The importance of outsourcing the accounting function for a company

The importance of outsourcing the accounting function for a company

I am often asked the question, why outsource the function Accounting? When and how to do it?  That Must do it? Why pay to outsource this function? 

Starting from these multitudes of questions, it is important to answer all these inquiries with a small article describing the ins and outs of the outsourcing of the accounting function.

1.Accounting Outsourcing: Principles and News

Outsourcing, also known as outsourcing, refers to the transfer of all or part of a business function to an external partner. 

When we look at our surroundings, it is a practice not yet very common under our skies. However, with the noted craze of recent years around the creation and development of companies (Creation, post creation, priming, growth phase Etc.), it is hoped that Senegalese and/or African entrepreneurs will appesantiront on their strengths and weaknesses (with humility) to outsource all the functions, they are not endowed or equipped to perform internally.

It is very often the subcontracting of non-essential and non-strategic activities of a company (An Engineer S. I must care about being level in this area so scalable and not worry about having the head to manage the function marketing, finance or RH etc…)

 This is a Tool for Strategic management Which is reflected in the company’s focus on its core business and key competencies. Outsourcing is a Process Flexible (Simplicity Must be the master word) adapted to the client’s choices and constraints; No case is the same (it is important to report it and to adapt it on a case by case basis).

The claimant, delegate brings his experience and suggestions, but This is The Client Indefinite the Best Balance That it intends to achieve between economic objectives and constraints.

 The outsourcing process now involves almost all the company’s supporting functions, Including the It maintenance the SAV, the logistics, the accounting or the financial function etc…

The function Accounting (including administrative) is a big thorn in the foot for the primo entrepreneurs or entrepreneurs seasoned with flourishing business but not untied of all financial and accounting abilities brings to be able to bear these said functions. Outsourcing can be a godsend to get rid of a function ô how much Boring For a non-insider.

The reasons for outsourcing in a company can be multiple:

  •  Benefit de Skills Extended: In relation to the internal structure, the service provider can put the best specialists in the face of sometimes complex problems, especially when dealing with issues of a tax, social and legal nature (right ohada very complex)
  • A better Flexibility In case of an increase or decrease in the number of employees, the activity of the company; The provider can adapt more easily to any change in the company’s market
  • A Better flexibility in terms of availability of resources (no worries of absence of internal staff for holidays, sickness or other)
  • Finally, and especially with the increase in the power of global competitiveness, a   Better control of the costs related to the functionTo Infrastructure to the outsourced process.  These costs Contractual, thus known in advance, are, moreover, lower than the internal costs thanks to their mutualization.
  • ensure finally Greater availability to Focus on the Heart Business (on value-added activities).

2.Objectives/ Benefits of Accounting Outsourcing

Change the internal accounting function

  • Quality of periodic reporting;
  • Tax and social Obligations: especially optimization practices;
  • External Relations: Suppliers, customers, banks;
  • Reflection on the evolution of the system of information;
  • Ability to play economies of scale
  • Cost differential Wage;

Flexibility of Staff and Of Costs

  • The costs are growing Based on of volumes and not in steps.
  • The Staff Internals are optimized, without underemployment linked to early growth and seasonal fluctuations (economies of scale especially for the African start-ups where at startup there are few means for human resources);
  • Ability to respond to outstanding requests from the branch or the stewardship;
  • The option for a hosted solution allows To avoid The Costs Related à The purchase, To Maintenance and updating of accounting systems (software and servers).

Access Permanent à The Expert Accounting

Accounting and tax Assistance and the Advisory panel highlighted (often Under estimate Since they have an abstract and intangible character in the eyes of the Primo entrepreneurs, which makes it more difficult for our professionals to get paid for this typology of services.

Concentration of the company on its core business

Acceleration and securing of closing deadlines

  • Contractual Obligation of result of the delegate in its processing times (e.g. J + 2 for a given declaration).
  • Ability de Striking out in case of internal failures (sickness, leave, departures).

