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Common misconceptions regarding accountancy and accounting services

Find out which services may suggest the our company and how to carry out interaction with Acotax and customizing business processes while using accounting outsourcing.

Tangible experience of Acotax company practical work related to everyday accounting support of activity of client-enterprises, as well as serious methodic backing of our main company specialists in the area of practical outsourcing allow us to make much less mistakes. We succeed in anticipating many mistakes in advance. We would like to publish the list of most popular myths and deceptions in respect of enterprises’ accounting resources support that we had to face. The situation in the sphere of accounting services changes very quickly. We shall try to reflect on this page new “trends" which might appear with time…

1. Accountant should be sought only upon the recommendation

This is perhaps the most ancient and enduring prejudices. However, experience shows that more than 80% of our clients came to us, using the recommendations of friends. But we know of many cases where involvement of relatives, friends and just good people on the recommendation is not followed. Indeed, all people are primarily just people. And can we expect in the event of any difficulties person will behave as appropriately and responsibly because it encouraged this work?

In addition, please note that selecting accounting recommendations of friends and acquaintances not much help at all. Accounting outsourcing services Result very strongly influenced by personal perspective. Just like when you hire an employee. Then choose those with whom you have established mutual understanding. This is important. Recommendations, others can give you a preliminary information on the success and the professional competence of a potential partner. No more ...

2. It is quite easy to find an accountant

Accountant is one of a company's key staff. And your ability to find common grounds with it is very important. You could even say «well worth it»! Estimated i/o cost of recruiting a new employee to the average salary of three new staff members. This is assuming that it will pass the probation period. And what if he will not? Then there will be new search and new costs. Besides, judging from our experience, forming up of an effective accounting department takes rather a lot of effort and from half a year to two years of persistent strategic work on effectiveness of the accounting department work. Even if the accounting department consists of just one-two employees. Can you afford it? And most importantly, whether or not?

3. Staff accountant will work only for me

"If I recruit a staff accountant he will work only for me and look after the interests of the enterprise" is one of most widespread deceptions. It will possibly surprise you, but employees worry as much about effectiveness of their work as you worry about effectiveness of the company work. And, therefore, they do not much like down time and any other «nonsense», especially if it is not paid for. As a result, having looked into a drawer unit of your accountant you risk to find a couple of stamps of different enterprises that you’ve never heard of before…

4. Accountant should understand the specifics of business

They also say that an accountant «should keep his finger on the pulse». Honestly answer the question - who are you looking for? An executive, sales specialist, administrator, or, after all, an accountant… If you need a person, with whom you can consult in respect of all decisions taken – this is one thing, but if you need a good accountant – this is a completely different thing! The main function of an accounting department is working with documents and data. To submit them timely is your concern. An accountant cannot know what you think about…

Believe the word, the specifics of accounting at all one - the Tax Code and the basic guidelines. But the specifics of the application of different tax regimes and accounting operations of the enterprise is obliged to know. But if you can determine his level of competence in this? So choose an accountant or accounting firm with the most experience with companies in various industries.

5. Outsourced accounting is only for small business

The assertion that the accounting outsourcing is only suitable for those who can not afford full-time accountant - to put it mildly, does not correspond to reality. Accounting outsourcing can be used for virtually any company, regardless of its size. This is evidenced by the experience of many successful global companies, including Shell, Hewlett-Packard and many others. The problem is that the bigger company and more in her range of business processes, the more difficult the implementation of outsourcing at the enterprise with the administrative and managerial point of view. This places high demands specialized knowledge and skill level executives, as well as the literacy of other employees.

6. Outsourced accounting exempts the staff accountant

A head of an organization is legally responsible for organization of accountancy at his enterprise and accounting reports to authorities. But you have the right to organize them the way which is most convenient to you and maximally safe from the point of view of reliability. This is why nobody can forbid you to recruit an accounting employee having signed at this an agreement for rendering accounting services with an outside company. Even if this will be not just one company. For example, one of the companies renders outsourcing services for payroll job, the other one renders services of accounting outsourcing. We would like to remind once again that possible are any variants of redistribution of functions and organization of business processes. Just bear in mind that the more structural links you have the more complicated it can be to manage it all.

7. Accounting firm should be located as close as possible

Our multiyear practice shows that territorial proximity of a service company has no importance. In business everything changes rather quickly and often. Are you sure that in a couple of years your office and even home will be located at the same place where it is located now? Unlikely. And what will you do if location of your office will change? Will you be looking for another accounting company? It is hardly reasonable. And even more so – it will hardly influence your business favorably. Therefore, choose better the most qualified company rather than the one which is closer. Next is not always best. And proximity will not bring more convenience!

8. Outsourced accounting means a huge cost savings

While calculating expenses for enterprises’ accountancy and tax management support one should not look at the problem from one side. In most cases of using an outside outsourcing company or separate specialist expenses for accounting and accounting reports are not limited by the cost of services of engaged specialists. Add to these expenses working time of your employees that are directly or indirectly related to accounting processes and your own time for goal setting, drawing up of queries, witnessing of documents, etc. You will possibly be surprised, but expenses will be much higher. It will be more correct in this case to evaluate all expenses as a whole. As to in what combination of instruments and resources accounting and accounting reports should be ensured at your own enterprise– this you should decide for yourself.

9. Optional savings possible while transitioning to outsourcing

Some most venturous in issues of economy managers erroneously think that having changed to accounting outsourcing of law and auditing companies one can make additional savings. Plus economy on legal and auditing services. About substantial difference in work of auditing, accounting and law companies, and about how actually “profitable” it is, read «Accounting services and outsourcing. What is the difference?» on our site page.

Lawyers value their work not less than accountants. Therefore one should not count on receiving from them some individually worked out legal documents within the framework of accounting service agreement. In most cases you can count only to receive a typical document from a help system. Individual elaboration of a document will definitely entail additional payment.

Rendering of auditing services in parallel with current accounting service to the enterprise, in the second case, will not only be, mildly speaking, illegal, but will substantially decrease reliability of accounting resources support of your enterprise on the whole. This means that it will tangibly decrease effectiveness and economic safety of the enterprise. Furthermore auditing services will have to be paid for separately anyway.

10. When accountancy outsourced you may not think about it at all

The main difference between outsourcing and rendering services is in the fact that work on rendering services is most often performed without direct participation of the client in the process. Signing an outsourcing agreement you start joint work on processes. Without your direct participation work on performing functions or servicing the processes will be ineffective and will stimulate appearance of risks of financial losses.

One should not also forget about responsibility of the leader before the law! Beside the fact that not every responsibility can be transferred to outer executives in principle, the leader is an ordering customer and a functionary, who must control the process. Therefore you should at least sometimes ask the executor whether he has at his disposal all documents and data, whether he receives them timely, etc. This will help you not only to better understand the actual condition of accounting and accounting reports at the enterprise, but also to avoid different «unforeseen» surprises.

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