What is Outsourced Accounting and How Could It Help You?

Managing a business means you are great at something else, whether it’s creating an app, developing rental properties, doing energy consulting, or managing a vineyard. Outsourced financial firms often have a much broader background and deeper level of experience that they can bring to the table. For more information, read our other blog, Comparing the Costs of an In-House Accounting Department vs. Outsourcing.

In an effort to avoid that pitfall, many companies fall into another one. They spend hours doing tutorials, chatting with support representatives, or double-checking their numbers. And every hour spent learning or managing accounting software is an hour not spent on generating revenue directly. If your business is growing steadily or you’re already spread thin, that may be time that you don’t have.

  • When he’s not snuggled up with his two cats enjoying a good book, he can be found painting, skating, or seeing live music around Austin, Texas.
  • Along with offering the typical outsourced bookkeeping services, AccountingDepartment.com provides outsourced controller services.
  • However, you’ll likely pay between $30 and $75 per hour for skilled VAs or those with a particular specialty.
  • Instead, think carefully about the non-core business functions that slow you down and drain the largest portion of your resources.
  • They can either work directly for your clients on a referral basis or through a white-label accounting solution on the back end while you remain on the customer-facing side.

It can be helpful to choose a firm that offers a wide variety of services so you can stick with the same team as your business grows. With many businesses looking for help with tax compliance and audits, firms’ lack of expertise (30%) and their inability to to support requests (31%) proved pressing concerns. Firms have increased prices to compensate for heavier workloads and new regulations.

Attracting and retaining accounting and bookkeeping staff is becoming increasingly arduous. You are the best judge of whether this is the right decision for you, but we say it is. Outsourced accounting services bring a lot of cost efficiencies to the table, will improve business profitability, and free up a lot of time invested in other revenue-generating activities.

Rising costs and a shortage of services make outsourcing difficult for SMBs

With Bookkeeper360, you’ll get a dedicated virtual accountant who sends detailed reports on a monthly basis. Prices start at $500 a month for the Essential plan, which is geared towards startups that use cash-basis accounting. If you use accrual-basis accounting, normal profit definition you’ll need the Growth plan, which starts at $990 a month. And the Executive plan, which is built for larger companies that need CFO services, has custom pricing. Outsourcing your accounting department may not be the right call for every business.

  • Outsourcing can have both benefits and drawbacks, depending on a variety of factors.
  • Be prepared for unexpected events that could disrupt the outsourcing relationship.
  • There’s been an exodus of accountants and auditors over the past two years—the Bureau of Labor and Statistics reports that more than 300,000 professionals have left the field and this trend shows no signs of stopping[1].
  • And every hour spent learning or managing accounting software is an hour not spent on generating revenue directly.

An audit, for instance, used to cost $3,000, and now, it can be as high as $15,000[2]. Browse Capterra’s list of top accounting firms and learn more about the hiring process in our hiring guide. In any organization, the finance and accounting back-office support plays a pivotal role as a bedrock of the financial infrastructure.

In this article, we share some of the most common services accounting firms outsource, reveal the best accounting firms for outsourcing, and provide some questions to help you find the right partner for your firm. Through extensive research and talking with dozens of profitable firm owners, we discovered the top accounting outsourcing partners that thousands of US-based accounting firms work with successfully. Outsourced accounting firms can help you stay organized by implementing best practices and processes to keep your financial and accounting data accurate and up-to-date. This is especially important if you have complex compliance requirements or are expanding into new markets. Several businesses are outsourcing accounting services to fill their company’s needs with the best knowledge and qualifications.

Then, they connect you with a professional from their network with the right expertise for the job. Paro only accepts the top 2% of applicants with 15 years of experience on average to their platform. These individuals can be hired on demand to fill temporary vacancies or partner with you long-term.

Growth Hack: Outsourcing Accounting Services

If you’re losing money on this service, it could be in your best interest to pass on external hiring. However, if you can find accounting or bookkeeping services that can save you time, stress, and overall resources, it could be a perfect fit. Basic, repetitive tasks like accounts payable are increasingly being automated through artificial intelligence, freeing up time for more thoughtful work. When choosing an outsourced accounting firm, look for a progressive firm that “gets” technology and will leverage best-in-class software tools to drive efficiency and user experience.

Pick a local, right size accounting firm

It has become abundantly clear that within financial, tax and accounting firms, there exists a reservoir of exceptionally talented individuals capable of delivering high-margin tax and accounting advisory services. However, these very individuals often find themselves entangled in the time-consuming web of repetitive tasks and low-margin compliance work. The solution to this challenge lies in the realm of financial and accounting outsourcing partnership, which presents a multitude of advantageous possibilities for your growing practice and company. Herein lie some pivotal solutions and advantages that the right outsourcing staffing partner can deliver, offering value and outcomes. If you need a bit more support, Bench also offers outsourced accounting services, including tax prep and tax filing.

Ensure Compliance

Hiring a large accounting firm to cover the full service of all accounts can take a considerable amount from your small company’s net profits. The global business process outsourcing market worth is projected to reach an all-time high of $405.6 billion by 2027. That’s an unfathomable amount of money directed towards outsourcing services. It’s also a good indication that many businesses choose to outsource one or more of their business processes to an outside entity of their own. For instance, a CPA can ensure companies comply with bylaws and regulations, handle conducting an audit, run fraud examinations, and more. A CMA can use their expertise in budgeting and forecasting, performance management, and financial analysis to help handle the financial planning process or to optimize the financial reporting process.

Your HR team can focus on hiring for other departments, instead of worrying about the 300,000 accountants that have walked away from the profession. An outsourced accounting and finance provider will ensure that important tasks such as the ones listed below are executed accurately and on time. Therefore, business owners shouldn’t consider outsourcing if they aren’t willing to spend time finding the right candidate for the role and closely managing and reviewing the work they complete. When small business owners outsource tasks and projects to external workers, they open themselves up to new opportunities, which can aid in company growth and improve customer satisfaction. That’s because outsourcing helps to waste less time on burdensome tasks, allowing business owners to take back control of their schedule and increase their productivity. As with any outsourcing decision, the right time to delegate your accounting tasks to an outside firm depends on your business circumstances, challenges, and budget.

Virtual accounting FAQ

If you’re an entrepreneur, you’ve likely considered how to procure accounting services for your small business. Yes, virtual and outsourced bookkeeping is just as legitimate as in-house bookkeeping and accounting. However, as with any in-person accounting professionals you’d trust with your financial data, you should always verify a bookkeeping firm’s credentials before committing to a monthly plan. The Essential plan ($249 a month if billed annually or $299 billed monthly) focuses on bookkeeping only, giving you access to a dedicated team that performs monthly bookkeeping services.

Several overlapping factors have created a shortage of accounting talent. The American Institute of Certified Public Accountants (AICPA) reports that the CPA pipeline is the weakest it’s been since 2010 and that 75% of today’s public accountants will retire within the next 15 years[2]. Combined with the Great Resignation—where millions of professionals across industries left their jobs—this lack of talent also leads to a lack of expertise as tenured accountants depart the field. To outsource your accounting means to embrace efficiency, expertise, and strategic growth opportunities.

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