Continuity of Service Accounting Security of Data

  • Back-Up Provider (Total knowledge of the system and the accounting processes of the client company).
  • Back-up of the data in the “mirrored” system (if Option to Software and base hosting at the provider).
  • Protection Against breakdowns and intrusions.

We will in a next article talk about the following important points in the outsourcing of the function 

  • The standard approach of implementing outsourcing
  • The operating scheme/outsourced accounting
  • The infrastructure options proposed and adapted to our local context
  • Devices guaranteeing the safety and quality of accounting and financial information 

Setting up process

 The implementation of an outsourcing process requires a strong   Involvement of Management and a process of Partnership Narrow With the provider at all stages of implementation.

The approach Accounting delegation results in the designation of a Project Manager Under the joint supervision of the Financial Accounting department of the company and the partner of the provider firm.

  1. Analysis of the existing:

Objective :

  • Establish the Mapping of the accounting organization in force
  •  Imputation Mode Accounting documents
  • Formalization of Circuits Current de Document Flow (Workflow)
  • Understanding of Methods of accounting treatment in force: Accounting system and business-specific management, Analytical Accounting and budgeting)
  • Taken into Accounts of Business constraints (periodic closures, reporting deadlines, tax declarations, Etc.)
  • Analysis of Volumes by Circuit Accounting

– Purchase/Supplier


– Cash/settlement.

  1. Strategic choices delegation of tasks and work retained internally
  • The analysis of the existing accounting organization in Phase 1 allows to define the stakes for Optimize quality, The Frequency and The Relevance of Financial information.
  • At the end of this analysis, a Joint Client/Accountant reflection Must be initiated to precisely define the nature of the operations Externalizable and those that must remain in-house.
  • A Notebook of charges Materializes the conclusions at the end of this decisive phase.
  1. Opportunity Study & Return on investment analysis

Based on the specifications defined at the end of the second phase, a Business Plan Estimate for the Return on investment   is prepared by the accountant:

  • Calculating the Full cost of current structure and treatments
  • Evaluation of the new Estimated internal cost (Current cost minus savings related to updating) and external cost.
  • Estimation of the Reduction of Loads Year 1 and the outlook for evolution over the next years as a function of growth.
  1. Decision to outsource

The decision to outsource Gives Rise At the signing of a Letter de Mission Commitments and obligations of the claimant and the client.

  1. Setting In place of the processing/training architecture

The setting in place of the processing architecture is articulated in four successive phases:

  • Settings   Systems and interfaces (software, spills    Automatic    Etc.);
  • Writing of Manuals de Procedures
  • Training Of Staff
  • Implementation Progressive work based on Files Tests.
  1. Starting

Operating scheme/outsourced accounting

  • Operation of Accounts
  • Account Processing 
  • Accounting seizures
  • Data integration
  • Data preparation

Proposed infrastructure Options

Depending on the answers to the previous questions, there are several types of accounting function organizational options with varying degrees of delegation to the external provider

Several treatment options are Offered:

Option 1: Total Outsourcing (delegation of all accounting treatments from the transmission of scan images with OCR transmitted by the company)

Option 2: Partial delegation of bookkeeping: The company retains one or more employees who charge and seize the scanned accounting documents upon arrival, the work of counting, bank reconciliations and fencing are taken into Charge by the provider

Option 3:  Total delegation of bookkeeping, with preservation of processing and data in the enterprise; The images of parts scanned and transmitted to the provider are operated by the back office on the company’s server for all the accounting treatments.

Alternatively, different accommodation choices are possible (see following diagrams):

  • 1st Choice of accommodation: Server hosted by the Accountant
  • 2nd choice of accommodation: Processing from the client server (VPN access)

Devices Guaranteeing safety and The Quality Accounting information

  • Confidentiality clauses in employment contracts
  • Protection Against Copy Systems
  • Disabling all CD and USB ports
  • Site secured by a specialized provider
  • Secure and tiered access
  • Internet Link or special link
  • Zero paper Technology (dual-screen input system and no printer and photocopiers on site)
Tax optimization: Tips for paying less corporate tax before April 30th The rules applicable to the probationary contract/Law No. 2015-04 of 12 February 2015