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Written by Steven Brough on March 22nd, 2009

Reducing the cost of Accounting and Bookkeeping Services

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Since the dawn of outsource services and freelancing sites, most firms and companies now would rather use the internet to utilize the services of third party vendors. These people would carry out most of the routine work that would otherwise be done by the administrative department such as accounting and bookkeeping. The purpose of accounting is to provide the information needed for sound economic decision making.

Bookkeeping refers to the process of keeping a record of financial transactions that take place in the normal course of business. The concept of accounting refers to the recording and analysis of transactions, and the preparation of statements that will be used by investors, creditors and others to assess the financial health and viability of the company.

Some of the common activities under the Accounting/Bookkeeping department that are presently delegated to third party resources include:

  • Reconciliation of accounts
  • Maintenance of general ledgers
  • Maintenance of accounts payable and accounts receivable ledgers
  • Inventory maintenance and reconciliation
  • Attendance maintenance
  • Preparation of salary statements
  • Maintenance of payroll journals and reconciliation of payroll calculations
  • Cash flow management
  • Reconciliation of bank accounts and credit card statements
  • Forecasting and budgeting
  • Ratio analysis
  • Preparation of financial projections
  • Entering of sales and purchase orders
  • Preparation of customer invoices
  • Preparation of trial balance
  • Preparation of financial statements
  • Closing of accounts for year-end purposes
  • Preparation of management reports on a periodic basis

According to research, companies that hire the services of third-party vendors and freelancers reduce their overhead costs by almost 80%. The company has to ensure, before they hire a freelancer, that the third party vendor is good enough in this field; he should be capable of managing his work and finishing it on time. The vendor, on his part, needs to ensure that they meet the prerequisites and requirements of the company. He should also ensure that the secrecy and confidentiality of all the data being received and processed is maintained. Outsourcing these routine works to providers of outsource services and freelancers would definitely be a good thing to utilize in order to minimize the costs of operation.

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