What are the advantages of outsourcing accounting services in Kenya?
Outsourcing is the practice of hiring an outside party by a company to perform services and create goods that were either traditionally performed in-house by the company’s own employees or did not exist before. In this article, we are going to review the advantages of outsourcing accounting services in Kenya.
What should you look out for when you decide to outsource accounting services?
Outsourcing some of your business functions such as accounting services offers great benefits. Some of these benefits include saving you time, resources and you get expertise that may be lacking within your team.
Once you decide to outsource accounting services in Kenya, the next step would be to choose an outsourcing company that would be a great fit with your goals and objectives. Most importantly, the outsourcing company should be able to match your needs and requirements. We believe, when outsourcing accounting services, the quality of performance and efficiency must be the top priority.
The first question you should ask yourself is, what accounting services do you need? Is it management of financial accounts? payroll services? remittance to statutory authorities or taking care of your account payables and receivables? After you have this sorted out, it is time to look for a professional who can deliver what you want. The team of accountants you outsource is responsible for ensuring that the company is compliant with the law and in line with the financial guidelines.
Companies in Kenya have statutory obligations which are remitted to various authorities and have deadlines. These include: completion of monthly VAT Returns and submitting online to KRA on iTax, calculation and submission of Withholding Tax Returns, reconciliation of statutory deductions such as Pay As You Earn (PAYE), National Social Security Fund (NSSF, National Hospital Insurance Fund (NHIF). They also include the industrial levy paid to the National Industrial Training Authority Levy (NITA) with payroll among others.
It is important to take note of the deadlines on which the payments are to be made and to which authority they ought to be paid to. This ensures you are in compliance and avoid penalties.
Advantages of outsourcing accounting services in Kenya
Outsourcing accounting services in Kenya has advantages to you as a business owner. Some of these advantages include:
It provides the opportunity to acquire the expertise you really need
As a business owner, you need to understand what you need when it comes to accounting. Accounting services may include, but are not limited to Microsoft Dynamics, SAP, and QuickBooks. Therefore, you are able to analyze and decide what works for you. If you are just setting up your business, you will outsource various accounting services such as reconciliation of bank accounts, petty cash, audit preparation, and debt management. You will also need to do the payroll management which entails, remittance of statutory deductions such as PAYE, NSSF, NITA, NHIF, HELB e.t.c. We all know that as a business grows, the level of expertise required also increases.
Accounting experts are best suited to advise you on several issues; how you can invest better, the best accounting software to use in order to make accounting more efficient, and will keep you updated on issues such as changes in the tax regulations.
It saves you the cost of recruitment and hiring accounting staff
The process of recruitment is often very demanding and time consuming. As a recruiter hiring an accounting team you need commitment since you have to be actively involved so that you hire the team you need. Going through their applications, shortlisting and conducting a series of interviews is a time-consuming process. This may take a lot of time you could use to focus on your goal, which is building the core of the business.
Therefore, when you decide to outsource accounting services in Kenya, this is an advantage for you. Why? Because you are working with professionals who know their craft. All you have to do is pick out the services you need and they will take care of the rest.
It allows you to plan your budget efficiently
Every accounting firm has its own payment methods. The rates may differ because some of them charge an hourly rate and others on a monthly basis. Without the cost of full-time staff in your company, you can choose the payment terms that suit your needs and budget the most.
This gives you the opportunity to benchmark and settle on the option with maximum benefit and minimum cost.
It helps you to ensure the compliance of your business
Outsourcing a reliable accounting firm is crucial because they will have to keep you updated on the latest changes in the regulations. For example in 2020, due to the Covid 19 pandemic, the government had put in place provisional tax reliefs. Value Added Tax (VAT) from 16% to 14%, Pay As You Earn (PAYE) and corporate tax from 30% to 25%, and 100% relief to individuals earning a gross salary of less than Ksh 24,000.
This is crucial information for you as a business owner to ensure that you comply with the law. Hence it determines who you choose to outsource. The accounting expertise, will go a long way in ensuring that your business is on the right track by compliance.
It increases efficiency
Once you as a business owner outsource accounting services in Kenya, you get an opportunity to focus your energy and time on profit and other core business activities. This will help you fous on getting clients for your business, networking, etc.
Outsourcing professional and experienced accounting services brings forth very many benefits. As a business owner, you can acquire high-quality services and cost effective pricing, you can make sure that your financial data remains secure and confidential, you get excellence in services delivered within strict deadlines and you also get customized services and solutions in relation to your overall business needs.
When outsourcing accounting services it is important to make sure that you do your research. Working with experts in the field assures you that your finances and being taken care of appropriately.