The Benefits of Outsourced Accounting

Businesses are increasingly turning to outsourced accounting services as they begin to recognize the many benefits to their organization. Business leaders can now access an educated, qualified team of outsourced accounting experts to help their company run better, grow faster, and increase revenue. Virtually all types of businesses can leverage outsourced accounting benefits. Small and medium-sized enterprises (SMEs) often lack the resources for a full-time finance department. Growing businesses can scale their financial operations without hiring new staff. Even larger corporations benefit from specialized expertise or by outsourcing specific functions. Compared to establishing an internal accounting department, outsourcing accounting often yields significant cost savings. However, cost is only the tip of the iceberg when it comes to understanding the benefits of an outsourced accounting team and why more businesses are increasingly utilizing these services.

What Financial and Accounting Tasks Can Be Outsourced?

When it comes to outsourced accounting services, you might be surprised by just how many tasks can be handled by experienced professionals outside your organization. Here are some of the most common services businesses delegate:

• Bookkeeping: Keeping your ledgers up-to-date, reconciling bank statements, and ensuring your books balance at the end of every month.
• Payroll Processing: Managing employee wages, ensuring compliance with tax regulations, and issuing paychecks promptly.
• Accounts Payable and Receivable: Monitoring incoming payments, handling outgoing bills, and staying on top of your cash flow.
• Financial Reporting: Generating regular financial statements, such as profit and loss reports, balance sheets, and cash flow analyses.
• Tax Preparation and Filing: Navigating local and federal tax codes to prepare accurate returns and meet filing deadlines (think TurboTax or ADP for reference).
• Budgeting and Forecasting: Assisting with the creation and analysis of budgets, as well as providing insights into future financial trends.

Some firms, like Windes, offer higher-level services, such as Fractional CFO or Fractional Controller support, as well as strategic financial planning and analysis. By outsourcing these functions, companies can ensure their finances stay organized and compliant without the headache of managing every detail in-house.

Why Companies Outsource

Working with an outsourced accounting services team is primarily motivated by cost reductions, a desire to focus on core business tasks, and the need to address capacity constraints. The four key outsourcing trends are:

1. Cost-cutting: This is at the top of the priority list for most businesses. Industry leaders argue that cost reduction is a secondary benefit. Goals such as enhancing agility or improving the quality of service are primary.
2. Cloud and robotic process automation (RPA): Cloud and RPA technologies enable users to automate any process via a web-based interface, becoming increasingly important in nearly all types of transactions for businesses of all sizes.
3. Underpowered supplier management: Successful businesses invest more in developing their supplier management capabilities through RPA and outsourcing to get the most out of their service provider ecosystem.
4. Agility: Changing business conditions, visa limitations, and higher client demands are forcing businesses to become more adaptable. Outsourcing will continue to accelerate as companies learn to operate in a world where speed, quality, flexibility, and affordability are more essential than geographical location.

Bottom line: Outsourcing services can lead to significant improvements and enhance business outcomes.

Key Benefits of Outsourced Accounting

Cost-Effectiveness

Hiring a reputable firm like Windes, which offers outsourced accounting services, is typically less expensive and more cost-effective than hiring in-house financial experts. Businesses can avoid the overhead costs of hiring an employee, such as paid time off, health insurance premiums, retirement contributions, paid vacation and sick days, and workers’ compensation. Accounting tools are necessary for any accounting professional to complete their job. Purchasing and maintaining specific equipment and software for your in-house personnel can be costly. These expenses are reduced by outsourcing.

Enhanced Data Access and Security

One of the standout advantages of outsourced accounting is the robust data access and improved security measures available through advanced cloud-based technologies. Top outsourced providers leverage industry-leading platforms like QuickBooks Online, Xero, and Sage Intacct to offer clients real-time access to their financial data, from anywhere and on any device. This means business leaders no longer need to rely on manually shared spreadsheets or files that are easily lost or compromised. Additionally, security is dramatically strengthened. Reliable outsourced accounting firms employ stringent protocols, including multi-factor authentication, encrypted data transfer, and bank-level security. Modern accounting systems enable customized permissions, allowing each team member or stakeholder to access only the information they genuinely need. An automatic audit trail also records every change, making the entire system more transparent and reducing the risk of unauthorized activity or error. With these layers of protection and accessibility, businesses can operate with confidence, knowing their sensitive financial information is both readily available and shielded from unnecessary risk.

Automation

Even if your organization chooses to keep accounting functions internal, embracing automation offers a wealth of transformative advantages. By integrating advanced technologies and refining processes, businesses can significantly enhance their in-house accounting operations. Cloud and robotic process automation (RPA) are prime examples. Key benefits include:

• Time and cost efficiency: Automating routine tasks, such as invoicing, reconciliations, and financial reporting, drastically reduces manual workload, streamlines operations, and minimizes errors.
• Enhanced data visibility and security: Automation provides real-time access to financial information, strengthening controls and safeguarding sensitive data to facilitate informed decision-making.
•  Clearer financial insight: With up-to-date, accurate numbers always at hand, companies gain deeper visibility into their financial health, empowering leadership to identify trends and opportunities.
• Improved financial planning: Automated analytics and forecasting tools support strategic planning, allowing businesses to set targets and anticipate challenges with greater confidence.
• Greater adaptability: As the market landscape evolves, automation helps companies quickly adjust by speeding up month-end closes and improving reaction times to regulatory or business changes.

Ultimately, incorporating automation enables businesses to achieve a higher standard of efficiency, agility, and security within their accounting functions.

Highly Trained Team

Another advantage of having an outsourced accounting team is that they are highly trained accounting professionals who can identify and address red flags and discrepancies before they become issues. Understanding potential problems with expenditures and cash flow can help leadership make sound financial decisions.

Reduced Fraud & Errors

Errors and fraud can occur in small to medium-sized companies with only one person in charge of accounting. It is easy to overlook erroneous calculations or intentionally tamper with the books. Fictitious expenses can go unnoticed for months, if not years, without proper oversight. With outsourced accounting services, trained accountants review your transaction processing and reports, increasing internal controls. A committed team of accounting specialists is significantly more likely to notice an abnormality than a single person or a small in-house accounting team who may not be up-to-date with the latest regulations or technology to adequately and efficiently position your business for growth.

Choosing an Outsourced Accounting Service Provider

Selecting the right provider requires careful consideration and evaluation. Look for firms with industry-specific experience, strong references, and transparent pricing. Evaluate their technological capabilities and communication protocols. Ensure they offer scalable services that can grow with your business. Good outsourced providers act as an extension of your team, executing tasks and providing reports based on your directives. You receive regular financial statements and performance metrics, allowing you to effectively monitor and guide your financial operations.

Outsourced Accounting Costs

The cost of outsourced accounting services varies based on several factors. These include the volume of transactions, the complexity of services required, and the provider’s experience. Most firms offer tiered pricing models or customized quotes after assessing your specific needs. While prices vary, the cost savings often outweigh the expense of an in-house department.

Look to Windes Advisory Services for Your Outsourced Accounting Needs

At Windes, our Outsourced Accounting Services augment your staff, enhance your finance function, and provide a platform to drive profits, improve cash flow, and grow your business. It’s not just about keeping your business accounts in order; it’s about having a team of trusted experts on your side. Let Windes focus on your financials so you can focus on your business.Get started today.