Growing businesses often find themselves at a crossroads when it comes to performing work in-house, giving it to technology, or giving it to third parties. At some point, what your small business could get done is simply not going to cut it when you’ve grown to a mid-size business. This dilemma is especially true in accounting.
Successfully expanding businesses often hit a wall with in-house accounting power, and they need to add expensive headcount in order to meet growth goals. This is when many opt to outsource. But what are the benefits of outsourcing accounting services and where would you begin?
Read on to see what are the most commonly asked questions about outsourcing we get here at A.C.T., and how our experts respond.
Q: What are some of the markers of a business that might benefit from outsourcing accounting services?
A: One of the greatest indicators that outsourcing might be for you is if you’re interested in expanding your accounting, payroll, and tax capabilities without having to hire more in-house people. Hiring is expensive, and it can take businesses untold amounts of time and money to find the right person, move them through the interview process, onboard them, and then set them up for success. Outsourcing takes that burden off your plate.
It also is beneficial for businesses that anticipate growth but would prefer to skip adding more office space—or even moving—to accommodate that growth. The right outsourced accounting provider should be able to provide everything through the cloud.
And if you have started to notice that you might be outgrowing your systems like spreadsheets or QuickBooks, then it’s definitely time to explore outsourcing.
Q: How would a business know if they are outgrowing solutions like spreadsheets or QuickBooks?
A: Take note of how much time your accounting team is spending buried in those systems. Are they spending hours on manual data entry and re-entry? Spreadsheets are just fine when you’re small, but growing businesses will not be able to maintain productivity with them. Manually researching, re-entering, and verifying data that’s already captured elsewhere is a time suck. And they invite errors.
Also consider if your reliance on spreadsheets is heavy. Are you exporting data to and from them? Are you setting up dummy accounts and creating additional journal entries each month? These workarounds are inefficient and can even lead to a lack of control and compliance.
Q: What other warning signs might there be for a business that should consider outsourcing?
A: A major warning sign is if you lack real-time visibility into your metrics. That visibility is essential for making timely decisions that directly impact your performance. Another is if you are struggling to analyze the volume of data you capture. Manipulating high volumes of data at strategic levels can strain your traditional systems. Doing so is most effective with an expert partner.
Q: What kinds of cost ramifications are there for businesses that want to keep accounting in-house versus going outsourced?
A: The costs associated with traditional recruiting, hiring, and training a new single employee versus hiring the right outsourced team can save tens of thousands of dollars. An outsourced partner should identify inefficiencies, inaccuracies, and risks that help you focus on your important financial rocks. The partner can fully support you with customized systems and processes that align with your growth goals. There is major ROI in all of that.
Q: What are some of the benefits a business should expect from outsourcing accounting services?
A: First, the right partner should be leveraging the industry’s top-line technologies. Solutions like Sage Intacct are ones to look for. If your outsourced accounting consultant is a Sage Intacct partner, you’ll soon be well on your way to demonstrably improving efficiencies and cost savings.
You can expect your partner to introduce automation that will increase your accounting accuracy and start saving your team immense amounts of time. You’ll also benefit from being able to consult with the partner as an extension of your team—except one that is solely devoted to underscoring your growth goals through payroll, bookkeeping, tax preparation, and other services.
You’ll get things like real-time financial data, ongoing professional and leadership support, immediate implementation of solutions for better visibility, and a think tank of knowledgeable, experienced accounting professionals.
