For ages now, “outsourcing” as a term has carried much stigma around it. There have been debates both for and against outsourcing a business function. While the arguments have been compelling at times on both sides, “outsourcing” somehow remains the preferred mode of business growth. And rightfully so. With all the technological development we as a humanity have beheld, the conviction over “outsourcing” being the right business move has outdone it being a “job killer.” Yet, deciding to outsource the accounting and bookkeeping functions is just the first step in a multifaceted business equation.
From selecting the right partner to outsource your accounting and bookkeeping function to aligning the business goals with the decision to outsource, CFOs have a lot to consider before they onboard “the right” accounting outsourcing partner. Yes, it would be great to have a magic wand to address all the queries and qualms within the organization and in the minds of CFOs and finance leaders, but here it isn’t. Thus, we rely upon the wisdom of business leaders and some critical steps that if taken properly, could be instrumental in shaping up a fruitful accounting and bookkeeping function outsourcing plan. Using our decades of experience working with 100+ global CPA, accounting firms, and enterprises across industries, we at Datamatics Business Solutions Ltd. (DBSL) found these 5 simple steps to be the globetrotter’s guide to kick-start a successful outsourcing plan.
Step 1: Acknowledge the elephant in the room
As a business owner or leader, when you decide to outsource your accounting or bookkeeping function, there are bound to be the drivers of the decision. You need to address/outline those administrative or compliance tasks, which will help you prepare your outsourcing plan more efficiently. Depending upon the size of business or organization you are in, there could be multiple drivers; here we have listed a few to help you get started.
- Lack of expertise in specialized services: Not all CPA firms have the capacity to have a pool of in-house talent to meet the need of specialized services that their client asks. Not to mention how tiresome, time consuming, and expensive it could be to identify the right resource, train them, and get them working on the projects. It could be months before they are ready and before you know it, you already are staring at the glaring deadlines. Outsourcing addresses that issue right from the onset. It gives you access to the expertise and skills that your firm needs.
- Overburdened employees: Often, employees as CPA and accounting firms are overclocking. Adding new employees, as well know, is a painstaking process. But not with outsourcing. It gives you instant access to qualified accounting and bookkeeping professionals to meet your need and help your employees focus on other aspects of business growth.
- Elongated turnaround time: If you are consistently missing your deadlines, irrespective of the cause behind it, it’s a clear indicator that you need to delegate your work to a global workforce, which in turn will make you more efficient.
Step 2: Look for scalability & flexibility
When looking for an outsourcing partner, scalability and flexibility should be your highest priority. It will allow you to leverage your partner’s resources to meet your business needs as and when needed. It also enables immense business growth opportunities as you are not concerned about the additional infrastructure or resources you will need. Besides, always take into consideration the flexibility of the solutions on offer. The solutions should not only be tailored to meet your accounting or compliance requirements, but they should also be flexible enough to accommodate a new business requirement, should it arise in the future.
Step 3: Partner with technology too
Both the worlds of accounting and outsourcing have seen unparalleled technological advancements. It’s about time you make it your partner. Technology has had an enormous impact on outsourced accounting services; with the emergence of AI and Cloud-based technologies, more and more processes are getting automated and streamlined with the business needs. When you partner with an outsourcing service provider, you must ensure that they can help you with the IT and accounting integration such as Cloud migration, automation of manual processes, and more.
Step 4: Safety, as always, is of paramount importance
Since the breakout of the ongoing COVID-19 pandemic, the world of technology has seen multifold growth in cyber-attacks. As much as 43% of those attacks were aimed at small/medium-sized businesses, only 14% of those affected could defend themselves. When hiring an accounting partner, you must pay due diligence to the data security measures they have in place. Ideally, you would want to partner with an ISO/IEC 27001 certified partner with leading cybersecurity and Cloud-based solutions to safeguard your accounting and bookkeeping information.
Step 5: Do your homework
Like with everything, do not forget to check the “Reputation” of your potential outsourcing partner. In the world of outsourced accounting, having positive reviews and satisfied clients is one of the critical indicators of the outsourcing partner’s prowess. Do check for the referrals and client testimonials for your partner; they present an honest picture of the customer service and & operations of the outsourced accounting firm. The internet is a gold mine of information; mine it to good effect and do your homework.
There is no shortage of literature on finding the proper accounting and bookkeeping outsourcing partner. The steps we have listed here are the essence of it all. Depending upon the businesses you own/run, you might need additional measures to streamline your business strategy and formulate your accounting outsourcing plan, but if appropriately done, these 5 steps should suffice most modern business needs. Reach out to us for a detailed discussion with one of our accounting experts to understand your business’s requirements and tailor a solution accordingly.