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Amid Pandemic, Accounting Firms See Higher Demand for Outsourcing Services

Interview conducted on the Hartford Business Journal With blumshapiro Partner Jim Clarkson

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Interview conducted on the Hartford Business Journal With blumshapiro Partner Jim Clarkson

This interview with blumshapiro Partner Jim Clarkson was conducted on the Hartford Business Journal and can be accessed by clicking here.

West Hartford accounting firm blumshapiro has always advised companies on things like taxes and risk management, but a few years ago it started offering clients outsourcing services for certain business functions like payroll.

The full-scale outsourcing operation uses cloud technology to enable blumshapiro staff to do anything from inputting and paying a company’s bills to sending invoices and writing cash flow projections — services all provided off-site, said Jim Clarkson, a partner at the firm who oversees the outsourcing program.

Clarkson said there was always demand for outsourcing services, but this year the firm has seen an approximate 40% spike in inquiries from clients interested in offloading some or all of their back-office finance work.

“Businesses [are] looking at how they were doing things, looking at how they have to do things in the COVID world, and looking at what the new world is going to look like for them,” Clarkson said. “COVID has been a catalyst to conversation as it relates to outsourcing certain functions.”

As cloud-based technology has matured over the past decade, professional services firms like blumshapiro have increasingly offered outsourcing services to business clients that have traditionally handled payroll and other back-office operations in-house, Greater Hartford accounting firms say. Now that COVID-19 has trampled many companies’ revenues and profits, forcing them to cut — or consider cutting — costs, accounting firms are seeing or expecting a spike in demand for outsourcing, which allows businesses to reduce staff in favor of paying a fee to have certain finance functions handled remotely by a third party.

About 30% of U.S. companies outsource part of their business, according to online lending site Fundera, and 59% do it for cost-saving reasons.Clarkson describes blumshapiro’s outsourcing services like a faucet: Business clients can twist the knob and increase or decrease the amount of back-office work the firm handles, depending on economic and other considerations. Some clients just want blumshapiro to take over book-keeping or payroll, while others offload every finance function. Pricing is based on the scope of services a company wants, and is paid in a monthly fixed fee.

COVID notwithstanding, Clarkson said the service makes sense because blumshapiro has the resources and expertise to deal with a range of issues a single employee might find difficult, and it eliminates any lag time that could occur if a finance employee leaves.

“We’re able to give them a level of service that they can trust, and they can focus on the products that they make,” Clarkson said. “We have the ability to eliminate that turnover or natural attrition that employers face in their back office.”

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