As we approach a new year, it’s fair to say that many consider outsourcing to be the new normal for business. That’s because the model allows companies of all sizes to meet business objectives and grow without taking on too much risk or making expensive capital investments. And, according to industry experts, while companies have many reasons for hiring out certain business functions, there are three primary drivers: controlling costs, focusing on business objectives, and improving capacity. (Source: Deloitte).
But, knowing that it makes financial sense to outsource and knowing what business functions to send to outside experts are two very different things. Should you start with critical IT functions such as desktop support, database administration, or network operations? Or, what about hiring out digital marketing or customer service functions? While these are all solid choices, many companies benefit from the ‘walk before you run’ approach when it comes to outsourcing. That’s why accounting services are a popular choice for subcontracting. Why accounting? While everyday financial tasks – accounts receivable, accounts payable, invoicing, payroll, forecasting, corporate taxes – aren’t a huge competitive differentiator for any organization, each is critical to the success of a business. And, not only that, managing business accounting tasks takes a tremendous amount of time, skill, and resources. Let’s take a closer look at how finding the accounting partner can transform your business for the better.
- Optimizing how you spend time – Hiring a partner to manage bookkeeping, accounting operations and even high-level tasks like forecasting and financial planning, frees up valuable time for internal employees to focus on other tasks. Whether it’s improving productivity, focusing on core competencies, or bringing in new customers, leaders should consider what full-time staffer could accomplish if they weren’t overloaded or stressed handling fundamental business functions such as accounting.
- Reducing costs – Hiring full-time, experienced accounting professionals is an expensive endeavor considering the salary and benefits packages now required to keep highly-qualified candidates interested. With a contracted service, however, businesses only pay for the time actually spent on financial and accounting responsibilities, which can improve productivity and reduce payroll costs significantly. Some experts estimate hiring a contractor to focus on these areas can cost 40% less than having a full-time person on staff.
- Access to hard and soft accounting skills – Today, there are more laws and regulations around business accounting practices than ever before. Increasing complexity and scrutiny makes the processes of staying on top of every financial area and in compliance tougher. These complexities have also re-shaped the role of the account in business, giving professionals higher-level responsibilities. Accountants need to know the tax codes and laws backward and forwards. Not only that but accountants today also require soft skills and knowledge of overall business practices. For these reasons, finding the right full-time candidate is a challenging proposition, especially in a tight labor market. Luckily, the right accounting team can handle transactional accounting tasks as well as the more sophisticated areas like budgeting, forecasting, and financial planning and analysis. By farming out these responsibilities to a partner, business leaders can rest easy knowing they have experienced and qualified individuals with the right mix of hard and soft skills on their side.
- Getting more proactive – Outsourcing accounting operations improves processes because organizations aren’t relying on just one or two in-house employees and instead have access to a team to double-check work. This group should also be reliable and experienced enough to help companies stay proactive and eliminate possible oversights or month-end fire drills. An outside accounting team can help spot red flags and keep business leaders up-to-date about current and expected expenditures and cash flow, for instance. This level of focus can give teams greater peace-of-mind and the confidence needed to make well-informed, intelligent financial decisions at all times.
What are you waiting for?
Outsourcing empowers organizations to extend their in-house capabilities, without the high risks and costs of making long-term capital investments. By evaluating and prioritizing company goals, many companies can easily spot the advantages that come from relying on a partner to manage accounting functions. A skilled accounting team can provide a customized set of services that go well beyond bookkeeping, compliance management, or even forecasting or financial analysis. The right partner can complement internal teams and transform the finance function of the business – elevating it from a transactional to a platform that drives profits and grows the business. If you want help looking at the pros and cons of outsourcing, please get in touch! We’ve helped hundreds of companies successful outsource key business functions – all to reduce costs, improve innovation, and enhance competitiveness. Learn more!