Are you struggling to grow your business but don’t have exactly the skills your team needs?
Don’t worry! Outsourcing companies are here to help. They are experts with years of experience who will oversee your accounts and, at the same time, empower you with their knowledge, expertise, and skills. Outsourcing your accounts department is an excellent solution for those growing businesses who want to increase profitability without hiring full-time employees.
To help you get started, this guide covers the most important aspects of outsourcing your accounts department.
Better business is more manageable with outsourcing
Nowadays, with so many ways to grow your business online, it seems everyone has it easy. Start an online store, and then just sit back and relax. However, for some businesses, this isn’t so simple. Some companies are working hard to get things off the ground. To succeed in this ever-changing world, you need different skills than companies had twenty years ago. This is what Mike Savage saw when he started 1-800 Accountancy, a small accountancy firm that provides a high level of service to its clients. This isn’t the only venture he has started you can learn more about Michael Savage of New Canaan, his love of muscle cars, and the Savage Rivera Foundation.
Savage started the company in 2015, quickly becoming one of the largest accountancy service providers.
“From the start, I realized that many businesses have different requirements. Some simply need the basic accounting work to be done, while others want a more comprehensive service. Many of them had small teams of people working very hard, and they just needed someone to help them out with their business administration and books. So this is how I established 1-800 Accountancy as a unique business that offers a tailored service to clients based on their needs,” Savage said.
Outsourcing accounts is handy because businesses get the proper support for their business needs without hiring full-time employees or freelancers.
Choosing outsourcing partners
When choosing an outsourcing partner, you should follow a few simple rules:
- Don’t hire a company without checking the reviews of its services and clients. Many outsourcing companies have proven their expertise by working with high-profile businesses, which means that you can also have this level of experience. You can check reviews on platforms such as G2 Crowd or Clutch or ask around at business networking events.
- The outsourcing company should be appropriately accredited and insured. Check to see if the company has certified public accountants (CPAs) and is part of an industry association such as the American Institute of Certified Public Accountants (AICPA) or the National Association of Accountants (NAA). A reputable service provider should have these accreditations.
- Never pick a company that only wants to get paid as soon as possible. Look for companies that work on a fixed-fee basis or with an invoice. The best service providers work on a range of projects. This gives you the flexibility to manage your workload and provides your company with great value.
- Be cautious of firms that claim they can do everything more efficiently than you can. Although it might be tempting not to hire a consultant when you run your business, this is not necessarily the right decision. Don’t just pick any consultant; find someone that offers specific skills in which your company needs help.
What makes outsourcing great is its many benefits to your business. You can use outsourcing in the following ways:
- Saving time and money – With their expert knowledge, experienced accountants can help you quickly complete your financial reports and tax returns. Lower costs and saving time are the main benefits of outsourcing your finances to a specialized company. Hiring full-time employees and freelancers also means that you have additional office space and equipment expenses, plus additional payroll fees for tax purposes, which you will save when outsourcing your accounts to an accredited service provider.
- Working with the right people – Outsourcing your accounts department to an experienced and reputable service provider means that you can work with skilled accountants who will help you grow. This is especially important because accountancy is a specialized profession that requires different skills, knowledge, and experience.
- Access to competent support – Once you have hired outsourcers, they can provide advice and guidance. When outsourcing your financial reports, tax returns, and other accounting documents, you depend on trained accountants who follow a standardized approach to accounting activities. This increases efficiency and decreases the risk of missing some crucial information or leaving out essential details.
Managing the outsourced teams
When you are outsourcing your accounts, it is crucial that the service provider understands your business goals and works accordingly. Your relationship with the outsourcer should be mutually beneficial and long-lasting.
Here are some tips for managing this relationship:
- Start small. When working with an outsourcing company, it’s often best to start small. If they provide excellent services, then this can lead to a more extensive partnership in the future.
- Expect a learning curve. When working with outsourcers, it’s normal to experience some minor problems at first. Don’t forget that outsourcing is a new process, and the service provider is also getting to know your business. So have patience with them as they learn more about your business and operations.
- Develop communication methods. You should develop ways that both you and the outsourcer can communicate effectively.
- Don’t forget performance monitoring. Look for a company that offers regular progress reports so you can stay on top of things with your accountants and solve any potential issues sooner rather than later.
Write a clear scope of work
It’s essential to define the goals and deliverables of your outsourcing partnership before you begin. Here are some questions to help you with this:
- What is the most important for your company?
- What are your goals? Do you want to outsource all work or just specific parts?
- What is the time frame for this work? Will it be a one-time thing or do you have a long-term agreement with your service provider?
- What exactly are each party’s responsibilities and compensation arrangements in the case of success, failure, or other issues?
- What does your business need today? – This can be broken down into several detailed sub-categories. For example, if your business needs day-to-day accounting services, what should be included in each category?
Answering these questions will help you define the scope of work for your outsourcer and make sure that you have covered all of the essential areas.
Outsourcing accounts is a great way to solve a variety of problems and improve efficiency in your company. It can save money, give a boost to profits, and help you increase the number of clients and revenues.
Schedule regular supplier reviews
A supplier review is one way to ensure that you get the best possible service from an outsourcing company.
- Schedule regular meetings with your outsourcer. Communication is key, and it will help you ensure that the company is doing what they are supposed to do promptly and that they are fulfilling their obligations as adequately as possible.
- Make sure you understand how the outsourcer’s financial reports fit into your overall plan for the year. These reports should be produced on time for tax filing purposes and your internal financial reports. If any issues arise, be sure to communicate them with the outsourcer upfront so they can be resolved before any problems arise in future reports.
- Review changes to the outsourcing team on these calls to ensure you are getting the best possible service.
- Make sure that you are hearing changes in pricing, work scope, and procedures that will affect your business.
- Share your concerns with the outsourcer and find ways to resolve them so you can keep working together.
- Ask for regular progress reports and confirm that you are getting what you need to perform your business efficiently
Communicate with internal stakeholders
Outsourcing a department, like accounts, to an external service provider is not complete with just hiring a new team. You need to keep your team on board too. For example, if hiring a new CFO or In-House Controller, you must ensure they know how to work with external accountancy firms, and if any issues arise, this will be the place for the change to be made. You need to keep your in-house teams engaged and communicated with, as they will be the face of the business. You can’t outsource everything; you need your in-house staff to support you when relationships get tricky, or new issues arise.
The most significant risk of this approach is that once you have chosen a service provider, you must be absolutely sure they are invested in your company’s success. The point is, if they don’t do their job right, then it’s on you. This means that even if they mess up with something small, it could affect your entire business.
For this reason, the decision is not to be taken lightly. Also, outsourcing accountancy is only applicable for certain businesses. For example, outsourcing might be the right choice for you if you run a small business with a few employees and don’t work in multiple locations. If your business is big and has a lot of different departments functioning at once, it might be best to keep things in-house.