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Why Outsourcing is a Growth Engine for Accounting Firms?
Most CPA firms usually face one common challenge: ensuring their financials are managed in the same manner as their clients’. Accounting firms know that efficient and accurate ‘accounting and bookkeeping’ is the road to sound financial management and health. But while working hard to meet the expectations of their clients, they at times end up in two situations:
1. They lose track of their firms’ accounting & bookkeeping.
2. They don’t get time to focus on business growth as most of their precious time is spent on the firms’ own accounting.
Missing out on business development opportunities can turn out to be affecting business health. Moreover, neglecting accounting can have a negative impact on your firm’s financial health. If you are also stuck in any of the above-described situations, then there are two ways you can tackle these challenges:
1. You can hire accountants and prepare a team out of them that will handle only your firm’s accounting and bookkeeping.
2. You can outsource your firm’s accounting and bookkeeping to a reputed & reliable accounting outsourcing firm.
Percentage of SMBs that outsource the following accounting functions:
Businesses are reaping multiple benefits by outsourcing some of their accounting processes, it can prove to be beneficial for your CPA firm too, as accounting outsourcing companies usually deliver high-quality services. Many companies also consider it as a strategy to get the work done in a timely and cost-effective manner.
According to René Lacerte, CEO and founder of Bill.com – “Outsourcing helps accounting firms grow their positions as trusted financial advisors, while clients gain the tools they need to be successful – better financial insight, more time and expert guidance toward their goals. With these types of results, it’s not surprising that CAS clients will more often refer their accountants.”
How Outsourcing is a Growth Engine for Accounting Firms?
1. Access to the Latest Technology
Technology is having a positive impact on almost every business sector, and accounting is no exception. For CPA firms, it isn’t very easy to spare money to pay for expensive subscriptions of bookkeeping and accounting software. Moreover, they usually don’t get time to become aware of the latest technological developments and amendments in laws & regulations.
As a result, if they want to invest in technology, they often become skeptical about choosing accounting software. Outsourcing bookkeeping and accounting services to an external service provider would be a big help in this case. Outsourcing companies utilize the latest accounting software and know which ones would be appropriate for which type of business.
You can also choose to outsource some portion of your clients’ accounting requirements at affordable costs and rest assured as their experts will handle the tasks using industry-standard technology, ensuring quick delivery of projects with high accuracy.
2. Better Internal Controls
Outsourcing bookkeeping and accounting to a professional and experienced service provider company allows you to redeploy your in-house accountants to your client’s projects, ensuring quality work is done with the collaboration of multiple CPAs.
This strengthens your firm’s internal controls through proper balances prepared by your outsourcing partner, which also prevents mistakes that might lead to costly consequences such as a fraud. Also, you get an additional team to review your firm and look for red flags in its accounting processes.
3. Bring Value to a Growing CPA Firm
From accounting startups to thriving CPA firms, more and more accounting service providers are turning to outsourcing firms to fulfill their clients’ requirements that they are unable to on their own. With the help of an outsourcing partner, you can improve your tedious and burdensome accounting tasks; this also allows you to focus on business growth.
As firms have recognized that business owners need a lot more than just accounting, some leading firms have started offering financial reporting, financial planning, tax planning, and advisory services with the help of their outsourcing partners.
4. Scalability Options
Outsourcing offers a scalable solution. It eliminates the stress of hiring resources temporarily during the busiest times of the year and staff reduction when there is not much of accounting work. Your outsourcing partner can quickly adapt to your firm’s requirements.
Your partner will already have a team of professional accountants in place. When you outsource accounting services to them, your projects will be assigned to the team. This team will complement your in-house accounting staff to achieve higher work efficiency.
5. Reduced Overhead
Staff, office equipment, software subscriptions, furniture, etc. are already contributing to huge expenditures. In case your CPA firm gets more business – more clients and you realize the need for expanding your team and infrastructure, increment in overhead costs come up as a big challenge in front.
Outsourcing, on the other hand, can be a smarter solution to tackle this challenge. Outsourcing some of your projects to a responsible service provider would help you manage the entire workload efficiently, without expanding your team, buying computers, and moving to another place to have a bigger office space.
6. Increased Operational Efficiency
If your CPA firm is not big enough or unable to afford top-notch technology and infrastructure to increase efficiency in accounting functions, you can outsource some portion of your accounting work such as bookkeeping to a company that provides outstanding bookkeeping services. This way, you can achieve higher efficiency and productivity levels and give tough competition to others in the market.
7. Gain Competitive Advantage
Outsourcing allows you to have the edge over competitors as you can expand your service catalog by offering high-value services to your clients.
For example, your firm is providing one of its clients with AR & AP services, and now the client is looking forward to getting payroll management services too, but you don’t offer it. In such a case, you will be able to make that client happier by accepting their request and outsourcing their payroll management to your outsourcing partner.
Outsourcing helps you deliver the services you don’t offer, but your clients expect. It enables you to take on more clients, more work, more profits, and boost business revenue.
After considering all these advantages of outsourcing, you might decide to join hands with an outsourcing partner that can have your back when needed. However, before you close a deal with a provider, look for the following attributes.
When you compare between providers or evaluate one of them, you must look for the following attributes:
- Software they use
- Their quality control procedures
- Discussion with their existing clients to validate their promises
- Their staffing structure
- Their management team’s knowledge and experience
- Their experience in the outsourcing industry
- Their financial strength
- Their staff’s skills and years of experience
- Their geographic locations
- Turnaround time for the completion of projects
Accounting outsourcing is beneficial for both businesses and CPA firms. The best thing is that it offers more benefits to CPA and accounting firms as they can outsource their own accounting, and in times of heavy workloads, they have the outsourcing partner on their side to support them with multiple accounting and bookkeeping functions. As a result, firms become able to have their accounting on track while fulfilling clients’ unique needs, leading to higher client satisfaction and continuous business growth.
Do you wish to lead your accounting firm towards success? If yes, join hands with Cogneesol and let us take care of your accounting back-office workload. Send us your queries for bookkeeping and accounting outsourcing services at firstname.lastname@example.org or call us at +1 646-688-2821.
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