Outsourcing isn’t a new business process management strategy; although it is getting more prominent worldwide after the recent pandemic and its aftereffects, this model existed-for-decades has been benefiting businesses across industries.
Way before it became common, Retail, Manufacturing, IT, Finance and Accounting (F&A), and some other industries have been outsourcing for various reasons, mainly cost savings, scaling opportunities, access to a pool of specialized professionals/talent. And this is not specific for a few types of businesses; during any phase of your business growth, you must have realized the need for these three, among other notable factors.
While outsourcing can be a great medium for obtaining desired results, a lot depends upon who you choose as your outsourcing partner. But before you learn how to choose one, let’s discuss why you may outsource accounting services, to begin with, for taking the advantages discussed.
Accounting outsourcing from a business owner’s point of view
While the fact is that accounting is one of the most commonly outsourced services, business owners still try to handle it on their own. This mostly leaves them in the middle of nowhere as soon as it becomes challenging to manage core operations and accounting functions simultaneously.
At this point, a partnership with a reliable firm for accounting outsourcing services can help improve overall business management, and you will start to realize that multitasking does not remain a problem anymore.
Considering the several advantages involved, let’s discuss some crucial factors you need to consider before choosing your accounting outsourcing partner.
Factors to consider while hiring an outsourced accounting team:
When you first contact a service provider and inquire about them, observe closely if they are willing to share enough information for you to assess their reliability. Note that a competent provider will not hesitate before showing you certifications, technology partners, staff density, and any capabilities they possess.
The next thing that needs be transparent is their project management process. Again, you must collect key information about how they will examine your requirements, comprehend your business processes, and determine the scope of services they can provide.
Timely delivery of services
Considering the tedious nature of the accounting workflow, the timeliness of services is a big differentiator defining who should choose as your partner. Suppose a vendor fails to meet deadlines; they are not only increasing backlog but also adding bottlenecks to a lot of crucial financial processes of your business such as reporting, forecasting, budgeting, etc.
Low TAT in accounting functions can arise problems you might have never thought of; you don’t want to make last-minute changes to your tax files because of inaccurate or delayed financial statements.
Hence, make sure to clear all your queries related to service delivery times well in advance. If you sense any lack, it would be better to look for other vendors.
Clear communication & minimal supervision
Clear and consistent communication is foremost in any partnership. Therefore, choose a partner who promises to keep you updated about project progressions across phases, to be precise, end-to-end reporting. For example, you should get a shared platform for reports or a point of contact for smooth communication and less confusion.
It is obvious that your partner service provider will manage your accounting requirements while meeting your expectations without needing you to supervise their work. A reliable vendor will require minimal supervision, enabling you to get more time for core business activities and growth strategies.
Leaders’ experience & company background
You want to know who’s leading the team that will be working for you. First, find out if your partner company has the right professional background according to your needs. For example, you are outsourcing accounting services, you might prefer choosing a firm led by experienced CPAs.
To assess the company’s background, look for information on their website or request for their portfolio. Consider choosing an accounting service provider with experience working for businesses same or similar to your business model.
Professional expertise & technology exposure
It is essential to do a thorough evaluation of your outsourcing partner’s pool of resources. Evaluating their skill set and competency will help you understand their expertise or specialty, making it easier to determine whether they are fit for your requirements or not.
Additionally, as accounting requires way more than just someone crunching numbers fast, it would be great if the firm is familiar with the latest software, preferably the ones you are using. Know that you can get the best out of your accounting software subscription if you have people knowing its best utilization. All such factors are must be considered before closing the service deal.
Adaptability & scaling opportunities
Timely service delivery is fine, but what if your state government proposes additional financial reporting rules tomorrow? Will your partner firm be able to respond quickly?
Think about the future, too; as your business grows in the years to come, your accounting requirements will also increase. Adding to that, considering the increasing number of guidelines for finance sectors, your partner should be able to adapt to amendments, new rules, and your requirements.
You may consider a firm that keeps a sharp eye on the ins and outs of the accounting world and has a workforce ready to catch up with your growing demands.
Know who you work with, check their reviews, and find if they are in their clients’ good books. No firm can afford to lose on quality and deadlines because these are linked to their reputation in the market. An old firm well-known for excellent services can be more reliable than a new, tech-driven company with less market exposure and experience.
Hence, it is advised to check if they are someone on market research papers or look for business review websites that provide authentic information, allowing you to get an idea of if your partnership would be beneficial or not.
This is one of the biggest reasons why businesses choose to outsource accounting.
You may start with calculating your current cost of bookkeeping and accounting, then compare it with accounting outsourcing costs. You might be surprised to find that you can save a lot in various areas.
With outsourcing, you need to run the costly recruitment, purchase computer systems, expand office space, buy new desks and monthly salaries. All you need is a reliable, experienced partner with reasonable service charges to optimize your entire accounting process.
Considering this series of advantages, there’s no doubt why companies take accounting outsourcing as a smart business choice that can bring efficiency, accountability, and cost savings. You may also obtain the same by joining hands with a firm you can count on.
At Accounting To Taxes, we can assure you that you can count on us for your financial accounting needs. Through our cutting-edge, customizable services, we deploy specialized talent with a deep understanding of various accounting software for client projects. As we keep your business accounting streamlined with complete transparency and minimal supervision of yours, get more time for core business operations and growth.