Is It Time to Outsource Finance and Accounting?
By Tracey F. Martin, CPA, Partner
Ben Hunter’s June blog post You Can’t Outsource Accountability focused on outsourcing of a company’s IT function, one of the many outsourcing areas that companies are exploring to improve effectiveness and reduce costs. Another continuing and evolving trend is the outsourcing of finance and accounting. Google “outsourced accounting” these days and you will find hundreds of companies that will tell you exactly why you should outsource and exactly why you should choose their services! Deloitte’s Global Outsourcing Surveys over the last six years have seen significant changes in opinion and perception of outsourced services. What was once seen simply as a cost-cutting measure is now viewed as a way to maintain and improve competitive advantage, allowing business owners to focus on what they do best: running their businesses.
When considering whether outsourcing finance and accounting is right for you, ask yourself these questions:
- Are my internal company financial reports complete, timely and accurate? Am I receiving the information I need to make the best strategic decisions for my company?
- Are my company internal controls adequate? Are the same employees responsible for writing checks, paying vendor invoices, handling payroll and reconciling bank accounts? No one wants to think that they are at risk for employee embezzlement, but unfortunately statistics show otherwise.
- Are employee costs associated with my company’s internal accounting department affordable, and am I able to recruit and retain talent?
If the answer to one or more of these questions is no, it may be time to consider your outsourcing options. At this point, you are to the Google phase of the process. How do you determine which company is best for your specific outsourcing needs? A well-designed request for proposal (RFP) will include questions such as:
- What is the average number of years of experience for staff members?
- Do staff members maintain certifications with annual training requirements?
- Does the company rely on offshore teams?
- What type of security measures are in place to protect your data?
- How is pricing determined and what is (and isn’t) covered under service agreements?
- Is the company large enough to accommodate your expected growth?
- Does the company have experience in your industry and are industry references available?
While you can’t outsource accountability (even within finance and accounting), given the right partner, outsourcing all or a portion of your accounting and finance tasks is an option that may be worth considering.
Tracey Flynn Martin Partner, CPA
Tracey has over 30 years of experience as a CPA and is a tax and consulting partner in our Winston-Salem office. She applies her knowledge and practical ideas to meet the needs of firm clients from both a business and tax perspective. Tracey leads our Firm’s CAS service line (Client Accounting Solutions – a […]