What is Outsourced Accounting? 8 Questions Business Owners Have About Switching to Outsourced Accounting

Many business owners find out that once they expand and start adding employees, providing benefits, or exploring tax credits, things get a lot more complicated and they need a professional to handle their accounting needs.

But how do you decide whether to hire a full-time accountant or work with a firm to outsource your accounting needs? Spoor Bunch Franz is an accounting firm that specializes in helping local businesses through outsourced accounting, and we have answers to the questions business owners have as they make this critical decision.

What is outsourced accounting?

Outsourced accounting is when you have an outside party perform part or all of your accounting functions. It can be tailored to your business needs, and it might include bookkeeping, payroll, invoicing, accounts payable, reporting, and advisory services.

What advantages does outsourced accounting offer?

• With outsourced accounting, you get timely financial information. Outsourced accounting is performed in real time, so you avoid the delays associated with typical financial reporting. This can help you make crucial decisions and avoid missing opportunities.
• Outsourced accounting can free up business owners to work on other aspects of their business if the owner is no longer responsible for performing accounting functions.
• It can save money. Outsourcing accounting can be less expensive than hiring someone in a full-time or part-time accounting role, especially once you consider recruiting, onboarding, and benefits.
• It gives you access to a team of accountants with a wide range of knowledge and experience. Becoming an outsourced accounting client means you have access to a team that can advise you based on your business’ full financial picture.
• The technology used in outsourced accounting is constantly changing, and an outsource partner should have such access to tools like online access to reporting, direct deposit for payroll, and electronic payments to vendors.
• Outsourced accounting can help you with cash flow management. For example, startups are often on a very tight budget and constantly chasing cash. Outsourced accounting can lift that burden so the entrepreneur can focus on the business.

Is outsourced accounting cost-effective?

Though every situation is different, we find that outsourced accounting usually costs less than hiring an internal accountant, CFO, or accounting department. It may also help you save money in the long run by providing the reporting and advice your business needs.

Is outsourced accounting secure?

A business owner considering outsourced accounting should verify that the firm is prioritizing security and is up to date with the latest procedures, especially with so many people working from home. For example, our firm has a secure portal to transfer information to and from clients, and every online program we use has security protections in place. We limit any online access to clients’ bank accounts and credit card accounts to read-only access. Also, our staff undergoes regular security training regarding safeguarding information, email, and passwords. Make sure you are choosing an accounting firm that you trust is taking precautions to keep your information safe.

Does the business owner have to leave their current tax accountant?

No, not necessarily. Our firm can work with a client’s current tax accountant, auditor, financial advisor, etc. It is up to the discretion of the business owner.

With outsourced accounting, do business owners give up control?

Outsourced accounting actually gives business owners more control over their business. When they spend less time performing accounting functions, outsourced accounting gives them more time to work on their business. For example, outsourced accounting may give them custom reporting showing what products are most profitable or what types of customers to target. This new information will ultimately give them more control over the direction and growth of their business.

How does a business owner get started with outsourced accounting?

Determine which accounting functions will work best to outsource and what everyone’s role will be. For any new outsourced accounting client, we discuss processes — who handles each step of the process, what approval processes should be in place, and what information everyone needs.

How should a business owner choose a firm for outsourced accounting?

Choose a firm you trust and that has the same goals and objectives as you do. Finding a firm that has experience in your industry or with a specific software your company uses may also be a consideration. During the pandemic, it’s become more popular for firms and individual accountants to start doing outsourced accounting, but there’s more to the practice of outsourced accounting than payroll. Business owners will benefit most if they choose a firm that has the experience and the knowledge to help their business grow and thrive.

To learn more about outsourced accounting through Spoor Bunch Franz, and to explore whether it might work for your business, visit sbfcpa.com.