Outsourcing certain business functions to third-party service providers is not a new concept. Businesses have used outsourced functions like payroll, IT and human resources for years.
However, many companies haven’t given much thought to outsourced accounting and finance functions. These services can result in a host of benefits — including freeing up your team to spend more time on tasks that add strategic value to the organization.
Who Typically Outsources Their Accounting Function and Why?
Often the best candidates are companies whose growth trajectory requires that they begin to think bigger. At this stage, it’s time to better define their place in the market and how they’re going to move forward. These companies need better financial clarity but might not be able to afford full-time financial and accounting professionals. Knowledgeable consultants with expertise related to their industry can offer comprehensive solutions to complex hurdles facing their business.
Outsourced accounting also works well for leaders who find themselves spending too much time in the business processes and not enough time working on long-term strategic planning. This can lead to misaligned directives, unchecked risk exposure, a lack of focus and direction, and a limited ability to pursue business growth opportunities.
More Benefits of Outsourcing
Your company could realize a number of other benefits from outsourced accounting and finance functions.
Saving time and money — Outsourced accounting and financial work is more cost effective compared to hiring, training and maintaining an internal department. It also solves business capacity issues. Outsourcing can lower your total costs by eliminating expenses related to employee benefits, training and technology/software costs while redirecting valuable time back to growing your business.
Anytime, anywhere access to financial data — Leading-edge cloud accounting technology allows you to close your books quicker and gives you real-time reporting. You’ll gain visibility into your financial health with access to financial data and records anytime, anywhere.
Improved operational efficiency and processes — Outsourcing your day-to-day activities such as billing, payroll and month-end close will free up valuable time to focus on business goals and growth. Rather than chasing after unpaid invoices or manually cutting checks, you can automate these processes and streamline operations.
Access to expert financial resources — It’s challenging to find and retain staff with knowledge and expertise in all areas of your accounting and finance function. Additionally, it’s hard enough to juggle the responsibilities of running a business and managing staff. Outsourcing to a team of virtual accountants ensures your financial records are accurate and up to date, giving you the confidence to make decisions about the future without a lot of oversight on your part.
Reduced risk of fraud — Maintaining proper internal controls to protect against fraud, theft and human error is required for any accounting and finance function. If you are leaning on just a few people to fill multiple roles, this puts your business at higher risk. By outsourcing, you can have a clear separation of duties and greater oversight to mitigate these risks.
Greater peace of mind — If your accounting and finance operations are in order, risks of potential threats are low and visibility into the financial health is readily available, this can put your mind at ease and help you focus more on your overall business strategy.
In addition, outsourced accounting and finance functions could result in stronger planning and execution results, better-informed decision making, improved direction and tactical outcomes, and higher profitability.
Fit is Crucial
When searching for a provider, look for a partner—a firm capable of establishing a relationship with the right levels of communication and trust.
You should also look for industry experience and a firm with a suite of advisory offerings that complement accounting and finance functions. A company’s services can be enhanced by the firm’s expertise in these areas, putting more eyes on the business and leading to more proactive advice.
Fit is also important because you need a strong relationship with your outsourced accounting service provider. Trust between both of you is critical in order to eliminate the need for your day-to-day oversight. However, remember that this relationship shouldn’t eliminate the need for your participation. Your input is key to making financially sound business decisions.
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