Outsourced Accounting a Solution for Increasingly More Small Businesses

Increasingly more small businesses and non-profit organizations are turning to outsourced accounting services as accounting technology becomes more feature-rich and complex. To determine if outsourced accounting is right for you, it’s important to know what’s driving the market.

Cloud services and integration

Wider adoption of cloud services has fueled growth in digital accounting options such as QuickBooks Online, FreshBooks, Xero, Zoom,and other small business-oriented solutions.

At the same time, integration of accounting and bookkeeping functions with these platforms has sparked more demand for cloud-based accounting features such as bank account linkage, automatic payments and merchant services, as well as integrated apps like Square, Bill.com, Expensify, Tsheets, and PayPal.

Explosion of new apps

The explosion in new apps and integration technologies in recent years has been a response to marketplace demand, where businesses and non-profits are looking for solutions to needs that are highly specific to their industries and circumstances.

However, with expanding capabilities and more complex integrated applications, many business and non-profit finance professionals have found they are not familiar with all the platforms and don’t have the time to train, making outsourcing more attractive. Working with professionals who are well-versed in the technology enables them to find customized solutions.

Cost savings

Outsourcing allows many organizations to gain efficiencies and cost savings. If your accounting and bookkeeping can be managed in 16 hours per week, why pay the salary and benefits for a fulltime finance professional?

Outsourcing: first steps

If you’re considering outsourcing some or all your organization’s finance functions, here are a few ideas to consider before going out to the marketplace:

1. Find a provider who is experienced in your space. There are many outsourced finance providers who specialize in nonprofit accounting or accounting for small and medium-sized businesses.
2. Consider which finance functions you want to outsource first. Some organizations start by outsourcing accounts payable and accounts receivable, then move on to more functions.
3. Before hiring an outsourced provider, talk with a few about how they work with clients like you. Some of the questions:

• How will they work with your internal finance staff or with you directly?
• How often will they communicate with you?
• What are their procedures for addressing unforeseen problems?
• What are their billing practices, and how will they handle additional billings that may arise from unexpected issues?
• Will they provide you with a sample monthly report so you can see what you will get?

Long-term benefits of outsourcing

The American Institute of Certified Public Accountants and Bill.com conducted a 2018 survey of 1,700 small and medium-sized businesses that outsource their accounting and bookkeeping functions. Some of their findings:

• 80 percent of organizations that outsource all finance functions report more time to focus on their core business.
• 68 percent report that accounting is easier and more efficient.
• 53 percent report that they worry less about mistakes in their accounting.
• 28 percent report increased profit as a result of better decision making.

If you are considering outsourcing your organization’s accounting and bookkeeping functions, contact us for a consultation.