Are the only copies of your financial records stored in a file cabinet in your back office?
Do your employees share confidential salary information with each other?
When your primary payroll clerk is out, does anyone have backup responsibilities, or are you (and your employees) stuck? Cross training throughout the accounting department is a great idea – but then, how many people have access to your payroll records?
If these are some of the questions you’d prefer not to think about, it may be time to consider outsourcing payroll and accounting duties.
Outsourced Payroll and Bookkeeping Advantages: Confidentiality, Consistency, Security
Ask business owners what they worry about when it comes to payroll and accounting, and chances are “security” will be one of the top answers. Security worries can run the gamut from personnel issues to storage of physical records. Here are 4 key areas security weaknesses can manifest themselves and how they can be addressed through outsourced accounting services.
Segregation of Duties. If a single person is able to post, approve and pay bills, it leaves your organization open to tremendous risk. While it’s likely your employee’s intentions are all good, recognize that even a simple error can cause expensive (and embarrassing) problems for your business. In fact, you’re better protected if payroll is processed by someone other than the bookkeeper or accountant.
Theft and Malpractice. Professional bookkeeping services have a key advantage: Legitimate outsourcing providers maintain insurance for theft and malpractice. Individual employees don’t. Should a serious error (or fraud) occur, your only recourse is to fire the employee and attempt to collect with a lawsuit.
Confidentiality. Confidentiality may be important if you want to keep owner-level information from all your employees. While “transparency” regarding employee pay grades is sometimes touted as a potentially motivational policy, the fact is, most business owners aren’t ready for everyone in the company to know their co-workers’ salaries. Outsource your payroll operations to keep salary and pay information confidential.
Physical Loss. Then there’s the unfortunate (and scary) reality that a fire, flood other catastrophic event could damage or wipe out your physical payroll and other financial records. When your payroll is professionally managed off site, you can cross that off your things-to-worry-about list.
Is Outsourcing Secure? Beyond Data Encryption
In 2016, secure accounting procedures are dependent on more than who has access to the locked file cabinet in the office. Once considered a somewhat risky option, outsourcing vital accounting procedures is now one of the more acceptable business practices – and for small businesses in particular, among the most widely recommended. Why?
Professional accounting services providers keep up to date with regulatory requirements. They adhere to industry standards regarding data encryption, verifications, and secure, backed-up cloud software storage, and bring these best practices to the work they do for you.
Outsourced Accounting Means Professionals Are at Your Service
Small businesses, particularly those planning to grow quickly, need many professional and specialized services that, unfortunately, require considerable investment.
In addition to highly trained employees, best-of-breed software solutions are often priced beyond the average small- to medium-sized business budget. More business owners are realizing that it’s not only safe, it’s also smart, efficient and affordable to outsource some professional services.
To find out how SmartBooks can help you get a better handle on payroll and accounting so your staff can focus on your company’s growth, contact us here.