General ledger accounting is a crucial function for any business, but that function is best performed by outside experts in the field.
The importance of accounting needs no introduction, but the errors that go with performing accounting internally do:
And the general ledger cannot be ignored, as it provides critical data to be used in a pipeline of projections and models for making big decisions at the top level of your business.
This data needs to be compiled, accurate, and complete. Outsourcing the general ledger can provide a cost-effective solution for scalable expertise that ensures your accounting is in order as you grow.
A general ledger is a complete record of all financial transactions for a company.
It contains debits and credits categorized into different accounts like accounts payable, accounts receivable, expenses, or sales revenue.
Clear and consistent general ledger accounting practices are imperative to maintain regulatory compliance and foster trust in client relationships.
However, that’s a task that can be challenging to accomplish as skilled accounting staff becomes more difficult to find–and keep.
One survey by Deloitte found that 82% of public companies and 69% of private companies are having trouble retaining skilled accounting and finance talent.
With skilled staff in short supply, firms can explore alternatives to W2 hires to fill back-office accounting roles. That’s one reason that outsourcing is gaining a lot of traction.
And with the benefits, it is no wonder that 80% of businesses that outsource accounting are likely to refer their accountants.
From cost savings to expertise as you'll see below, the benefits of outsourcing general ledger accounting are plentiful.
Cutting costs remains the primary driver behind outsourcing. In a study released by Celent, those savings can add up to between 20-30% of total costs over a three-year period.
When you consider the total costs associated with recruiting, hiring, and retaining staff, it makes sense that a firm specializing in general ledger accounting can provide an experienced team for a lower cost than a typical business that must focus on generating revenue, rather than be bogged down by admin work.
Indeed a majority of public and private companies have trouble finding accounting and finance talent, as there is a shrinking supply of qualified US-based accounting talent.
And in the US, the median cost per hire for accounting staff is $1,633, and it takes anywhere between 36 and 42 days to fill one role.
For many smaller firms, positions for vital support services sit empty for far longer.
Which is better? Leaving the position open or hiring a less experienced employee? Truthfully, neither. Outsourcing accounting tasks can provide the coverage that your firm needs so that you don’t have to choose between two poor options.
With Empaxis, for example, you'll be able to access general ledger accounting talent way faster than 36-42 days, and you'll work with true experts in the space.
Schedule a consultation to meet with our accounting experts.
The path to sustainable growth is hardly ever a straight line.
You start growing but ultimately reach a capacity wall where you don’t have the people, systems, or process efficiencies to keep up with the increased workloads that result from growth of your business.
General ledger accounting is one of those areas that face greater workloads as business activity increases.
When you get slammed, you're scrambling to get things done on time, but when in you're such a rush, the tendency for errors will go up.
But when you partner with an outsourcing provider, the provider will have the people, technology, and efficient processes in place to handle the work as your business grows.
Outsourcing general accounting services indeed allows for greater scalability and flexibility in your business model, and it will help eliminate the speed bumps in your growth trajectory.
According to a survey on global risk management by Deloitte, 97% of financial firms have noticed an increase in regulatory compliance actions. And the number of enforcement cases filed by the SEC proves that it’s not just smoke and mirrors – risk management is getting more complex every day.
And as mentioned above, accounting mistakes can create serious problems for businesses. Miscalculations in cash flows and expenses can severely impact your firm, and it could land you in regulatory hot water.
Outsourcing general ledger accounting teams to a provider that follows best practices, employs the best people and technologies, and is well-versed in your compliance needs will ultimately protect your firm from unwanted harm.
Finally, the push for efficiency in all areas of business highlights another opportunity to leverage outsourcing.
The idea is simple, you let a team that specializes in accounting handle those tasks, which frees up more time for you to focus on your core services. You're in business to make money.
The result is a better use of your time that delivers better outcomes for your clients.
Most businesses have limited time and resources, and their efforts needs to be focused on revenue-generating and profitable activities.
Accounting plays a big role in tracking firm finances, but with time and resources limited, most businesses struggle performing their accounting functions properly, leading to errors and inefficiency.
The good thing is that these companies can outsource their general ledger accounting functions, and with the right outsourcing partner, your firm can benefit from access to skilled talent, cost-effective labor, and specialized expertise.
At Empaxis, we understand the unique challenges your firm faces, and we are here every step of the way to support your accounting needs.
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