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5 Common Mistakes Business Owners Make When Outsourcing

Business owners and CEOs approach us daily regarding their outsourced accounting and bookkeeping because that's our job after all. And while AccountingDepartment.com is not the only outsourced accounting and bookkeeping firm out there, we always encourage inquiring parties to conduct their own research and prepare themselves as best they can for making the shift.

For that exact reason, we wanted to list out a few common mistakes that business owners and CEOs make when it comes to switching to an outsourced accounting and bookkeeping provider so that you don't find yourself making these same mistakes and to best prepare you for the transition.

Don't Cheap Out

In most cases, hiring an outsourced provider will end up being cheaper than employing an entire accounting department. Between the hiring efforts, salaries, benefits, and more, it makes sense to consider an outsourced provider as an option.

However, while being cheaper than the in-person department option, taking the cheapest route is not always the best option. You know what they say, "You get what you pay for". When shopping around for an outsourcer, you want to be sure that with the price you are paying, they will be able to provide you with the services you need, when you need them. Oftentimes, with the "cheaper" providers, you can end up with a service that causes more headaches than it cured with outsourcing firms biting off more than they can chew, just to get the money in the door. For a role as important as the accounting and bookkeeping of a company, it is best to focus on the more costly options to get more for your dollar. The financials are what keep a company running healthy and skimping out to save a few pennies will not be worth it in the long term.

Not Setting Clear Expectations

From the start, it is crucial to set clear expectations of what your company requires out of an outsourced accounting and bookkeeping provider.  At all times from the initial discussions, to closing the deal, all expectations should be laid out on the table so that at no point during the service period are either party caught off guard. This makes for a much smoother process for everyone and will avoid disruptions in service.

There are plenty of things that should be clarified, but some of them might include:

  • How often books will be reconciled?
  • In what form and how often will there be communication between the business and service provider?
  • How will account issues that arise be handled?
  • What hours will the service provider spend on the account daily?
  • Can the service provider outsource the work to a 3rd party if they become busy?
  • What are protections, backups, and emergency protocols in place for security breaches, power/internet outages, etc.?
Lacking Proper Communication

With an outsourced accounting and bookkeeping provider like AccountingDepartment.com, the entire accounting department is shifted under the command of the service provider. However, this doesn't mean that you can completely ignore your outsourced provider and not regularly communicate things going on within the company. Staying in the know about what is going on with the company from an accounting standpoint is very important.

An accounting and bookkeeping team is trained in their craft, but if the business owner or CEO wants work done according to their style, communication with the outsourced team is necessary and the overall key to a successful relationship between a business and an outsourcing firm.

Not Thoroughly Screening The Outsourced Service Provider

A lot can be done when it comes to looking up the reputation, testimonials, reviews, and more about an outsourced service provider. Here at AccountingDepartment.com, a demo is the first step when a potential client is interested in our services. During this demo, the entire process of services provided and a rundown of how things work is shown to the potential client. Use times like this as the "screening" or interview process. 

A demo session like this serves as the opportunity to decide if the outsourced service provider and the company will be a good fit to work together. As a business owner or CEO, if you are willing to trust an outsourcing firm with your company's financials, you should have full confidence in the provider from your first exchanges to signing the paperwork.

Going Into The Partnership With No Clear Goals

So you've found an outsourced service provider that provides you the same (or better) service at a lower rate than an in-house department that requires minimum management. That's great! But, without a proper plan going into this partnership, what will you achieve from a business growth standpoint?

Goals should be set early on to maximize the benefits of switching to an outsourced accounting and bookkeeping firm. Money within budgets can be shifted into other areas of the company, more time can be focused on things like sales & marketing, and business resources can be freed up to drive more growth. Don't use the outsourced option as something to just take some of the burdens off of management. Make sure goals are set to turn this opportunity into a growth engine of its own for the company.

Making the shift to an outsourced accounting and bookkeeping provider can be a relatively easy and smooth process that opens up a lot of opportunities for a business when paired with the right company. AccountingDepartment.com prides itself on making transitions easy and worthwhile for business owners and CEOs. If you are considering making the switch to outsourced accounting and bookkeeping, reach out to AccountingDepartment.com today to see if our services would be a good fit for you.

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