If outsourced accounting was a perfect solution, every company would do it. That being said, a lot of companies avoid outsourcing for reasons that seem logical on the surface. When you look at what outsourcing accounting actually entails, however, those arguments against quickly fall apart. We have outlined four below, highlighting the perception versus the reality:
Working with outsourcing firms sounds expensive, and in some cases it is. Small companies with limited budgets may dismiss it out of the belief that it would be fiscally irresponsible to outsource, even if it would be advantageous to have extra accounting assistance. In truth, outsourcing is often much less expensive than the alternative – hiring full- or part-time staff or expensive consultants. Plus, the cost is predictable and manageable, making it easy to budget for. As with all business investments, the cost is well justified if it delivers a larger ROI.
Some companies conclude they’re too small to need outsourcing, or that their accounting team is already firing on all cylinders. However, both of those are ultimately arguments in favor of outsourcing. Small companies with limited resources must focus everything they have on the core objectives. Outsourcing routine or labor-intensive accounting workloads frees up financial minds to think about more important aspects of the business. The situation is similar on exceptional accounting teams. Why waste their talent on basics like payroll when they could be focused on business performance and strategy instead?
Relying on outsiders to handle some or all aspects of accounting produces an understandable amount of anxiety. Accountants worry they will have to give up control of workflows or access to data. Worse, they worry that everyone is going to get fired, or that accounting will get thrown into turmoil by working alongside an off-site team. Good outsourcing firms understand these concerns and work hard to make their service accessible and seamless to integrate. In all cases, it’s meant to be a complement to the accounting department’s goals, not a replacement for what already works.
Opposite the previous point, companies may write off outsourcing because their accounting needs are presumably too widespread, complex, or specialized for any outsourcing firm to satisfy. Once again, good firms go out of their way to accommodate the client’s needs. That means building diverse rosters of accounting talent who can provide broad and deep accounting assistance perfectly matched to the client’s requirements. Far from being incomplete, great outsourced accounting is like having exactly what you need on-demand.
Outsourcing is a big decision, and not one to be made lightly. Don’t make up your mind until you get more information from people who know the reality of outsourcing. Contact CDH for a free consultation about your needs and our services.