Navigating Retail Finances: Key Considerations for Outsourcing Accounting Services

Outsourcing has become a popular solution for retail businesses looking to streamline their operations and reduce overhead costs. One function that is often outsourced is accounting due to the many advantages it provides. 

As an employer in the retail industry, it is important to understand the potential benefits and considerations of outsourcing accounting services. 

This article will discuss how outsourced accounting for retail can benefit your business, the various finance services that come with outsourced retail accounting, and what you should consider when choosing an accounting service provider to handle your financial operations.

Why Retail Businesses Should Consider Outsourcing Accounting Services

Outsourcing your retail accounting process can bring numerous benefits to your business.

Cost savings 

Outsourcing eliminates the need to hire and train in-house accounting staff, which can be costly and time-consuming. You only pay for the services you need, making it a more cost-effective solution for small and medium-sized businesses.

Furthermore, you can save tens of thousands annually on labor costs by outsourcing accounting to certain regions, like Latin America (LatAm) or offshore accounting locations.

Access to accounting expertise 

Another reason to outsource retail accounting services is that it allows you to tap into the expertise of skilled accountants who specialize in retail accounting. These experts have a deep understanding of the unique financial challenges and regulations that come with running a retail business.

Enhanced accuracy and compliance 

Outsourcing accounting functions can also improve the accuracy and compliance of your financial records. Experienced professional accountants have the necessary skills and tools to ensure that your books are accurate, up to date, and in line with industry regulations.

Streamlined financial management 

By outsourcing to accounting professionals, you can implement more efficient financial management and improve decision-making, ultimately contributing to the growth of your retail business.

Increased focus on core retail business activities

With your accounting taken care of by experts, you can focus on your core business activities and drive growth and profitability. This is especially beneficial for small retail businesses that have limited resources to handle complex financial tasks.

Access to advanced accounting technology 

Outsourcing also allows you to benefit from advanced accounting technology and software that may be too expensive for your business to acquire. 

This can help improve the efficiency and accuracy of your financial processes. According to a survey by QuickBooks, accountants find that the top benefit of technology is that it increases revenue as a result of greater efficiency.

Key Services Offered by Outsourced Accounting Providers

Third-party accounting outsourcing providers can provide a wide range of services, including the following:

Inventory management and reconciliation

One of the biggest challenges for retail businesses is managing inventory levels. Outsourcing retail accounting services can help you accurately track and manage your inventory, ensuring you always have the right amount of stock and identifying any discrepancies.

Outsourcing can also help reconcile physical stock counts with financial records. This ensures that your financial statements accurately reflect the value of your inventory, reducing the risk of errors and fraud.

Sales tax compliance

Retail businesses are subject to various sales tax regulations, which can be complex and time-consuming to manage. On average, retailers spend 209 hours and $24,032 on sales tax compliance each month—more than manufacturers or software companies. 

Outsourcing providers can make this process more efficient by handling the calculation and filing of your sales tax returns, ensuring compliance with all applicable laws.

Outsourcing can also help ensure that your business is compliant with local and state tax laws, reducing the risk of penalties and fines.

Tax regulations are constantly changing, making it challenging for many retail businesses to keep up. Outsourcing providers have the expertise and resources to stay updated on any changes in tax laws and adjust accordingly.

Financial planning and analysis

Outsourced accounting services help create budgets and financial forecasts for your retail business. They can also help you make informed decisions about your spending and investments, ultimately leading to increased profitability.

Additionally, outsourcing providers can analyze your sales data to identify trends and opportunities for growth. This information can help you make strategic decisions to improve your business’s financial performance over time.

Accurate analysis provides valuable financial insights for business growth and cost-cutting measures, helping your retail stores become more efficient and profitable.

Management of fixed assets and depreciation schedule

Outsourcing can help you track and manage fixed assets, such as equipment and property. This includes accurately recording the value of these assets on your balance sheet.

Outsourcing providers can also calculate depreciation expenses for tax purposes, ensuring that your business complies with relevant regulatory requirements.

By outsourcing these complex accounting tasks, you can be sure that your business maintains accurate records of asset values and useful lives, which is crucial for making informed financial decisions.

Factors To Consider When Choosing an Outsourced Retail Accounting Provider

To ensure you partner with a high-quality retail accounting outsourcing provider, keep the following key factors in mind.

Expertise in retail accounting services

One of the most important factors to consider when choosing an outsourced accounting provider is their specialized expertise in retail accounting. Retail businesses have unique financial needs, so it is crucial to work with a provider that understands the industry.

Scalability and flexibility

As a retail business, your accounting needs may vary throughout the year. It is important to choose an outsourcing provider that can scale their services according to your needs and provide flexibility in terms of services offered.

For example, outsourcing with Near allows you to tap into a pool of qualified financial professionals who can adapt to your changing accounting requirements, whether it’s during peak seasons or when expanding into new markets.

Data security and confidentiality

Retail businesses deal with sensitive financial information, making data security and confidentiality a top priority. Before choosing an outsourcing provider, make sure they have robust data security measures in place to protect your company’s financial information.

Near’s recruitment process ensures that the professionals we source for our clients have a strong track record of maintaining confidentiality and adhering to strict data security protocols.

Technological capabilities

In today’s digital age, it is important to work with an outsourcing provider that has advanced technological capabilities. This includes using accounting software and tools to streamline processes and provide accurate financial reporting.

Common Challenges and Solutions in Outsourced Retail Accounting

Retail businesses face unique challenges when it comes to managing their finances. Let’s discuss some of the most common issues and how to overcome them.

Integration with internal systems and processes 

Outsourcing accounting services can be a smooth and seamless process if they are properly integrated with your internal systems and processes. It’s important to ensure that the service provider uses the same software and follows the same procedures as your in-house team.

To achieve this, choose a provider with retail accounting experience and an understanding of your industry’s unique needs.

Communication and collaboration 

Effective communication and collaboration are crucial for successful outsourced accounting. When working with a remote team, it is important to establish clear channels of communication and set expectations for regular updates and reporting. 

Look for service providers with strong communication skills and a dedicated point of contact who can provide you with timely updates on your finances.

Adapting to changing business needs 

The retail industry is constantly evolving, and your business needs may change over time. Your outsourced accounting team should be able to adapt to these changes and provide you with the support you need. 

Therefore, choose a service provider that offers flexible accounting services and can easily scale up or down according to your business needs.

Ensuring regulatory compliance 

Compliance with financial regulations is crucial for any business, but it can be especially complex for retail companies. Outsourcing your accounting functions to a reputable service provider can ensure that you stay compliant and avoid penalties. 

Look for service providers with experience dealing with regulatory compliance issues and a strong understanding of the laws and regulations in your industry.

Final Thoughts

Outsourcing retail accounting services can bring numerous benefits to your business, from cost savings to enhanced efficiency and accuracy. However, it is important to carefully consider your options before choosing a service provider.

With our expertise in recruiting from LatAm, we can help you find the right accounting professional for your retail accounting needs. Near’s extensive network of skilled talent ensures that you will have access to qualified accountants at competitive rates.

Don’t let the challenges of communication and adaptation hold you back from reaping the rewards of outsourcing. Contact Near today and let us help you take your retail business to the next level with our tailored recruitment solutions. 

Book a free consultation call to learn more about how we can help your business grow with expert finance talent.