Outsourcing accounting services is not for everyone. For every business that embraces the opportunity to save money, improve efficiencies and increase quality by contracting their accounting or bookkeeping functions to an external provider, there are those that choose to maintain the status quo. While the outsourcing industry continues to grow, all the more so as organizations look for smarter ways of doing business in a post-COVID world, there remain many managers who feel no need to keep pace with industry and technology updates and instead stay true to the processes and systems that have previously served them well.
Then there are those organizations that are conflicted by the outsourcing debate. They are not advocates. They are not naysayers. They are neutral, those businesses that do not oppose the concept of handing certain tasks to external experts but are disinclined to take the next step towards making it a reality. When confronted with anecdotal evidence that outsourcing accounting services has proven beneficial for another business, they likely have reasons why doing the same is not for them.
To be fair, many of those reasons seem valid. It would be remiss of us not to ponder why some businesses choose not to outsource their accounting services – and explore whether there is more to consider than initially meets the eye.
It’s understandable many small business operators baulk at the thought of outsourcing their accounting services. “That’s the world of big companies with complex accounting needs,” they say. “Not little, old me who can get by with a bit of DIY bookkeeping and visiting my CPA once a year.” And while that may well be the case for some sole traders, micro ventures or home-based businesses, there are just as many who would benefit from outsourcing aspects of their accounting needs.
While it’s easy to think ‘I’ll just do it myself’, accounting is a specialist skill with no room for error and many small business owners love when they finally have that stress taken out of their lives. Similarly, there are those who relish finally being able to invest their time on tasks that will grow their business instead of wading through spreadsheets and trying to balance their books. Just as outsourced accounting solutions are available for global conglomerates, there are options to support the smallest of businesses.
Make no mistake – outsourcing accounting services makes great financial sense. As opposed to hiring a full-time or part-time accountant or bookkeeper, the ability to only pay for what one needs - be it help with auditing, payroll, accounts payable and receivable or billing enquiries - will save businesses money in the long run. However, there are some decision-makers who believe cost savings alone is not enough of a driver to instigate change.
Little do they realize the wide array of benefits that flow when accounting services are outsourced. One of the great advantages is the ability to tap into the expertise and knowledge of professionals who not only use the best financial tools and solutions but can ensure all financial records meet regulatory and compliance standards. Furthermore, there is the opportunity to streamline accounting and bookkeeping processes, with specific tasks handled with improved efficiency and the potential for a rise in overall business productivity.
Another benefit of outsourcing accounting services is the ability to adjust resourcing needs based on demand and with little risk. Rather than being committed to the cost of hiring new staff and needing to invest in supporting infrastructure or technology, outsourcing allows companies to quickly grow teams – or scale back - as needed.
Better still, countries such as the Philippines boast a wide selection of highly qualified accountants and bookkeepers who are committed to the highest levels of accuracy and quality. While a lower cost of living ensures huge cost savings for their onshore partners, their high level of English language proficiency, cultural compatibility and excellent work ethic mean there is a broad talent pool waiting to be recruited.
Change is rarely high on most people’s agendas, particularly when it seems there is no need for it to happen. As the old adage goes: “If it’s not broken, why fix it” and when a business is ticking all the right boxes in the timeframe they need to be ticked within, there is an argument to be made for sticking with what you know.
However, the danger with getting comfortable with the way things have always been done is the potential to miss the opportunity to evolve and become more efficient. Business Process Reengineering is considered a vital goal of any successful operation via its ability to enhance business by increasing the effectiveness and efficiency of the processes it employs. Critically, it has been shown there is a link between Business Process Reengineering and outsourcing.
A key step in the Business Process Reengineering journey, according to the Chartered Institute of Procurement and Supply (CIPS), is outsourcing or identifying processes that could be better implemented by an external outsourcing specialist. As experts in their field, outsourcing companies are highly skilled at simplifying or removing unnecessary steps in systems and processes, which allows clients to improve functions they may not have thought needed improving. It’s all about improving a team’s efficiency - regardless of how efficient they already thought they were.
In a world where technology is omnipresent, it’s hard to believe some businesses persist with antiquated accounting methods but such is the case. Just as the only clouds some people continue to recognise are white and fluffy, others prefer to track their sales with pen and paper than accounting programs such as Xero and QuickBooks.
Of course there is nothing wrong with that but it is crucial that fear of technology not be used as a reason for shying away from outsourcing accounting services. Accounting automation software has revolutionised the industry and can save businesses of all sizes valuable time, reduce the risk of human error and ensure records are always up to date. The ability to access real-time reports also means potential problems can be identified and resolved before they become actual problems.
Outsourced accounting providers not only use the latest technology-based accounting tools but are well versed with helping clients set up and adapt to such systems. It is remarkable how simple the transition to this type of technology is and a common refrain from late adopters is they wish they had jumped aboard earlier. The same goes for communication tools (eg: Skype, Zoom), cloud-based file management (eg: Dropbox, Google Drive) and eSigning tools (eg: DocuSign), which have made partnering with outsourced accounting firms a breeze at the same time they have helped people pivot to increasingly working from home during the global pandemic.
To return to where we began, outsourcing accounting services is not for everyone. As you have learned though, outsourcing accounting services undoubtedly has the potential to deliver huge benefits for businesses regardless of their size, industry or geographic location. This blog shares more insights into how outsourcing can assist with your accounting and bookkeeping needs.
Business growth and efficiency improvement hints and tips delivered direct to your inbox.
FP&A stands for “Financial Planning and Analysis” or “Financial Planning and Analytics”. Gartner describes FP&A as a “set of four activities that..
Digitalization has been defined as “the use of digital technologies to transform a business model” - but when it comes to it's impact on banking’s..
The accounting profession is on the cusp of a revolution. Once an obvious job choice for anyone with a good head for numbers and a fancy calculator, ..