In recent times, inflation has been on the rise not only in the UK but also in other countries, including New Zealand. For example, in the UK, the inflation rate reached a 10-year high of 4.2% in October 2021. Similarly, in New Zealand, inflation rates have been increasing, contributing to the rising cost of living and impacting various sectors, such as the commercial property market and office rental expenses. In this article, we will explore how you can save money, improve accuracy and compliance, increase efficiency, and access valuable expertise amidst the challenges posed by inflation and rising office rental expenses.
1. Impact on Office Rental Expenses:
The increase in inflation has led to an increase in the cost of living, including the cost of office rental expenses. Landlords are likely to increase rental rates to reflect the rise in inflation and maintain their profit margins. In fact, according to a report by the Royal Institution of Chartered Surveyors (RICS), office rental rates in the UK rose by 2.2% in Q2 2021 compared to the previous quarter. Similarly, in New Zealand, the average national rent has seen a substantial increase of approximately 50% over the past five years. Cities such as Auckland and Wellington have witnessed some of the highest rental increases, with average rents surpassing $600 per week. This trend is expected to continue in the coming months.
2. Impact on Businesses:
The impact of rising office rental expenses and inflation is likely to be felt most acutely by small and medium-sized businesses (SMEs). These businesses may struggle to absorb the increase in rental rates, particularly if they are located in prime locations. This can lead to businesses being forced to relocate to less desirable areas or downsizing their office space to save on costs. For businesses that cannot afford to relocate or downsize, the increase in rental rates can eat into their profits and impact their ability to invest in other areas of their business. However, outsourcing accounting services can help businesses save money, which can be reinvested in other areas of the business.
3. Cost Savings:
Outsourcing accounting services can provide businesses with significant cost savings. According to a report by the Chartered Institute of Management Accountants (CIMA), outsourcing accounting functions can save businesses up to 40% in costs compared to in-house accounting functions. By outsourcing, businesses can save on the cost of hiring and training in-house staff, as well as on the cost of office space, equipment, and software required to carry out accounting functions. This can free up resources that can be invested in other areas of the business, such as marketing, product development, or hiring additional staff to support business growth.
4. Improved Accuracy and Compliance:
Professional accounting firms have the expertise and experience to ensure that financial statements are accurate and compliant with regulations. By outsourcing accounting services, businesses can ensure that their financial statements are accurate, up-to-date, and in compliance with regulations, which can help to prevent costly mistakes and legal issues. This can help businesses avoid costly fines and penalties, which can be particularly damaging for SMEs.
5. Increased Efficiency:
Outsourcing accounting services can help businesses to improve their efficiency. By outsourcing, businesses can focus on their core activities and leave the accounting functions to professionals. This can help to improve productivity and reduce the risk of errors, which can save businesses time and money. This can be particularly beneficial for SMEs who may have limited resources to devote to accounting functions.
6. Access to Expertise:
Professional accounting firms have the expertise and experience to provide businesses with valuable financial advice. By outsourcing accounting services, businesses can gain access to this expertise and use it to improve their financial management and decision-making. This can be particularly beneficial for SMEs who may not have in-house expertise in financial management.
If your business is struggling with rising office rental expenses due to increasing inflation, outsourcing accounting services can be a viable solution that can help you to overcome this challenge.
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