As you start the new year and continue to seek ways to make this year better than last, it’s time to take another look at outsourced accounting services. Outsourced accounting and bookkeeping solutions help businesses across all industries save time and money. Here’s an overview of how outsourcing helps and the benefits it provides.
What Is Outsourced Accounting?
In outsourced accounting, a business hires an outside team of accountants to meet its accounting needs. Outsourced accounting companies provide all-in-one accounting solutions ranging from basic services like accounts payable all the way up to CFO services. In addition, the services can be customized to each business. Some businesses may have no existing dedicated accounting team and need a full range of accounting work. Other businesses already have an accountant but need additional help.
What Are the Benefits of Outsourcing Accounting and Bookkeeping Services?
There are many reasons why a business would want to outsource accounting services.
- Scale to size. Especially for a small business, it can be hard to get an internal accounting department that’s the right size. There may not be enough work to hire a full-time accountant, and many good accountants won’t accept a part-time position. This problem repeats as a business grows and has to decide when to hire. Outsourced accounting services are based on the amount of work a company needs and can quickly scale up or down.
- Gain more expertise. Another thing to consider with in-house accounting versus outsourcing is the amount of expertise available. Outsourced accounting teams have expert specialists for each task. Smaller in-house teams often rely on generalists or might hire someone with a lot of experience in one area but not another.
- Save time. Business owners and managers often get pulled away from other tasks to manage their books or oversee their accounting team. With a reliable outsourced accounting services department, things happen at the appropriate time.
- Save money. The cost of outsourcing accounting services is often much lower than hiring an in-house accountant. The savings can include things like not having to set aside office space, not having to separately subscribe to accounting software, and not spending on pay and benefits when your accountants have a lot of idle time.
Who Can Benefit From Outsourced Accounting Services?
Outsourced financial accounting services are highly scalable and customizable. That makes them right for any size business that has accounting needs.
- Small businesses: Small businesses often don’t need a full-time accountant or have the resources to set up an accounting department. If they don’t hire an accountant and instead rely on an office manager who isn’t skilled in accounting, they frequently run into problems like uncollected receivables or poor control of their expenses. Outsourced accounting services give them the expertise they need at a cost right for their size.
- Mid-sized and larger businesses: Even businesses that could handle their own accounting often don’t want the responsibility. They may find it easier to scale if they outsource. They may also prefer to focus on their core business and leave the accounting to the outside experts.
- Not-for-profits: Not-for-profits typically have more complex needs and a much smaller budget. They may have difficulty finding someone who can help them meet their grant reporting and other compliance obligations. Outsourced accounting departments include experts in non-profit and charity accounting issues.
- Businesses that have struggled to hire: Businesses can struggle to hire accountants for many reasons. They might be in an area with fewer accountants available, or accountants may not see career growth opportunities in in-house positions outside the largest corporations. When someone moves on to another position, the business has to repeat the hiring process while accounting work isn’t getting done. Outsourced accounting teams give businesses continuity and stability even when team members change.
Mistakes to Avoid When Outsourcing Accounting Services
Like any other business activity, there are right ways and wrong ways to do outsourced accounting. Here are two common mistakes to avoid.
- Not having a plan. Business owners need to have a plan beyond just needing someone to do their accounting. They should identify specific goals they want to meet and problems they want to have solved. Otherwise, they may sign up for accounting software that doesn’t meet all of their needs or that offers more than they need. If a business owner doesn’t know where to begin, they should talk to a full-service accounting department that can help them identify their needs and how to meet them.
- Choosing a firm without the right expertise. The accounting needs of a construction company, ice cream shop, and software development firm are different. They range from differences in technical accounting principles to what proactive steps a business can take to improve its financial situation. Some outsourced accounting departments only specialize in specific industries, others have specialists for different industries, and others may not have the expertise you need. It’s important to choose the right one.
AccountingDepartment.com is a 100% U.S.-based outsourced accounting, bookkeeping, controller, and advisory services company. With over 150 full-time CPAs and other accounting experts on staff, AccountingDepartment.com has the solutions and expertise for businesses in all industries. The company’s mission is not just to do your books but to help you find ways to control costs, increase cash flow, and reduce accounting hassles while using the leading technology.
To learn more about what we offer and how to get started, contact us now to schedule a consultation.