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Should You Outsource Your Accounting & Finance Function to a Specialized Firm?

Kelly Kunz
Kelly Kunz Senior Accountant, Outsourced Accounting & Finance Services
Michelle Gray
Michelle Gray Senior Accountant, Outsourced Accounting & Finance Services

Should You Outsource Your Accounting & Finance Function to a Specialized Firm?

Every company owner shares the same goals of wanting to grow their business and increase revenue.

Unfortunately, some business owners can spend countless hours analyzing accounting transactions rather than focusing on what is most important: running your business.

One potential solution to this problem is to outsource your company’s accounting and finance function.

What exactly is “outsourced accounting?”

Outsourcing your business’s accounting needs involves working with a team of external accounting professionals that maintains your company’s financials continually, taking care of both simple and complex transactions.

An outsourced accounting and finance provider will ensure that important tasks such as the ones listed below are executed accurately and on time.

Important daily or weekly tasks include:

  • Categorizing transactions
  • Matching expenses to receipts
  • Keeping track of vendor bills
  • Recording customer invoices
  • Tracking payments received
  • Posting payroll journal entries

Tasks that should be addressed on a monthly or quarterly basis include:

  • Reconciling bank and loan accounts
  • Maintaining schedules for prepaid and accrued expenses
  • Reviewing recent transactions
  • Reviewing old accounts receivable
  • Reviewing outstanding checks
  • Tracking W9s for 1099s vendors
  • Preparing and reviewing financial statements and KPIs

This is a long list of tasks to ensure your financials stay in good shape — not to mention — are a huge time commitment. Thankfully, hiring an accounting firm can drastically lower that time commitment and offer a one-stop shop for all of your business accounting needs, including reconciliations of bank accounts, accounts receivable, prepaid expenses, accounts payable, fixed assets, and more.

The service eliminates the need for an internal accounting team, allowing owners and executives to focus more on their business and less on sitting down after a hard day’s work to update the financial transactions from that day.

Financials are a necessary evil in any business, but knowing that they are continually being updated by a team of experts provides you with the opportunity to focus your time and resources on your company’s strategic objectives.

Is outsourcing your accounting ideal for your business?

A few questions to ask yourself:

  • Are you finding it more difficult to find qualified accounting professionals to hire?
  • Do you find that your new hires don’t understand your business and how the financial process works?
  • Are you spending more time focusing on accounting transactions than investing time in your business?
  • Are you worried that your financials are incorrect and would you like help understanding and correcting them?

If you answered yes to any of these questions, outsourced accounting may be the right fit for your business.

Pros and cons of outsourcing your finance and accounting departments

Outsourcing your accounting department can provide various benefits, including cost savings by not needing to hire and develop staff, reduced risk of turnover, timely and accurate financials, higher level of expertise to avoid costly mistakes, advice on areas that may need improvement, and perhaps most importantly, saving time to focus on why you started your company in the first place. After all, you didn’t get into your business to do accounting.

In addition, external accounting practices usually have the most updated and relevant technology stack to automate manual tasks, provide optimal service for your business financials, and offer easy access to your financial data for insight into how your business is doing.

Pro: More time for strategic activities

Many owners find their most experienced people are too deeply involved in recording the company’s day-to-day transactions. While the time spent on these tasks may not seem like a lot of time initially, it can increase significantly as the business grows. By outsourcing accounting functions, owners and senior management are now free to focus on more strategic business issues such as acquiring new customers, expanding products or services, or developing the next generation of leaders.

Pro: More accurate and timely data

Financial information is only as good as the quality of the supporting people and processes. Outsourcing to a highly-qualified accounting and financial firm using gives owners greater confidence in the accuracy of the business reporting. In addition, business owners often find that getting accounting data from a firm rather than in-house production results in more timely delivery of financial reports.

Con: Your business may benefit more from a full-time equivalent (FTE)

At some point in a business’s life cycle, there may come a time when full-time personnel start to make more sense, such as when increases in business complexity result in substantial increases in the complexity of business reporting.

Pro: Higher-level talent at a lower cost

Outsourced financial firms often have a much broader background and deeper level of experience that they can bring to the table. Since the outsourced function is usually only needed on a part-time basis, a business owner is able to tap that firm’s expertise and get a higher level of insight into their company, relative to the cost of having a less experienced person on staff full-time. For more information, read our other blog, Comparing the Costs of an In-House Accounting Department vs. Outsourcing.

Pro: Outsourced accounting and finance services often come with flexible options

Finally, owners have a range of options available to them when considering an outsourced solution — from a fully outsourced department to a hybrid approach involving the use of low-cost, full-time staff augmented by external professionals.  By tailoring an approach to fit the unique needs of your business, you can drive improvements in timeliness, quality, and cost, while also gaining access to experienced business advisors.

Con: Outsourcing is not one-size-fits-all

Outsourcing your accounting department may not be the right call for every business. Specialized industries with niche requirements may be better off having dedicated employees who can be trained on the specific needs of the company.

Learn more about all the reasons business owners are outsourcing back-office accounting functions.

Outsourced Accounting with Kreischer Miller

Understanding where your money is going is a big part of ensuring your business is headed in the right direction. Not only does an outsourced accounting service provide regular bookkeeping and in-depth reviews by trained professionals, but it also provides significant peace of mind when considering the future of your business. Managing a business means you are great at something else, whether it’s creating an app, developing rental properties, doing energy consulting, or managing a vineyard.

It’s never too late to regain control of your time and let the accountants handle the financials.

Learn more about Kreischer Miller’s outsourced accounting and finance services and read this case study to see how our team of experts can help.

Contact the Authors

Should You Outsource Your Accounting & Finance Function to a Specialized Firm?

Kelly Kunz

Senior Accountant, Outsourced Accounting & Finance Services

Should You Outsource Your Accounting & Finance Function to a Specialized Firm?

Michelle Gray

Senior Accountant, Outsourced Accounting & Finance Services

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We invite you to connect with us to discuss your needs and learn more about the Kreischer Miller difference.
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