Across industries, companies are struggling to build the expertise required to sustain a modern finance team, with 58% of chief financial officers (CFOs) citing a lack of internal knowledge as an obstacle to modernization efforts — and 44% saying their tech professionals lack the necessary finance knowledge — according to Cherry Bekaert’s CFO Survey. To support their businesses and avoid stalling progress, an increasing number of CFOs are turning to outsourced teams, particularly outsourced accounting.
Accurate, timely data is critical to the success of any business, but without daily immersion in bookkeeping, reconciliations and financial reporting, it’s easy to fall behind or feel overwhelmed. Outsourced accounting provides efficient, streamlined financial processes to businesses that face a talent gap, manual processes or outdated platforms. Accounting process outsourcing provides a particular edge for companies pursuing modernization efforts or strategic growth.
Why Companies Outsource Accounting Services
In the outsourced accounting service model, organizations rely on an external team to handle daily transactions, month-end close, payroll, financial reporting and other core tasks. Companies may decide to outsource part or all of their accounting function for a variety of reasons, ranging from reducing overhead costs to accessing specialized finance knowledge or freeing up internal resources.
The rise of advanced automation software is expected to add to popularity of outsourcing, as more companies prefer to gain access to those technologies through a third-party, rather than sourcing it themselves.
The Apple Card Example: When Outsourcing Can Be Advantageous
The Apple Card is one perfect example of how consumer simplicity doesn’t always translate to business efficiency. While purchases are seamless, importing those transactions into QuickBooks Online (QBO) is anything but simple. Without direct integration, businesses must manually download, convert and import statements — a tedious process that risks misclassification and tax errors.
More importantly, businesses risk misclassifying transactions. An iPhone purchase might be a fixed asset, not just a generic “expense.” Get that wrong, and your tax return, financials, and even your business valuation could be impacted.
9 Benefits of Outsourcing Accounting
There are numerous benefits of outsourcing accounting and bookkeeping, each dependent on the unique needs and goals of your business. Below are a few of the most common advantages companies experience.
Guidance From Experienced Professionals
Outsourced accounting allows companies to gain a higher level of financial knowledge and deeper industry insights through a team of diverse professionals, while limiting the high cost of a large in-house team. This is especially true for small or mid-sized businesses that may not have the budget or resources to maintain full-time accounting experts — or those that are forced to combine multiple finance roles into one position.
Many outsourced teams are highly specialized and have worked with a diverse portfolio of clients, providing in-house teams with access to deep industry knowledge and, often, advanced accounting platforms. With this level of accounting guidance, businesses can enhance their decision-making processes and improve financial management.
Lower Operational Expenses
Outsourced accounting can actually help your business save money. With outsourcing, you only pay for the services needed, eliminating expenses associated with the cost of hiring, training and maintaining in-house employees. This flexibility and predictably also helps companies allocate resources more effectively, and scale outsourced services up or down, depending on business need.
Increased Efficiency
Outsourcing daily operations, such as billing or payroll, quickly streamlines workflows and frees up time for core tasks. Outsourced accountants bring fresh eyes to old, repetitive methods and processes. Third-party teams can help optimize financial workflows through automation, manual error reduction and standardization.
Outsourced accounting teams help:
- Set up secure bank connections and automate feeds where possible
- Manage manual downloads for banks that don’t integrate
- Code transactions properly and keep documentation in order
- Deliver reconciled, accurate financials every month.
With relevant, reliable data, companies experience faster monthly closes, cleaner tax prep and more accurate forecasting.
More Time To Focus on Growth
Yes, businesses can do their own accounting, but it takes practice, patience and a lot of time. Even experienced finance professionals can find manual processes exhausting. And every hour spent wrangling statements is an hour pulled away from running the business.
Accounting professionals who perform these tasks daily are familiar with the quirks of each system and can make sure nothing slips through the cracks. This peace of mind enables internal teams to focus more on business operations. In addition to managing day-to-day tasks, outsourced teams can help you develop financial growth strategies and navigate through the obstacles of expansion.
Improved Financial Reporting
Internal accounting teams can be burdened by outdated or incomplete financial records, which negatively impact decision-making. By outsourcing, you gain accurate, updated financial information. As the company grows, comprehensive financial reporting will be nonnegotiable when preparing for future audits.
Cleaner Data
Manual, outdated processes can lead to error-prone records and hinder visibility into a company’s financial health. Outsourced teams use the advanced software and accounting tools needed to produce timely, precise financial data. Clean data allows you to:
- Understand true operating expenses
- Negotiate better terms with vendors
- Track profitability and cost drivers
- Forecast and make growth decisions with confidence
Clean data is also vital for investor reports, internal reviews and tax filings.
The Advantage of Clean Data for AI Tools
QuickBooks Online and other platforms are now deploying AI-driven tools to analyze transactions and provide insights. But AI is only as good as the data it’s given. If your books are filled with vague categories and broad adjustments, the insights will be meaningless. The small details matter, including the vendor name, the category and the timing.
Access to Advanced Technology and Support
Small or mid-sized companies may not be able to afford the same advanced accounting technologies used by outsourcing partners. These platforms automate processes, improves reporting and enhances overall financial management. By outsourcing the accounting function, you are able to access top software without encountering the cost of implementation and training.
With the right tech stack and QBO setup, businesses can unlock enormous gains. Our team has seen 50 to 65% efficiencies gained when new QBO features are properly set up, allowing more analysis and insights instead of just recording transactions.
Stronger Security and Compliance
For some, fraud prevention may be an unexpected benefit of outsourcing. Increased security often occurs during outsourcing as a result of defined responsibilities and collaborating with professionals who are well-versed in cybersecurity. Outsourced teams offer an additional layer of oversight that helps reduce the risk of fraud, errors or embezzlement.
Ability To Scale Solutions
Outsourced teams are equipped to evolve with the changing needs of a company. Services can be scaled up or down based on current needs, providing a tailored level of support. This means businesses receive adequate support whether they need a complex financial model or to soften the blow of turnover when an in-house accountant decides to leave.
How Can Cherry Bekaert Help
Cherry Bekaert’s Outsourced Accounting professionals specialize in modernizing the finance function to help businesses thrive. We offer tailored solutions that include:
- Technology setup and training for your internal team
- Managed accounting services with dedicated consultants available when you need them
- Full-service outsourcing where we handle it all for you
Whether you need support with approvals, reconciliations or reporting, our team can gather and analyze your financial data to drive enhanced decision-making.
Let Cherry Bekaert help you streamline your accounting systems so you can focus on growing your business.
Related Insights
- Article: Outsourced Accounting and CFO Advisory: The New Finance Operations Model
- Article: Value of Outsourced Accounting for Tech Companies At Every Stage of Growth
- Article: How Outsourced Construction Accounting Services Propel Growth-minded Companies
- Podcast: How to Get the Most Out of Your Outsourcing Firm
