Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services

Why Companies Are Not Outsourcing Their Accounting Services

Posted by Dennis Najjar on December 19, 2016

We regularly explain and blog about the many benefits of outsourcing accounting services. From removing from the need to be an expert outside of your core competencies to leveraging the collective knowledge base of a group of top professionals, there are many reasons to consider outsourcing. However, we also acknowledge that outsourcing isn’t the only solution—and it isn’t just “for every company”. So if you are on the fence about whether or not to outsource your accounting, bookkeeping or controller functions, consider the following reasons you might want to keep them in house. 

  1. Your company really loves paper.

    We aren’t being trite. Some companies really need or want to keep a massive amount of paper in their offices or housed in external filing storage. Some reasons for this may include regulatory requirements or compliance restrictions but others are just a matter of not wanting to change old ways. To the latter we say, “That is OK!” If you really hate the idea of giving up your paper ways, you may want to stick with internal or on site accounting. If you are on the fence, consider that you may be able to create a hybrid approach where you keep certain paper-heavy tasks internal but outsource other areas. An example may include keeping your invoice processing as an internal task if you are particularly sensitive to keeping paper invoicing.
  2. Your company is exceptionally small.

    Until you reach a certain point of growth and revenue, you may simply not need advanced accounting services. Micro businesses, sole proprietorships with limited bookkeeping needs and the growing group of home-based businesses may fit into this category. You can get away with DIY bookkeeping or relying on your CPA to manage your books annually as long as you make sure to set aside some regular time to make sure your books are up-to-date. Once you hit several hundred thousand to half a million in revenue, you should definitely revisit the idea of outsourcing your accounting needs.
  3. Your company has no interest in technology-based services.

    It happens. We don’t necessarily understand it but some companies truly prefer pen & paper methods to technology. The same may apply to Excel-based methods that have alternatives in newer technology and accounting applications. If you really just don’t want to change your ways, there is likely little point in outsourcing. Outsourced accounting companies utilize a lot of forward-thinking, technology-based accoutning methods that they will need to support your business. If you don’t want them, there is no need to look to outsourcing.
  4. Your company would only outsource for money-saving reasons

    Don’t get us wrong—cost conscious motivations have their place and outsourcing can be very cost competitive. But if that is the only reason you would ever consider outsourcing your accounting functions, you might want to reconsider your plans. Outsourcing these days is more about efficiencies and improved services through leveraging superior aggregate intellectual capital (read: not necessarily “cheap”). You may be able to find a cheap outsourced alternative but you likely will not actually want the results that come from that version of outsourcing.
  5. It isn’t broken and you love your current situation.

    This one is simple but deserves mentioning. If your current structure is working for you, there is no reason to change it. If you’re getting the reports you want, in the timeframe you want and the data is correct—why would you even consider changing it? On the other hand, if you are seeing flaws, gaps or errors that you are concerned about, then you might want to consider outsourcing.

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Tags: outsourced accounting services, small business tips