner with a firm that meets your business needs.