In a tight labor market, strategic outsourcing can yield benefits for a growing business. In this article, we will present four strategic advantages a business may realize when outsourcing all or part of their accounting function.
What are Outsourced Accounting Services?
Outsourced accounting services are internal accounting functions and tasks that are outsourced to a professional service provider for a fee. These services are provided by one or more professional accountants on a scheduled basis and may be performed remotely or on site at the client office. Examples of commonly outsourced internal accounting functions include financial close and reporting, payroll processing, vendor payment processing, and bank and account reconciliations. If you are looking for more options to strengthen your accounting and reporting, strategic outsourcing may be a great option.
Working with a professional service provider can help ensure your business has access to needed expertise to support and enable business growth and minimize risk. We summarize below what we consider to be four key benefits of accounting outsourcing.
1. Broader Expertise
Working with a professional service provider provides access to not only the expertise of the professional or professionals providing the services but also the accumulated expertise of the firm behind those professionals. This can give your business access to expertise that might otherwise be unavailable to the business. XPECT, for example, serves businesses in a variety of industries and across a range of sizes. In addition, we bring a deep knowledge of accounting standards and practice as well as knowledge of tax rules and regulations. This depth can bring significant benefits to the business.
2. Outside Perspective
An outside perspective can often yield information that is extremely useful for your business. While an internal employee may fear ‘biting the hand that feeds you’, an outsourced accountant will not feel the same pressure to conform and tell management what they want to hear. In addition, an external perspective might yield insight into overlooked areas that have become ingrained into the business culture. This may bring to light aspects of your accounting operations that need further discussion and improvement.
3. Business Process Improvement
One of the key benefits of a strong accounting function is the order accounting brings to the business. The act of defining requirements for transactions, establishing accountability, and implementing oversight processes enables a business to both function more effectively and reduce overall risk. Engaging an outsourced professional service provider may enable a business to more effectively segregate duties and provide an enhanced layer of accounting oversight. In addition, the professional accountant may be more likely to identify areas of weakness in internal controls.
4. Strategic Management Support
An expert outsourced accountant will assist management in optimizing business strategy to balance accounting with other business objectives. This support may come in the form of interpreting financial results, or it may involve data analysis to provide insight on a strategic question or initiative. Clear communication can inform your business decision-making and guide strategy.
Conclusion
If you are considering a partial or complete outsourcing of your accounting function, reach out to XPECT for a consultation. While each business has a unique situation and environment, an outsourced solution can provide many valuable benefits and may be more cost effective.