Outsourcing. We read about it everywhere. Outsourced customer service, human resources, help desk, accounting and more. We are going to focus on accounting in this edition. Outsourced accounting has its benefits and, to some, drawbacks. On the positive side, it allows an organization numerous benefits:
- Reduced FTE: In an environment where FTE (full time equivalents) are critical, it allows an organization to achieve a function without hiring.
- Cost saving: In lieu of hiring a bookkeeper or accountant, incurring salary costs plus the ever-rising cost of benefits, you simply pay an invoice from the outsourcing partner. Overtime is typically a non-issue and you avoid costly healthcare expenses. No need for an office or related supplies. Cost savings can be directed towards activities that drive revenue.
- Availability: While the rest of the nation experiences the “war on talent”, your organization can rest assured your accounting functions will be completed without the need for interviewing and pre-employment testing. Let’s face it, it is a tight employment market with unemployment at a low. To make it even tougher, unemployment in the accounting field has remained low even when the other segments increase. Outsourcing lets your organization eliminate those concerns.
- Talent Upgrade: By outsourcing your accounting function, you typically get access to a very experienced, knowledgeable and personable accountant. Often, these experts would require salaries outside the budget. By outsourcing, you share those costs with other organizations.
- Internal Controls/Fraud Reduction: Small businesses typically struggle with internal controls as they usually lack the staff to completely segregate duties as recommended. Outsourcing allows for those controls which, in turn, reduces the likelihood of fraud.
The most significant drawback is access. If the organization’s leadership tends to micromanage, outsourcing can cause some angst. There is no office to stop in. While this is appealing to many, it can be a concern for others.
The Phoenix Group approaches outsourcing a bit different than most. We offer a variety of options and customize each solution to the specific client. For example, one option allows for a bookkeeper to perform the traditional tasks but also offers a monthly meeting with an experienced CFO to discuss strategy and risk management. We also have the ability to utilize the client’s software or our own. There is no “one size fits all” solution. If you have been considering outsourcing as an option, let’s meet! We would love to help guide you even if you opt not to outsource to us.