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  • Writer's pictureJOS Team

5 Great Reasons to Outsource Your Accounting and Payroll in Japan

If your Japanese office or subsidiary is currently handling finance functions such as payroll and accounting using internal staff, you may be wondering if this is the best approach. Sometimes it seems like accounting and payroll staff are busy at month-end or just before payday, but they really don’t have much to do at other times of the month. Finding and retaining skilled employees (particularly bilingual ones) is also a huge challenge in the Japanese labor market, so employee turnover is always a real concern.

In almost all cases, unless you are a very large business, it makes more sense to outsource these functions to a specialized finance outsourcing firm. At Japan Outsourcing Solutions we have helped dozens of international companies make the transition from an in-house to an outsourced finance system. Here are 5 of the key reasons why this kind of move makes sense:

1. Efficiency

Outsourced accounting and payroll firms handle multiple clients with different reporting dates. They want to help you build a smooth and efficient monthly process around key accounting, payroll, and reporting functions. They employ logical schedules, with clear client approvals and sign-offs, and there is no extra “busy work” that sucks up time and energy. In short, the goal of outsourcing your accounting or payroll should be to increase efficiency and reduce time spent on these “non-revenue generating” functions. Furthermore, as Japan’s leading bilingual cloud accounting firm, Japan Outsourcing Solutions is taking the efficiency gains you can expect to the next level, by employing the latest cloud technology.

2. Expertise

By outsourcing your accounting and payroll to a specialized firm like Japan Outsourcing Solutions, you are gaining access to an entire team of experts in the field, and you will benefit from best practices. On the other hand, if you ask internal staff to handle these functions, you are usually relying on only one person’s experience or skills. Sometimes you may get lucky and find a superstar staff whom you can rely on, however, we often see cases where internal staff did not have the full range of skills or expertise to handle core finance and payroll functions.

3. Cost Savings

There is usually a very large cost savings to be had by outsourcing your payroll and accounting functions in Japan. Full-time bilingual payroll and accounting staff in Japan tend to be very expensive hires, and unless you are a very large firm, there may not be enough accounting work volume to necessitate having full-time staff. For example, employing one full-time experienced accountant and one experienced payroll staff will likely cost between 15-20 million yen per year. An efficient outsourced firm can usually handle these functions

for about 1/3 of the cost. That is a tremendous savings. These savings can be re-deployed to revenue-generating hires.

4. Removing HR Risk

When you have internal staff handling your accounting and payroll, you have a single point of failure situation. What happens if your accountant or payroll person suddenly becomes ill or quits? Can you afford to have a situation where your employees may not get paid on time or financial reports to head office are late? By outsourcing these critical back-office functions, you will no longer have a single point of failure but are gaining access to a whole team of experts who will ensure things stay on schedule. Furthermore, employing internal staff in Japan comes with a whole host of potential risks and responsibilities. Why not allow these functions to be done by an external partner that is highly specialized.

5. Confidentiality of Financial Data

Your accounting and payroll data is highly confidential. Granting access to this information to your in-house staff is always a very risky endeavor, no matter how trusted they are. Having a team member having access to peoples’ salaries can lead to unnecessary conflicts and risks. We like to work with our clients to determine who (generally only key management) has access to payroll, bank, and financial reports. Maintaining this confidentiality and discretion is of critical importance.

Contact Japan Outsourcing Solutions KK today to see how we can help you streamline your accounting and payroll.


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