James H. Clarkson, Jr., CPA
In today’s high-stakes business environment, companies outsource some operational functions to save time and money. As one of the first processes to be widely outsourced, accounting procedures continue to be released from in-house operations at an epic rate. This is because outsourced accounting practices can save money and time while offering an unwavering peace of mind to managers. As a business consultant, company owners often ask me whether they, too, should make this switch. My answer, consistently, is “absolutely”.
Outsourcing Your Accounting
I’ve seen various types of companies benefit as a result of outsourcing. Some business owners, however, are still unsure if the practice is right for their company. While there are many factors to consider before making the switch, below are a few reasons why outsourcing your accounting practice could be a smart business move for your company:
Reduce overhead costs and increase efficiencies. Due to the specialized nature of the work, several employees are often needed to operate in-house accounting. In addition, accounting procedures may require businesses to hire additional personnel for task separation and internal control. Outsourcing proves effective at reducing overhead because it eliminates the need for extra benefits, training, office equipment, downtime and taxes, just to name a few.
Improve budgeting practices. Does your budget need to be refined? Companies that deliver outsourcing services provide expert advice on future planning and money management. Oversight from outside experts can help you identify financial problems before they occur and ensure the financial viability of your company.
Improve cash flows. Do you run a successful business but sometimes struggle to pay the bills? Cash shortfalls can be stressful, but outsourcing can allow your business to take advantage of everyday accounting practices to help manage cash shortfalls. For example, a professional accountant can improve your cash flow by skillfully delaying disbursements while aggressively pursuing unpaid debts.
Save time and get convenience. How much time has your accounting team wasted trying to solve a complex (or simple) accounting problem? Have you or your senior management team ever spent time bookkeeping? Let the experts take care of the accounting and free management to tackle the duties in their job descriptions. Outsourcing allows you to stop wasting valuable time on accounting and focus on business strategy.
Receive sound advice. As opposed to hiring a “general” bookkeeper, outsourcing provides an opportunity to align yourself with a professional who has experience with your type of business. Companies that provide outsourced accounting services employ knowledgeable personnel with expertise in every area of accounting. Accordingly, you will have access to individuals with specialized knowledge to fit your specific accounting needs.
Expand staffing flexibility. As mentioned earlier, your time is better spent selling your services or product than it is working on the accounting. This is also true for your senior management. Outsourcing allows you and management to focus on developing new business opportunities rather than tackling day-to-day tasks within the company.
- Get real-time access to your data. A dedicated accounting company will be able to assist in timely decision-making through technology. For instance, cloud-based accounting applications give you access to up-to-the-minute financial records on a web browser. The use of technology offers easy access to data, aiding day-to-day and strategic decision-making.
While outsourcing accounting procedures offers many advantages, it is important that companies making this move have a thorough understanding of their provider’s reputation, security practices and areas of expertise. In addition, companies must remain vigilant and not entirely surrender control of their accounting practices.
Many companies are benefiting from the rewards of outsourcing their accounting. As this practice continues to grow and the workforce becomes accustomed to its convenience, the prevalence of outsourcing accounting procedures may offer yet another reason for companies to take advantage of the benefits it offers.
James H. Clarkson, Jr. is a partner in the consulting group at BlumShapiro, the largest regional accounting, tax and business consulting firm based in New England, with offices in Massachusetts, Rhode Island and Connecticut. The firm, with nearly 400 professionals and staff, offers a diversity of services which includes auditing, accounting, tax and business advisory services. In addition, BlumShapiro provides a variety of specialized consulting services such as succession and estate planning, business technology services, employee benefit plan audits, litigation support and valuation, and financial staffing.