Key Considerations to Successfully Outsource Accounting
Accounting is an operational function that requires expertise but, unfortunately, may not always be allocated the financial resources to get the level of attention it requires. One trending solution for companies is to outsource an internal accounting function to an accounting firm or specialized accounting company.
Outsourcing can provide an excellent way to get high-level talent at a fraction of the cost. As with anything in business, the relationship must be mutually beneficial, particularly if the outsourced accounting is structured properly and matched to the business’ needs. Several key considerations to successfully outsource accounting are with the development and retention of the talent pool, use of technology to gain efficiencies and focusing services in a specific industry.
People are, without a doubt, integral to the success of outsourced accounting. Companies looking to hire an outsourced accounting firm should look for teams that are created to service clients and remain consistent. Consistency helps establish institutional knowledge and trust. The team structure allows for flexibility while being able to address critical business needs with the highest level of responsiveness. The team structure also allows companies to have access to an immense range of talent, experience and specialties. Outsourcing talent works particularly well when an individual retires or moves on, for example.
As businesses continue to be driven by technology, the accounting profession needs to keep pace. Keeping in mind that many accounting tasks can be replaced by technology, it is key to make sure that technology is being used effectively and efficiently. An outsourced accountant needs to have access to a company’s standardized technology platform to help save time for other tasks. Standardization helps bring new people onto the team seamlessly. Onboarding an outsourced accountant can become a very time-consuming process without the use of technology. Delegating and leveraging human capital are also difficult without standardization. If the wheel must be reinvented every time a new relationship is started, it makes it impossible to hire more accountants.
Choosing what kind of technology to use should be based on factors that will impact the business for the long term. Technology has to be accessible and easy to use by both the outsourced accountant and staff. The outsourced accountant must be able to save in the format the company prefers so the information they need for decision making is always there.
The software that an outsourced accountant uses should also check a few more boxes. The software should continue to be supported and updated by the developer. Without support and enhancement, the technology will not be able to keep up with the changes today’s business environment demands.
Companies can easily outsource accounting when they are in need of specialized industry knowledge. For an accountant, being specialized helps to create internal efficiencies while providing the highest level of service to clients. They can leverage knowledge between clients and respond to any accounting nuances particular to an industry. Specialization is what can take an outsourced accounting practice to the next level by providing a seemingly transactional service offering with the knowledge to open the door to higher-level consulting and advisory services. For companies, it often helps to fill a necessary skills gap.
Aurora Rosado Lazzaro
Aurora Rosado Lazzaro, CPA, MBA, CGMA, is a partner at SobelCo. She works with clients across a range of industries, such as manufacturing, distribution, retail, software, professional services and the nonprofit community. She is a member of the NJCPA.
This article appeared in the July/August 2020 issue of New Jersey CPA magazine. Read the full issue.