Have You Considered Outsourcing Your Accounting?

A Solution to Technology and Staffing Issues

Outsourced accounting services have grown rapidly in the past couple of years, and as the shift toward a remote work model picks up steam one of the key drivers – customized cloud solutions – will likely keep feeding the trend.

The growth of outsourced accounting services represents a combination of several trends impacting businesses and nonprofit organizations – most notably rapid changes in technology and a shortage of qualified finance candidates. Together these phenomena have driven many businesses to look outside for “on-demand” services that fit their needs.

Consider this scenario:

Your business had to close during the COVID-19 crisis and the resulting loss of revenue will hit your bottom line hard for 2020. A Paycheck Protection Program loan from the federal government helped but qualifying for loan forgiveness will require knowledge of the accounting and compliance guidelines. Moreover, you will need to phase in your operations as business ramps up again, which will involve budget forecasting and cash projections.

And you haven’t been able to find a replacement for your Chief Financial Officer, who retired months ago.

Would now be a bad time to learn that your accounting software is outdated?

The combination of skills that a business would need in this scenario is rarely found in one person. But if you could “hire” a CFO for five hours a week, a controller for eight hours and a bookkeeper for 20 hours, you would have your bases covered.

With outsourced accounting services, you can do exactly that.

Technology and the Cloud

The technology factors driving the increase in outsourced accounting services are complex and rapidly changing.

Increasing demand for cloud services has fueled growth in digital accounting options such as QuickBooks Online, NetSuite, Xero, Intacct and other small business-oriented solutions. As many industries move toward a remote work model in the post-COVID-19 era, the demand for customized cloud solutions will increase, as will the options.

Integration of accounting and bookkeeping functions with these platforms has helped further increase demand for cloud-based accounting services, such as bank account linkage, automatic payments and merchant services, as well as integrated apps like Square, Bill.com, Expensify, PayPal and TSheets. The development of specific apps and integrated solutions is driven by the increasing appetite of businesses and nonprofit organizations for solutions that are highly specific to their industries and needs.

But with all these expanding capabilities and complex integrated applications, many organizations find they are not familiar with all the platforms and don’t have the time to evaluate them, make selections and then train staff to use them.

This is where outsourced accounting services come in. Working with professionals who are specialists in accounting technology enables businesses and nonprofits to find customized solutions and put them to work right away.

A strong technology-oriented individual with analytical skills and an understanding of cloud-based solutions can help an organization integrate its finance, operations and sales reporting and take its business to the next level.

Consider the experience of a young optometrist who bought a practice from a retiring doctor. The buyer didn’t know if the existing accounting systems were appropriate for the practice, or what solutions might be better. An evaluation of the accounting software, as well as the insurance software that is important to a health care practice, resulted in several recommendations for upgrades to new solutions. The optometrist also chose to obtain a monthly review of the books by an outsourced controller-level professional.

The optometrist’s experience is evidence of another advantage of outsourced accounting services. The outsourced finance professionals you work with are often highly-trained certified public accountants, or they have CPA firm backup in the event that a complex business issue should arise, such as the opportunity to expand through a merger or acquisition.

Firms that provide outsourced accounting solutions often provide help with a range of treasury and cash management tasks beyond standard monthly accounting, such as working capital optimization, cash flow preparation, credit facility analysis, debt compliance monitoring, investment monitoring, and special projects.

Access to the services and expertise of a CPA firm gives you the potential for referral sources and specialty services such as valuation in the event you decide to sell your business, cost segregation services that can uncover significant tax savings, and even international business experts.

In Demand

Professionals with controller-level skills are most in-demand in the outsourced accounting environment. Businesses need that mid-level person who has analytical skills and can track down problems, and who is confident and competent with technology. This type of person can help with audit preparation or information gathering for compilation.

Controller-level skills are especially important right now with the accounting that needs to be done in relation to Covid-19-related relief loans. Professionals who have the drive to analyze and optimize are hard to find, and when you do find them, they may not be located in your market, so outsourcing is an advantage.

Staffing Efficiency

Outsourcing allows an organization to realize staffing efficiency and potential cost savings. If your organization’s accounting and bookkeeping can be managed in 20 hours per week, there is no need to pay a finance professional for a 40-hour week. Moreover, you may find that you need a mix of finance-related skills and decision-making capabilities, but you can’t afford to hire a CFO, a controller, and an AP/AR manager.

The ability to access different skill and experience levels in an “on-demand” fashion has contributed to the growing popularity of outsourced accounting. An organization that needs 10 hours a week of CFO-level services and 25 hours a week of bookkeeping can access the exact service mix it needs.

Businesses and nonprofits that have seasonal needs find that outsourcing enables them to ramp up services as needed by outsourcing. Retail businesses that see a significant increase in revenue around the holidays, or hospitality businesses that hire seasonal workers for the summer, for example, may need extra finance help at those times.

With outsourcing you do not need to expend the time required to search, recruit, interview, perform background checks, onboard, and train new hires. Additionally, you needn’t deal with related considerations such as employee benefits, office space, and equipment.

Avoiding time and expense of technical accounting training for finance staff, including GAAP, payroll, sales tax and property tax is another benefit the comes along with outsourced accounting.

Time to focus on core business

The American Institute of Certified Public Accountants and Bill.com conducted a 2018 survey of 1,700 small and medium-sized businesses that outsourced accounting and bookkeeping functions. Some of the findings included:

  • 80 percent of organizations that outsource all finance functions reported more time to focus on their core business.
  • 68 percent reported that accounting was easier and more efficient.
  • 53 percent reported that they worried less about mistakes in their accounting.
  • 28 percent reported increased profit resulting from better decision making.
  • 30 percent who acted on technology recommendations from their outsourced accounting advisors reported greater financial insight.
  • At Windham Brannon we are committed to helping you find the best combination of outsourced finance solutions for your company.

At Windham Brannon we are committed to helping you find the best combination of outsourced finance solutions for your company. Contact Carlye Dooley and Rebecca Smith and learn more about Windham Brannon’s Client Accounting Service offerings.

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