Managing the accounting function and financial reporting in a small or medium-sized business is an enormous undertaking for a growing team. Outsourcing your accounting needs gives you expert-level financial service and support to achieve your business goals.
When you identify the need for a partner in your financial department and begin the accounting outsourcing process, your business agrees to let a team of trusted experts come in and help you evaluate everything you currently do. Doing this can maximize your company’s potential whether you’re in a growth or transition period.
What does an outsourced accounting team do?
The experts you outsource should help you define, develop, and achieve your business goals. To begin that process, some firms will assess your current situation. For instance, we like to review four major pillars of your business which are your people, processes, technology, and reporting.
We’ll also take some time to outline your business goals. If you haven’t gone through this process before, a good financial expert can help guide you through various Q&A sessions with the company stakeholders.
From there, it’s essential you bring all of those elements together and design not only a roadmap for improving your accounting function, processes, and financial reporting but ensure that the right metrics, analysis, and KPIs are developed in relationship to the overall business goals. Whether that be raising capital, improving profitability, scenario planning, or managing hypergrowth. This is really bridging the gap between the day-to-day and the big picture stuff.
The onboarding approach your outsourced accountants use may include:
- Structuring goal development and building a roadmap
- Validating your information and process optimization
- Structuring your financial reporting and conducting deep analysis
- Managing the day-to-day accounting function
- Focusing on business advisory & forward-looking activities
Structuring your company’s financial and overall business goals is an essential first step in creating alignment between your business and your outsourced experts.
Goal development and building a roadmap to achieve them
Although your outsourced experts are accounting and financial gurus, they are new to your business even if they have previous industry experience. To develop business goals, they’ll start by reviewing and understanding your business by doing an assessment.
This may be looking into your:
- Business goals and major drivers
- Current business concerns
- Immediate needs and priorities
With the combined industry and business knowledge under your outsourced team’s belt, they can begin gathering information and validating your current processes.
Understanding your information and processes
One of the advantages of accounting experts at your business is evaluating all of your current accounting processes and your financial reporting (including accuracy and consistency), so you and your team don’t have to think about it. Additionally, this allows a new team to come in and see things from a fresh, unbiased perspective and make an impact.
The reason they do this is to:
- Understand your team’s roles, current capabilities and skills, and development goals
- Review and validate your existing information and structure
- Perform data clean up to ensure historical accuracy
- Validate processes, make recommendations for optimization, and implementing new ones where needed
- Refine how they integrate with your existing team and where they need to fill the gaps
After this evaluation, the experts can seamlessly integrate into your company, your current team structure and are then able to set a foundation for accurate, relevant, and timely reporting.
Delivering sound financial reports and analysis
Now that your business leaders have had an opportunity to build trust with the experts and have reviewed their recommendations, the next step is to give you the information you need to make sound financial decisions.
That information is typically provided in the form of:
- Expense management
- P&L statements
- Accounts receivables and payables
- Cash flow management and reporting
- Month-end closing
- Financial metrics, reporting, and KPIs
- Business and financial analysis
- Board meeting support
Not only will your outsourced experts provide the above reports regularly, but they may also take this reporting one step further by providing business modeling and deeper financial analysis to help you reach your business goals.
This reporting may include:
- Utilization analysis
- Breakeven analysis
- Margin analysis
- Client profitability
- Annual budgeting & benchmark reporting
- Business-specific metrics & KPIs
With this measurable data provided consistently, you will create additional value by taking actionable steps to improve your business.
Supporting your day-to-day needs
Not only do your outsourced experts help you achieve your financial business goals, but they also support your day-to-day accounting and financial operations.
Some of that support includes:
- Payroll processing
- Manage A/R and A/P
- Month-end close
- Workflow documentation
- Staff mentoring and supervision
- Inventory process development and setup
- Bank and credit card reconciliations
Whatever daily accounting operations help your business desires, your outsourced experts are there to ensure everything is getting done on time and there’s a clear delegation of duties and responsibilities, so you don’t have to.
Why would you need to outsource?
Outsourcing your accounting may be a need because of:
- rapid company growth
- cashflow has become a challenge
- you’re not getting the reporting you need
- you may have just lost a valuable member(s) of your financial department
- you’re not quite ready to take on the financial risk of employing a full-time accountant
- you’re having issues getting financial backing from a bank or investor
These are all valid reasons. Whatever the case is, enabling expert accounting, financial, and advisory help in your business – takes some of this burden off your plate. This team truly partners with you and your business leaders so you can focus on other areas of your business.
It’s a classic case of allowing you to start working on your business again instead of working in it.
Outsourcing for growth
As your revenue increase, so do your daily business demands. As a result, your financial needs or the complexities of your finances will also increase. When you’re scaling your business, it’s often helpful to outsource specific back-office operations, such as your finance and accounting department.
Doing so allows you to hire a team of consultants who specialize in going beyond the numbers and meet your growth needs. As a result, this may include implementing new processes, reporting methods, or technology to match your scaling business needs.
Outsourcing due to turnover
When a prominent part of your financial team, like a senior accountant, controller, or CFO, leaves your business, it can be challenging to fill their shoes immediately, and doing their work on top of your own in the interim could lead to burnout.
Additionally, hiring a replacement may not solve the issues that ultimately led to them leaving the company. Many common reasons we see:
- they feel unsupported by management and have no career path
- they tend to have too much on their plates and are feeling burned out
- they are constantly burdened by either doing too low level or work or even too high-level beyond their skillset
By outsourcing, you’re able to fill these gaps with vetted experts who are in the right role because financial experts hired them.
Even if these employees haven’t left your company, we’re able to come in and provide supplemental support, oversight, training, and career path development for your team.
And as you grow, you may eventually need to hire more in-house employees full-time, and your outsource team will still be to support the onboarding or transition of duties when necessary.
Outsourcing because you desire flexibility
If your accounting needs are becoming more complex, you might find yourself spending a lot of time managing them, taking away from other parts of your business. You may also feel uneasy about taking on the financial risk of building out a finance team or are unsure if it’s the right time to do so or who you should hire next.
By outsourcing to a team of experts, you gain the same benefits of having a full finance and accounting team that you usually see are a larger company; however, you pay for fractional support instead of paying for full-time salaries.
And as the business grows or contracts, so can the flexibility of your team. The model is designed to work for your business based on its needs, unlike a full-time staff or staffing agency.
If your business needs accounting and financial expertise and could use a trusted partner as an advisor, consider outsourcing an ideal solution.
Over the years, we’ve worked with several types and sizes of businesses and have seen so much success using this model – that, in many cases, we’ve made lasting relationships as a result.
Contact us for a free consultation and to learn more about outsourcing.
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