If you’re an SME, it’s highly likely that you’ve outsourced your accounting in order to expedite your own internal processes, as well as to free up manpower and resources. It’s becoming such a common practice – but a practice that still needs to be done well, especially if your accounting outsourcing is a new venture.
This plays an exceptionally crucial role at the end of the fiscal year: the period of time where all businesses must submit their income, accounting, and financial reports. This requirement is time-sensitive and can have serious legal repercussions if mishandled, and while internal accounting teams of larger enterprises can handle the normal requisites, an SME may not have the sufficient resources to do this as easily.
Which is why accounting outsourcing companies are often the ones in charge of compiling these fiscal reports. While it’s often understood that the report they’ll generate is accurate and reflective with your own figures and statements, it’s handy to give it a once-over before sending it to the Revenue Agency. Here’s a few items to tick off in that list.
- Profit and loss statements;
- Accurate count of invoices;
- Ensure that your inventory is accounted for in the report;
- The report is reflective of new income or expense avenues for that entire fiscal year;
- If you business deals with multiple currencies – proper exchange rates reflective in the numbers;
- And overall quality, cohesiveness, and accuracy of the report.
While the bulk of the work will be handled by the accounting outsourcing company, fiscal reports often require an extensive and comprehensive review of thousands of invoices, hundreds of statements, and anywhere from tens to dozens of reports. Even after the report has been compiled and submitted, there are still more preparations to be done at the end of the fiscal year.
One area is evaluating key functions in your business. While your outsourced accounting firms have a standard package including balance sheets and the like, this can often be missing key reports and cost more of your internal resources than you’d like. Not all accounting consultancy services automatically make a strategy or go about upkeep with this in mind, so responsibility ultimately falls to the the SME itself.
Most accounting firms in Mississauga go with an approach that looks forward to the future of your business, employing methodologies such as business forecasting and departmental resource development to end of year fiscal reports, allowing you to visualize a much more coherent viewpoint of what the incoming year will look like.
This relationship becomes critical if your SME is growing out of its beginnings or adopting new technology – such transitions can not only be tricky without the oversight of an expert in said process, but can be costly and time-consuming if tackled with your own limited internal teams. At the end of the fiscal year, it’s important to clarify with your accounting outsourcing firm that this is a necessity for a growing business; indeed, such a forward outlook is ideal for all setups.
Accounting outsourcing firms aren’t that hard to understand – and they’re your best friends when it comes to balancing those books. Learn more how to properly leverage this relationship and avoid the most common downfalls when you download our whitepaper on Ineffective Finance and Accounting Teams today.