How should Recruitment Industry overcome the top 5 accounting challenges?

Outsourcing your accounting: 7 common questions answered

June 23, 2021

IMS Decimal announces the appointment of Tony Bolger.

October 14, 2021

Recruitment companies are experiencing a phenomenal demand for their services, as employer confidence in the economy continues to grow. This has left some recruitment agencies struggling to keep up with the surge in demand for their services - and unsure about the path ahead.

Successful recruitment businesses and staffing agencies must continually update their operations in order to meet the demands of the market. This is especially true for the finance and accounting department.

To stay ahead of the curve, businesses are looking for solutions that will help them streamline their accounting and finance management and overcome the various challenges that they face on a day-to-day basis.

So, what are the current top five accounting challenges, and how should you navigate them?

Overcoming the top 5 accounting challenges

Let's look at some challenges facing the recruitment sector and tips to make things easier for you to keep your business performing:

1. Lack of cloud base accounting and finance systems

Nowadays, we use online technology everywhere in our lives and the days of flipping through piles of paper looking for invoices are long gone. With today's advanced online technology, we can keep a close eye on what is going on and access business account information from anywhere.

With the shift to home working, many businesses are finding their traditional accounting systems are no longer fit for purpose, causing delays to bill payment, client invoicing and payroll. A recent survey has found that over half of employers (55%) expect to see an increase in staff working from home part of the week, and nearly half of employers (49%) expect to see an increase in staff working entirely from home. While some companies have moved their accounting to the cloud, many still rely on desktop software to manage their organizational accounting.

If you are moving from traditional accounting to cloud accounting, our team of experts can assess the work involved and manage complex processes. We also have hands-on experience of multiple accounting packages, and we are happy to suggest the best solution for your exact business requirements. Our specialist team will deliver all your accounting and payroll tasks before, during, and post-transition to help you move smoothly and painlessly from traditional accounting to cloud accounting.

2. High attrition rates of your onshore employees

A buoyant labor market means there are more opportunities for employees, leading to increased turnover or churn rates. You cannot underestimate the importance of solid accounts and a finance team, especially with ensuring that you are equipped to handle the day-to-day matters of a recruitment business. The more smoothly your accounts and finance department runs, the easier it will be to make business decisions.

If employee turnover is high, it can become a headache for companies because it means they have to spend more time and resources recruiting and onboarding new employees. Turnover is expensive for companies; not only the cost of training new employees but lack of continuity means service quality can suffer. Each time a new employee steps into a role, they need to absorb the knowledge and skills of someone who just left, which can affect the whole team's performance, take longer for the team to reach its long-term goals, and lead to higher turnover rates in the future.

Partnering with a company that specializes in outsourced finance and accounting not only frees up time for the agency's busy team but also gives the agency more consistency and stability with financial reporting, payroll, credit control, and client billing. IMS Decimal provides a full service, which includes a dedicated implementation manager who sets up standard operating procedures (SOPs), organizes team training and manages the introduction of new processes and procedures.

Outsourcing your finance and accounting department is a great way to reduce business costs and overheads, as it is less expensive and offers greater flexibility than employing people directly.

3. Diversified payroll and accounting skills

Accounting today is dramatically different from what it used to be. As businesses and industries continue to develop, you need finance and accounting professionals with a range of professional skills and qualifications to support your business.

To provide the level of service your clients and candidates demand, remain compliant with relevant laws and legislation, as well as having accurate and timely reports available, requires your team to have a broad set of finance and accounting skills. The penalties for not covering all bases can be high and very damaging to your business. For instance, if you do not have the right skills in your team to navigate complex accounting and tax regulations, you can be subject to costly fines and loss of valuable brand equity.

When you partner with outsourced accounting and finance specialists you get access to an entire team of skilled, professionally qualified, and trained accounting and finance staff – without the overheads. IMS Decimal cover everything from booking keeping to credit control and management accounting and reporting, so you can worry less about cash flow and spend more time winning new business.

4. Customized financial reporting

Any business will have to deal with accounting and financial reports, even if they are a small company. The most important financial reports to any business are the Profit and Loss Report (P&L) and Balance Sheet. They are essential to any business, each offering valuable information.

But having access to customized financial reports makes all the difference to your recruitment agency's performance. Being able to refer to performance metrics, variance analysis, and financial metrics offers you critical business information and puts you ahead of the competition. Without timely and accurate financial reports, it is difficult to make confident decisions about your organization.

When you outsource your management accounting and reporting, you will always be confident that you have the most accurate financial information at your fingertips when you make business critical decisions.

5. Flexibility and Scalability

Directly employing a fully resourced accounts and finance team can be an expensive business. When business is booming, you cannot hire staff quickly enough and during quieter times, you are paying the salary of people you no longer need.

Every business owner knows that in times of economic prosperity, it's important to have a finance team that can meet demand, even as workload increases. However, unexpected circumstances like maternity leave, paternity leave, sickness absence, and annual leave can reduce your team’s capacity to deliver critical tasks. If you can't deliver payroll and billing on time, you're putting your business and your workforce at risk.

There is a growing trend that many smart businesses are taking advantage of – one that is more efficient, flexible, and responsive to peaks and troughs in demand.

Outsourcing offers you an affordable and flexible way of up-scaling or down-scaling your finance and accounts team based on market demand. You can react quickly, calling on additional resources when your business is growing or scaling back operations when business is quieter. Whatever your situation, IMS Decimal has the capacity and resources to work round the clock to process transactions, prepare reports and process payroll, so you can sleep easy knowing your finance and accounting are in safe hands.

Finance and accounting administration are not tasks that many business owners look forward to, but it's essential if you want your company to be successful. Do you panic every time you need to fill out your company's financial reports? Do you have no idea how much profit you made last quarter? If this is your scenario, it might be a good idea to outsource some of your accounting administrative efforts to experts.

If you are looking for peace of mind and to better manage your time, then consider outsourcing your financial and accounting administration.

Get in touch with our friendly team today or explore our services.

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