Does Outsourcing Your Accounting Services Make Sense?

outsourcingBusiness owners have many options when making staffing decisions.  There is a plethora of talent available.  Good people can generally be easy to find.  The bigger challenge often comes with designing the job description, complete with specific tasks and a chain of command that maximizes the efficiency and effectiveness of the organization.

Positions in accounting can be tricky.  If you’re not an accountant, or don’t have much expertise in this area, the lines between CFOs, Controllers, and Bookkeepers can be blurry. Clarity on these roles is always needed.

For the sake of efficiency, small business owners may try to have one person on staff handle this responsibility.

Some owners may also attempt to manage the process on their own. While one or both of these tactics may appear to be the path of least resistance, there are pitfalls that accompany both:

  • The segregation of duties is more challenging, which leaves the business owner and the employee vulnerable.
  • The staff member may be either over their head or bored to tears.  While a talented CFO doesn’t enjoy handling A/P and A/R, a Bookkeeper isn’t capable of providing the financial analytics that every business owner needs.  A Controller may not have the expertise needed to convince the bank to extend a larger line of credit to the business.
  • The business owner who does it all himself is usually taking focus off of more valuable activities which could include sales, research and development, or simply time with family.
  • By the time a business owner recognizes the “one size fits all” strategy doesn’t work for their accounting department, they may already be in trouble.

Outsourced accounting services allow business owners to tap into the exact skillset they need, not more and not less.  Most small businesses don’t require a top notch CFO on a full-time basis. But they do need that CFO when they’re making critical decisions about expansion, buying another business, acquiring financing or making succession plans.

The biggest benefit to working with an outsourced accounting services firm is the ability to scale up or down based on the current needs of the business.  Business owners don’t have to worry about adding a body to the payroll, the expense of benefits, and whether or not there is a long-term need. 

This relationship wth clients can extend from a project to a recurring engagement; all determined by the business’ needs and lifecycle.