This week, we take a closer look at the possible risks that can arise when you’re thinking about sending your bookkeeping offshore. Remember, there’s a distinct difference between outsourcing your bookkeeping and outsourcing your bookkeeping overseas!
Benefits of outsourcing your bookkeeping
If you’re a business owner, it makes sense to outsource your business’ bookkeeping. Accounting and finance isn’t your strongest suit… and that’s (more than) OK!
Do what you do best – that’s running your business – and outsource the various business elements that require professional and accurate management. A variety of outsourced services all contribute to the successful growth of business. That may include content marketing, accounting, bookkeeping, or graphic design.
Outsourcing your bookkeeping is great: you’ve recognised that you need professional support in a sometimes challenging and confusing field like finance, and you understand the need to get it right.
When business owners come to us to outsource their bookkeeping, they get immediate peace-of-mind that they’ve chosen a reputable Australian-based company that remains compliant and is up-to-date on all tax and government laws, regulations, and changes.
However, the story can play out differently when you’re thinking offshore…
Business bookkeeping needn’t be stressful. But when you start thinking about sending your bookkeeping offshore – that is, offshore outsourcing – there are a lot of things you must consider.
Australian tax laws
Bookkeeping, despite what some people think, is more than just a tedious, repetitive task. It is a bookkeeper’s job to ensure that BAS statements, payroll, superannuation, GST, tax, and more are all lodged correctly and up to Australian standard. Anything less could result in harsh penalties.
This is probably the most important and significant thing to consider.
BAS – or Business Activity Statement – is a business requirement from the Australian Tax Office that declares how much GST your business owes to the ATO. Overseas, you might know this term as similar to the terms ‘tax’ ‘sales tax’, or ‘VAT’.
Tax rates around the world are difficult to compare as they are rather subjective, so if your overseas bookkeeper is unfamiliar with the BAS process and requirements, you might want to reassess your desire to outsource anywhere other than Australia.
You can learn more about BAS in this blog post.
Secure data storage and privacy
You can have your own policies when it comes to business security and data, including the cloud-based bookkeeping system you use, but you cannot be certain of your overseas bookkeeper’s own degree of data storage and security.
You cannot guarantee that they are using technology or software that matches your security standards, which could put your business’ data at risk.
Working with your accountant
Most businesses have a bookkeeper and an accountant, and these two crucial people liaise together periodically across different stages of the entire financial cycle. Have you considered how your overseas bookkeeper could work with your local accountant? Will this really work?
Supervision is limited
Along with overseas outsourcing comes the expected consequence that you will lose a major degree of supervision and command. You’ll also lose the urgency you might’ve come to expect from a local bookkeeper.
Who exactly is working on your accounts?
While you can do everything possible to try to select a reputable offshore bookkeeping company and individual bookkeeper, you’re never guaranteed to know at all times who is working on your accounts.
This doubt only leads to hesitations and stress that perhaps your bookkeeping is not being done by the person you thought was doing it… and that might mean someone who does not, in fact, have the right or adequate experience and bookkeeping qualifications.
Offshore accounting could cost you more than you think
On paper, the maths can look great – a cheaper service, shipped offshore and out of your hair sounds pretty good.
But along with overseas outsourcing comes a higher risk of human error, shortage of Australian law knowledge, and the lack of confidence that a qualified bookkeeper is taking care of your business’ books.
And when errors happen, they need to be fixed. Feeling discouraged, you choose the more sensible option of a local, Australian-based bookkeeper to fix the errors, paying them what you likely would have paid them in the first place to get it done right the first time around.
Ensure you get it right from the get-go with a bookkeeping service based right here in Melbourne. Whether you need messy accounts tidied up, support with payroll, or new cloud-based software implemented, Maximum Business Solutions can help! Contact us today or call now!