Accounting Terms Explanation: Accounting Outsourcing

Meaning

The premise of accounting outsourcing is that the enterprise cuts the whole financial process into many segments, and only one paragraph (one business process) is used.

At the same time, outsourcing of certain processes in finance can save managers some time, and use these time to increase company income; accounting outsourcing makes the company more efficient, so it can make more money.

Usually, the financial function includes the following parts: accounts payable, accounts receivable, general ledger and fixed assets accounting. These steps can not only provide valuable decision reference for the company, but are inefficient and increase the company's operating costs.

Generally, the business of accounting outsourcing includes: tax outsourcing, financial reporting outsourcing, employee payroll outsourcing, employee benefits outsourcing, daily life outlay, travel outsourcing, fixed asset management outsourcing, etc.

Market situation

In the west, where the market economy is highly developed and the division of labor is very detailed, accounting outsourcing is very popular. Many companies, from the date of its establishment, entrusted financial management to specialized financial companies, which not only standardized the company's financial management, but also avoided many risks.

At the same time, enterprises from professional accountants get the financial and tax information they need, and the government departments are very encouraging the development of the industry, and set up relevant supervision departments.

In China, although the accounting agency industry was only a few years old, it was quickly recognized by the market. Especially after China's entry into WTO, the market economy has developed rapidly. Specialized financial companies have gained more and more Chinese and foreign customers' favor because of their high quality, flexibility and efficient service.

At present, India is the preferred accounting outsourced market in developed countries such as the United States, which will bring huge employment opportunities to India.

Meanwhile

Senior practitioners in the industry believe that Chinese accountants want to participate in the international outsourcing business, and need to improve their English proficiency and international business capabilities, and familiarity with the US and international accounting standards and processes. This is also a major challenge for the accounting profession in China.

Trend and forecast

At present, the current situation of financial disclosure of most enterprises in China has been strongly dissatisfied with overseas investors and regulators, and has seriously hindered their overseas financing process. The lack of financial forecast and early warning caused by financial opaque is a fatal injury for Chinese enterprises.

Of course, CEO and CFO of some Chinese enterprises have realized the advantages of Accounting Outsourcing -- reducing costs, scientific management and financial pparency -- accounting outsourcing is becoming a walking stick for them to choose direction.

Other companies benefited from the rapid development of China's macro-economy in recent years. In 2003, they began to enter the fast lane of expansion. A large number of enterprises were in financial crisis due to the lack of financial management capabilities. For these growing companies, they began to understand that they must focus more and more on core businesses.

For them, accounting outsourcing means that they can reduce costs, get rid of the current situation of financial management out of control, get rid of the limitations of internal resources, provide support for strategic decision making, and improve financial pparency to attract strategic investors.

Accounting outsourcing is an inevitable trend after IT outsourcing.