How to Get the Most Out of Your Outsourcing Firm

CRAIG HUNTER: Welcome to Cherry Bekaert's GovCon podcast, where we discuss the current environment, government contracting trends, compliance matters, and best practices to guide federal contractors forward.

CRAIG HUNTER: I'm Craig Hunter, our partner here with Cherry Bekaert, and with me today are three members of the Cherry Bekaert Outsourcing and Resource Solutions Group: Managing Director Mike Sipil and Directors Irwin Kaplan and John Reed.

CRAIG HUNTER: Today we will take a look at outsourcing for federal government contractors and getting the most from your outsourcing firm.

CRAIG HUNTER: In the current environment, with the ever-increasing cost and complexity of doing everything in-house, remote work arrangements, talent attraction, and retention, we see more businesses turning to outsourcing in response. What are the key items management or business owners should consider when deciding if outsourcing is a move the company should make? John, I'll turn to you first.

JOHN REED: When organizations outsource their accounting function, one of the major benefits is scalability. The ability of the outsourcing team to contract and expand as the business grows makes it relatively easy to add resources to support new contract setups, employee onboarding, and other tasks that come with growth.

JOHN REED: Outsourcing also reduces the need to hire, train, and manage an internal accounting staff, because those responsibilities fall to the outsourced accounting group. That eliminates much of the HR and hiring red tape.

JOHN REED: Another benefit is access to experts in the GovCon arena. You can tap into deep resources like Mike and Irwin, who bring many years of experience. You also gain access to advanced systems and tools, and people experienced with those systems, so you don't have to manage all the nuances of your ERP.

JOHN REED: Finally, outsourcing can be cost effective. You do not have to provide fringe benefits or maintain a full in-house accounting team; you get a one-stop shop for accounting operations and related functions.

MIKE SIPIL: One additional point is that owners and executives often spend less time on accounting because they have more trust in the outsourcing firm. That allows them to focus on business development and running the company.

JOHN REED: It allows owners to focus on growing the business while leaving the accounting function to the outsourcing group.

CRAIG HUNTER: Assuming a company has considered these factors and made the switch to an outsourced accounting arrangement, what can or should they do to get the most from that relationship? Irwin, can I ask you that one?

IRWIN KAPLAN: The most important thing is to communicate with the outsourced accounting firm. We use a "who does what" form to outline responsibilities, and that evolves over time as staff changes or needs shift.

IRWIN KAPLAN: Keep the relationship evolving as you grow and change. Communication is key for setting parameters, defining how you'll interact with the outsourcing team, and keeping them informed about new contracts, hires, vendors, and other data updates.

IRWIN KAPLAN: Also set expectations for timing. Define when you expect financials, the accounts payable schedule, payroll timing, and how you will communicate with third-party payroll providers and HR. With communication, you can set expectations and plan ahead.

MIKE SIPIL: Proactive communication is essential. We set up a client calendar that lists when we'll deliver financials, the accounts payable schedule, payroll dates, and other tasks. We assign responsibilities to everyone on the engagement so all parties know who is doing what and the expected timeframes.

MIKE SIPIL: If there are delays, communicate the issue and what is needed from the client to stay on schedule. Deadlines are often contingent on receiving timely information from clients; if information is delayed, deliverables may slip.

IRWIN KAPLAN: We schedule meetings and need clients to attend and share what is happening in the organization so we can properly account for and plan for it. We also reach out to let clients know what we're seeing and what we need from them.

MIKE SIPIL: That level of communication helps the outsourcing provider control costs. If we do not have to scramble looking for data, we can focus on the work we were hired to do. Proactive communication allows us to plan, avoid repeated requests for simple items like bank statements, and maintain a successful outsourcing engagement.

CRAIG HUNTER: Thank you, Mike Sipil, Irwin Kaplan, and John Reed.

CRAIG HUNTER: If anyone listening would like to discuss anything further or needs more information, please reach out through our website and we will get back in touch with you.

CRAIG HUNTER: Thank you for listening to this episode of the Cherry Bekaert GovCon podcast series.