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Trying to keep up? It may be time to outsource accounting services.
If you’re like most fast-growing startups in today’s economy, you’re likely feeling the tension of trying to play it safe with existing resources while wanting to race quickly ahead of your competitors.
You may feel torn between scaling up in the midst of economic uncertainty and buckling down on your company’s next big move.
We get it, because we’ve been there, too.
It can feel overwhelming to blueprint an action plan for the future when your team is spinning too many plates — with too few scalable processes behind them. (To say nothing of the stress founders face when they look at the books and realize it’s time to cut paychecks — with no idea how or where to start.)
If you’ve realized that your company’s financial processes are getting increasingly complex — and your in-house team can’t seem to keep up — it may be time to consider outsourcing those accounting tasks to an experienced BPO partner like Enshored.
But what does it mean to outsource your accounting, and where should you begin? Luckily, we have the blueprint to help you get started.
When you outsource accounting services, it typically means partnering with accounting professionals, financial firms, or business process outsourcing (BPO) companies with proven experience in accounting to take a variety of financial tasks that are traditionally done in-house off of your team’s plate.
It’s an easy way for businesses to tap into specialized expertise without the overhead of a full-time internal accounting department.
Outsourced accounting providers usually bring a wide range of accounting functions to the table, including:
However, unlike in-house accounting teams, outsourcing can also enable scalability, flexibility, around-the-clock support, and maximum cost efficiency.
You can adjust the level of support up or down based on your company’s evolving needs, whether you’re a small startup or a fast-growing enterprise. This flexibility is especially useful for businesses that experience seasonal fluctuations or rapid growth.
More and more businesses are recognizing the value of outsourcing their accounting tasks in order to clear backlogs, optimize processes, and ultimately return to the work they originally set out to do. In fact:
But these numbers alone paint only half the picture.
To understand why more businesses have chosen to outsource their accounting, simply consider the ongoing post-pandemic talent shortage: companies everywhere are struggling to staff up and retain top talent. For example, more than 90% of senior management surveyed in one report said they had trouble finding in-house accounting staff.
The benefits of outsourcing, however, go deeper than simply putting people in seats.
Let’s explore.
Cost
The most significant benefit of outsourced accounting services is the potential cost savings.
Businesses can significantly reduce overhead by eliminating full-time salaries, recruiting and training costs, employee benefits, office space, and expensive accounting software. (One Canadian study of SMEs found that companies who outsourced accounting saw increased profits and revenue 75% more often than compared who didn’t outsource.)
The ability to focus on core business
Outsourcing accounting tasks gives business owners and employees more time to focus on their core competencies.
80% of respondents in one report said they had more time to focus on their business after outsourcing accounting functions. And that renewed focus, of course, can lead to increased productivity and growth.
Access to expertise and technology
The typical outsourced accounting team is built around experienced professionals who are well-versed with all the latest accounting practices, tax laws, and financial regulations.
They also invest in advanced accounting software and tools that are often too expensive for individual businesses. This combination of expertise and technology can lead to better financial management.
Scalability and flexibility
As your business grows, your finance and accounting needs will change. Outsourced accounting services allow you to scale up or down based on your current needs.
Whether you need extra support during tax season or expanded services as you enter new markets, the right outsourcing partner can adjust their services to match your evolving requirements.
Better financial reporting and insights
When outsourcing accounting services to a trusted third party, your team will unlock a new level of timely and accurate financial reporting, which helps with strategic planning and decision-making by providing prompt and precise financial data.
Professional accountants can dig deep into your financial data and share valuable insights into your business’s financial health. These insights can inform strategic planning and decision-making, helping you earmark areas for improvement or growth.
Data security and compliance
Reputable outsourced accounting firms invest heavily in robust data security measures to protect their clients’ financial data. They are also up to date with industry regulations and compliance requirements, reducing the risk of errors or breaches that can lead to hefty penalties.
Risk and error mitigation
Outsourcing to experienced accountants can reduce financial errors and fraud. With their expertise and systems, an outsourced accounting firm can implement strong internal controls and regularly audit the accuracy and integrity of your financial records.
