Outsourcing Accounting Services: How It Benefits Companies in Indonesia
It may be a less popular business destination than Singapore and Hong Kong, but Indonesia actually has a lot to offer. As a member of ASEAN, it has free trade agreements with most of the major Eastern hemisphere powers, including Japan, India, and China. Foreigners are able to fully own a wide variety of businesses there, and it has a fast-growing middle class seeking goods to consume.
Still, starting a business there is not without its challenges. One major challenge faced by businesses entering any foreign market is unfamiliar accounting practices. Luckily, there are businesses which can carry out accounting services on your behalf, whether you’re a sole trader or a large corporation. In fact, some estimates claim that more than 50% of small businesses outsource at least one aspect of their business, and the most popular by far is accounting.
This quick guide explores why outsourcing accounting services is a good idea for businesses in Indonesia.
1. It saves money
One of the most appealing aspects of doing business in Indonesia is that almost everything costs less. And while it is true that labour costs are generally lower in Indonesia than in Western countries, qualified accountants in the country still command a higher average salary than many of their peers. Once you’ve also factored in the costs of advertising the position, reviewing candidates, and any training or additional benefits they’ll receive, in-house accountants become a fairly expensive proposition.
If you outsource instead, the cost can be more than ten times cheaper. Simply by outsourcing your bookkeeping accounting in Indonesia becomes an even cheaper place to do business. This frees up more money to invest in core business operations.
2. Access to modern financial tools
Another expense you’d have to face by keeping accounting in-house is that of the accounting software required. An outsourcing vendor, meanwhile, can spread this cost across their many clients. This means that no single business has to foot the entire bill.
Yet clients who outsource with a decent vendor still get access to all of the valuable information and insights that state-of-the-art accounting software can provide. This benefit applies to other numerical tasks, such as outsourcing payroll or invoice management, too.
3. Reduces business risk
The government in Indonesia is no different from any other government when it comes to errors on financial statements. Pleading ignorance or accident is unlikely to placate them, and even if you are ultimately proven right, your business can face a lot of trouble in the meantime.
It is generally safer to rely on local expertise. Experienced outsourcing vendors will know exactly how to prepare your statements and when to submit them. After all, they’ve been doing it day in and day out for years. Plus, the risk of genuine fraud is also reduced. Just getting an independent third party to glance at your numbers already makes it less likely.
Conclusion
Recent years have seen Indonesia seeking business partnerships with other countries. The country has a lot to offer entrepreneurs and investors, but it can be extremely challenging to try and take on every aspect of business in a new country all by yourself. Outsourcing accounting services can significantly reduce this challenge while saving you money and time.