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Outsourcing Your Accounting and Finance Fuction

Accounting

As the owner of an SMB, you have a few options to take care of your accounting and finance. You or someone on your team can multitask, you can bring an accounting specialist into your team, or you can outsource to an accounting firm. In most cases, the cost/benefit analysis will line up with choosing to outsource to an accounting firm.

1. Direct Cost Savings

There are two direct cost savings that you’ll see when outsourcing your accounting and finance functions.

Hiring costs: Outsourced accounting services are either flat-rate or have predictable variable expenses. This usually works out to less than the salary, benefits, additional office space, computers, and other costs associated with hiring one or more employees.

Division of duties: Even if you have right around 40 hours of accounting work per week, you might need to hire two or three accounting employees for proper internal controls and separation of duties. For example, you don’t want the same person handling your cash and recording your bank deposits, because there would be no check to make sure they aren’t embezzling funds. Having your accounting and finance operations outsourced means there’s a natural separation that gives you appropriate checks and balances without hiring extra staff members.

2. Efficiencies Gained

According to the Bill.com Accounting Services Report, 68% of people who outsource their accounting functions find that it makes things easier and more efficiencies come from several sources.

Internal accountants don’t do everything. Many firms that handle finance functions in-house still outsource their tax returns and major financial reports. However, they still need to take time getting the outside firm up to speed, and the outside firm often bills for time spent reviewing work done by the internal accountants.

Employees must be supervised. Even if you have someone independently doing “all of the accounting,” you still need routine check-ins, timesheets, and similar tasks that take manager time.

In-house accounting functions have high turnover. These are often relatively junior roles with little room for growth in a small company. You’ll spend additional time hiring and training, and could also be left covering for a sudden departure.

Outsourcing lets you focus on what you do best. 80% of outsourced accounting service users say it gives them more time to focus on their business. This includes things like making your product better and planning for future growth.

3. Higher Levels of Service

Outsourced finance and accounting functions also allow for the highest levels of service. This includes everything from routine bookkeeping services to CFO-level work.

Over half of outsourced accounting users are less worried about mistakes. Instead of trying to figure things out on their own, they’re able to rely on experienced practitioners with established processes to get things done the right way.

31% of outsourced accounting users say it allows them to make better business decisions. This is from a combination of having access to more data plus having advice on what data to collect and how to use it.

28% of outsourced accounting users see a direct increase in profit. This isn’t just from the cost savings of outsourcing but also from implementing the advice provided by their accounting firms.

An outside perspective can be beneficial. When you’re making major business decisions, you may have an emotional attachment to certain alternatives or disagreement among your team. Your outside accountant can give you an outsider’s neutral perspective including both an analysis of the numbers and strategic advice based on the mistakes and successes of other businesses the accountant has worked with.

Outsourced accountants are often more experienced. When you hire accounting and finance staff, they may be entry- to mid-level with a narrow range of experience.

Outsourced accounting gives you multiple CPAs working on your account each with their own areas of expertise. These additional perspectives help you add even more value to your business.

Outsourcing gives you a more proactive approach. Internal accounting hires are often made because you have to do accounting, and their jobs center around completing required reports. Outsourced services help you handle routine tasks, but the real goal is to proactively find ways to increase your profits and improve your efficiency.

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We’re pioneering the virtual CFO and accounting services model with a team-based approach that covers accounting, finance, and other business functions. We work with small and mid-sized businesses across all industries and create tailored solutions to match your needs. Interested in learning more? Fill out the form below to schedule a consultation.

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