We keep hearing and reading about cloud computing in today’s business community. There’s also a growing interest in outsourced accounting. But what do these terms mean? They’re more than just new buzzwords to help you with the infamous buzzword bingo game. Business conditions are changing and successfully outsourcing accounting functions has become a real possibility due to advances in cloud computing technology.
Today’s business owners are juggling complex and time-consuming responsibilities such as finance, accounting, compliance, and risk management in addition to the task of growing their business. Increasingly, large and small businesses are turning to outsourcing as their preferred solution, particularly with certain accounting and finance functions. They’re discovering that outsourcing provides a unique opportunity to deploy talented and experienced professionals at a fraction of the added overhead associated with hiring in-house personnel. Some of the many reasons to outsource accounting and finance functions include:
- F is for Flexibility for Future Growth
In only paying for the accounting functions you need, your outsourced accounting function is scalable. As your business grows, your software needs may change, and the personnel needed to oversee the accounting functions may change as well. Your outsourcing partner can easily re-deploy personnel as needed and modify the technology used to deliver those services. This is much easier than buying new software (a large capital expenditure) and recruiting new in-house personnel (higher cost and time consuming).
- I is for Improved Productivity
With an accounting team in place, the business owner will be relieved of many time-consuming tasks, freeing up time for more productive endeavors like growing the business and realizing their vision. Rather than being bogged down in the day-to-day accounting functions, they can focus on what they set out to do: thrive. All parties involved, accountants and business owner alike, will be able to operate at, to borrow a real estate phrase, their “highest and best use”.
- R is for Reduced Costs
With an outsourced accounting team, you only pay for what you need. Business owners can choose to outsource their entire accounting department or only certain functions. For example, if you have a trusted in-house accountant that is currently handling the bulk of the accounting function but need help with accounts payable, the outsourced accountant can develop a paperless, online solution to complement your current staff. This can be accomplished with a much lower price tag than hiring additional staff. Or, it may be that you have competent accountants on staff to handle payables, receivables and payroll, but need a more seasoned pro to help analyze the data, compile financial statements, help with budgets, and offer more high-level advice. An outsourced CFO can fill that role on a part-time basis, without the business owner incurring the overhead cost of a six-figure salary and benefits.
- M is for Meeting Compliance Requirements
Outsourced professionals are up-to-date on all the regulatory requirements that are relevant to your industry. They will also stay attuned to industry trends and monitor compliance with debt agreements that your company may have. You can have peace of mind in knowing that your accounting tasks are being performed by qualified and knowledgeable experts.
Will outsourcing work for your business? Consider what functions can be outsourced in your environment and which functions can be automated using the latest technology. You may find that you can both save money and achieve higher levels of productivity by outsourcing select functions or with a completely outsourced accounting department.
John R. McCallum, CPA
John R. McCallum is a member with GranthamPoole PLLC and a recognized leader in the field of cost segregation and various real estate taxation matters. He has also written, taught, and spoken on many topics in the area over the years. Please contact John at firstname.lastname@example.org, www.linkedin.com/in/john-mccallum, or 601-499-2400. CPA License # 5323
The above does not represent tax advice. Each situation is fact-dependent, and you should seek the advice of a competent advisor. GranthamPoole PLLC is a provider of tax, accounting, advisory and strategic services, partnering with clients across a broad spectrum of industries and sizes.