Why Hire a German Accounting Firm?
One of the main areas of priority in both the development and sustainability of any business is the effective management of financial resources. An integral component of sound financial management must include efficient accounting services. As such, many companies both in the United States and in Germany spend millions of dollars every year to cover accounting and other record related expenses such as bookkeeping. The conventional practice has been to employ in-house accountants as part of the company's staff and then charge them with the execution of all the duties related to bookkeeping within the company. However, with the modern expansions in communications technology, coupled with easier access to information, many companies are finding it more effective to outsource the accounting related tasks to professional accountants as opposed to hiring in-house accountants. The trend is increasingly becoming popular in the United States, where many companies are turning to offshore accounting firms to work on their behalf. However, the focus is not to outsource to just any country, but to a country that has the right kind of accounting ethics and standards that will be in line with the goals and objectives of the company. This is one of the main reasons why companies seeking to outsource the accounting of their German subsidiaries use German accounting firms.
The Benefits of Outsourcing to a German Accounting Company
There are many arguments that can be brought forward in favor of outsourcing to a German accounting firm as opposed to employing in-house accountants as part of the company staff on a regular and pensionable payroll. All of these are essentially the advantages that a company based in the United States which has an office or subsidiary in Germany, or which wishes to have the same there, would enjoy by procuring the services provided by such a firm. They include the following:
Perhaps the single most important and most notable of all the advantages that come with the procurement of accounting services from a German accounting firm as opposed to the employment of in-house accountants lies in the cost effectiveness of the former compared to the latter. Specialized German accounting knowledge is hard to find and also quite expensive outside of Germany. Furthermore, considerable savings can be made on money that would have otherwise been used on services such as additional office space and accounting equipment as well as contributions to the employee pension fund. The independent accounting firm will not require any physical space on your premises, leaving more room and saving on rent.
Another significant advantage of hiring an independent accounting firm to handle your accounting needs as opposed to the permanent employees is in the kind of convenience that the independent firm is bound to provide you with. For instance, the firm may undertake to submit duly completed reports and other returns to your company electronically without any need for physical contact. This means that the exchange of information takes place in real time through the internet and files are exchanged instantly, providing the company managers with a lot more convenience.
There is bound to be greater accuracy, in particular regarding local German laws and regulations, when a company outsources the accounting tasks to a German accounting firm rather than employ its own non-specialized accountants. Accountants from independent firms are highly trained professionals and since the firm's normally charge on a project by project basis, the accountants normally take every project seriously and carry it out with the utmost accuracy.
Thus list only highlights a few of the main advantages that independent German accounting firms hold over the in-house accountants, especially for offshore businesses that wish to establish a presence in Germany. The list is hardly conclusive in any way and there are of course many other advantages that can be added to it. In this respect, a distinct set of benefits that come with outsourcing to such companies immediately springs to mind. This is a set made up of advantages that are normally referred to as 'spill-over advantages' given the fact that their provision is not the primary concern of German accounting firms, but they are nonetheless are enjoyed by the companies procuring these services. They include the following:
- Better accounting systems: The company will usually find itself left with better accounting systems, such as more efficient accounting software, than they had before employing the firm.
- Better trained staff: In some cases, the German accounting firm may undertake to provide the company's staff with training guides relating to particular accounting styles and techniques in the course of the duration for which the firm is hired in order to improve efficiency.
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