Covid-19 may be to blame for speeding up the outsourcing trend, but the transition to a non-traditional workforce had begun well before the onset of this virus. First, it became common for the employee sitting next to you at work to have been with the company for only a few years compared to thirty years. Then it became common for that desk chair to be empty, with the employee working from home. Now it is becoming increasingly common for there to be no employee at all, but instead an outsourced professional at the helm.
In the 2018 Global Outsourcing Survey, Deloitte found that companies are embracing outsourcing more now than ever before, but for a different reason. Cost savings, once a popular driver, dropped out of the top five reasons.
Company leaders are now realizing that outsourcing can help them “deliver competitive advantage by transforming the way” they “operate, and making them more agile, efficient, and effective.” This realization is seen in that 84% of companies surveyed are either discussing or have implemented some type of outsourced solution.
If you’re like most executive leaders you’re looking to improve performance (62% of respondents), reduce errors (53%), streamline existing processes (52%), gain access to new technology ideas and innovation (51%), and lower costs (44%). Outsourced accounting is uniquely able to provide value in all of the above-mentioned areas.
By hiring an outside accounting professional you have the option to select someone with a proven track record for success. You can hire a professional who isn’t just an accountant, but one that specializes in what your business needs at any particular moment in time whether that be assistance with tax issues, mergers, streamlining processes, or improving your internal reporting package.
Much for the same reasons as with improved performance, working with an outsourced accounting team will result in fewer errors. Outsourced accountants are up to date in their industry and can harness all available resources and technology to ensure there are as few manual processes as possible. Data entry will be a thing of the past. With no doubt experience in many companies similar to yours, an outsourced accountant will know the pitfalls and common areas of misstep and be able to pay close attention to those.
Process improvement is the number one consulting service provided by Szweda Consulting, a bookkeeping service for small businesses. From experience with many similar companies, an outside accounting firm will know best practices, typical workflows, and be able to review your current processes with the goal of making them more efficient and designing them to safeguard against abuse. Going through a process improvement consulting project results in time saved, money saved, and generally increases employee buy-in and satisfaction.
Outside accounting firms have opportunities to test new software and interact with even more software among their various clients. This helps them determine which technology works best, which technologies integrate best together, and allows them to make recommendations that will meet your needs. You now can receive innovative advice from an accountant partner instead of a tech company salesperson who isn’t an accountant or business owner. An accountant can also think ahead to the needs of your business is likely to have in the future, and anticipate how different technologies will meet those future needs.
As an added benefit you get to cut your operating costs. This is beneficial to a small business as they can access a CFO level professional at a fraction of the cost. Many small businesses, especially seasonal operations, cannot afford to pay a $150,000+ salary, but engaging in a pay for what you use scheme is feasible. Even if you could foot the bill, outsourcing a function saves the company money in the areas of employer payroll taxes, worker’s compensation insurance, and benefit packages.
There are many company departments that can be outsourced whole or in part. IT always tops the list, but HR and procurement are other popular areas able to be outsourced, not to mention accounting.
Of the over 500 companies surveyed by Deloitte, of those that had already outsourced back of house functions, 77% were satisfied with outsourcing their tax work and 81% were satisfied with outsourcing the entire finance function. Right now we’re offering FREE consultations to new callers. For help with this or any other accounting matters, reach out to us at(216) 509-1561 for the best consulting and bookkeeping services.