In fact, most businesses worry less about errors after outsourcing their accounting functions.
The benefits of outsourcing accounting services are clear — and many. But it’s important to consider potential drawbacks, as well.
Requires collaboration and adjustments
One of the biggest challenges is the initial adjustment period. Going from in-house to outsourced accounting will take time and effort.
You’ll need to transfer knowledge, align processes, and potentially adapt to new systems or workflows. This can be disruptive and may impact efficiency shortly before things settle in — but the right BPO partner knows how to work in tandem with your team and stir up as little dust as possible from the start.
Cross-team communication must be seamless
Communication challenges can arise when working with an external team. Time zones, language barriers, and a lack of face-to-face interaction can sometimes lead to misunderstandings or delays in information exchange.
Many firms have strategies to mitigate these issues, such as dedicated account managers and multiple communication channels, but they need to be managed.
Responsibility and control must be shared
Some businesses may feel they have less control over the day-to-day accounting tasks when outsourcing. When your accounting team is in-house, you have instant access and can make changes or address issues as they arise.
With an outsourced accounting firm, response times may be slightly delayed, and you may feel one step removed from the process. This can be managed by choosing a responsive outsourcing partner and setting up clear communication protocols, but some businesses find this challenging.
That said, it’s rare that a business can’t actually benefit from outsourcing.
In weighing these pros and cons, however, many businesses find that the benefits of outsourcing accounting services outweigh the potential drawbacks. With proper management, challenges can be effectively addressed, allowing businesses to reap the substantial benefits of outsourcing.
How big is your business? And how fast are you growing (or do you want to grow)?
If you want to see “hockey-stick” growth or are already scaling fast, outsourced accounting firms can provide invaluable support.
What are your requirements?
Outsourced experts can provide specialized knowledge if your financial needs are getting more complex (e.g., multiple entities, international operations).
What services or tasks do you want to outsource?
Outsourcing these functions can help you streamline your accounting processes and reduce costs. Growing businesses typically outsource financial reporting, A/P and A/R processes, tax prep, financial analysis, preparation of financial statements, or bookkeeping tasks.
How much are you willing to spend? How much can you save?
Compare the full cost of in-house accounting (salaries, benefits, software, training) with outsourcing quotes.
Can you use the technology in-house, or should you leave the tech to the experts?
Outsourcing firms provide access to advanced accounting software and tools that are too expensive for individual businesses.
What kinds of regulations are you facing?
If you’re in a highly regulated industry or expanding into new markets, relying on accounting firms can ensure you comply with various regulations.
Where do you want to put your focus?
How much time do you and your team spend on accounting tasks versus strategic activities? Most business leaders have more time to focus on their business after outsourcing.
To get a better idea of whether outsourcing your accounting is right for your business, complete this quick self-assessment.
For each question, answer yes or no, scoring one point for each yes.
If you scored anything in the range of 6–10 points, outsourcing accounting services would likely make sense for your business.
Even if only a few of these situations are true for you, you might still consider outsourcing some of your internal accounting team—or at least keep outsourced accounting in mind for future growth.
Once you decide to outsource your accounting, follow these steps to make the transition smooth and successful.
Then, when it’s time to choose among outsourcing partners, look for experience in your industry. You want a firm like Enshored that understands your challenges and requirements and can help you optimize financial performance.
Make sure the firm has certified professionals and a good reputation. The right partner should also use modern, secure technology that integrates with your systems.
Also, remember to choose a partner that can grow with you—one that can provide clear evidence that they’ll be able to scale as you do. Make sure they have clear communication processes and can support you as you grow.
Finally, verify their data security protocols to protect your sensitive financial data.
Outsourcing accounting allows businesses like yours to optimize their financials, reduce costs, and focus on core activities. Start by outsourcing specific functions and expand as you see the benefits. Just remember—a successful outsourcing partnership starts with choosing the right partner, setting clear expectations, and communicating openly throughout the process.
Still, the work is worth it. Outsourcing your accounting services can set your business up for more efficiency, profitability, and growth. And if those benefits are something you’d like to see, we’d love to talk.
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