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9 Benefits of Outsourcing Your Business’s Accounting Function

9 Benefits of Outsourcing Your Business’s Accounting Function

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If you’ve wrestled with the idea of outsourcing your organization’s accounting function, you’re in good company.

Many small- and medium-sized business owners have grown weary of maintaining an internal bookkeeping staff due to frustrations with employee turnover and the high cost of hiring and training people. Some business owners have turned to outsourcing their accounting function to a CPA firm. If you’re thinking, “I can’t afford that,” think again.

The Benefits

Let’s look at nine benefits of outsourcing your organization’s accounting function. And it’s most likely a cost-effective alternative to maintaining an internal accounting staff.

  1. You’ll have more time to concentrate on running and growing your business knowing that you have experienced professionals taking care of your business’s accounting function.

  2. When you have questions about your organization’s financial data, you’ll have easy access to experienced accounting pros who are intimately familiar with your situation.

  3. You’ll save money. In-house bookkeeping is expensive. When you outsource, you won’t incur the cost of salaries, payroll taxes and benefits associated with employees.

  4. Outsourced accounting services are scalable. If you have a seasonal business, for example, you will be able to adjust the level of service you receive from month to month. Accounting fees can be cut back during your slow season. With a full-time bookkeeper on your payroll, you lose that flexibility because you are committed to paying that person’s salary even during downtimes.

  5. With ongoing outsourced accounting services, you can rest easy knowing your general ledger and subsidiary schedules are being kept current. This means year-end reporting and tax returns will be easier and cleaner, saving you money in accounting fees.

  6. At the risk of sounding cliche, accounting is an investment for your business. Bringing in a professional outside accountant to provide (and analyze) accurate accounting reports and records for your business will save you money in the long run. When your organization’s accounting is kept current throughout the year – and regularly reviewed – you’ll see when sales are up and down, and why. This will help you determine when to adjust expenses. It will also tell you when you need to work on boosting sales. Having a good handle of your accounting will also help you better manage your inventory.

  7. When you outsource your accounting function, your outside CPA firm essentially becomes part of your staff. A good accountant will notice changes and discrepancies as he or she reviews your organization’s monthly and quarterly statements. This allows you to address issues before they become out-of-control problems. My experience is that while most bookkeepers are good at the daily record keeping, many are not always thinking outside the box. With an outside accountant keeping an eye on your business, you boost your chances of getting fresh ideas to improve your finances.

  8. With stealing and embezzlement in the daily news, it’s wise to have someone looking out for your business. Professional accountants are trained to make sure money isn’t walking out the back door. The practice of reconciling your cash, accounts receivable and accounts payable helps ensure that your organization’s financial coffers are in good shape.

  9. Even if you already have a small bookkeeping department, an outside accountant can act as your CFO. Your “outsourced CFO” will manage and coach your bookkeeping staff on how to produce accurate reporting.

    The outsourced CFO approach works extremely well for some of our clients. Their internal bookkeeping staff takes care of the daily deposits, posting sales activity, payroll, etc. I visit the client’s office quarterly to review the general ledger and make corrections as needed. Normally, they compile a list of questions and abnormalities for me before I arrive, and we review the list together. This helps keep everything current and accurate while training the internal bookkeeping staff along the way.

    As the outsourced CFO I also meet with owners and department managers to review increases and decreases in revenue and provide recommendations for dealing with business challenges.

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Published on June 26, 2017