As a successful business owner, your time is your most valuable asset, and if you’re spending time on administrative tasks or accounting, you risk losing track of the big picture. Outsourced accounting services handle the numbers so that you can focus on running the rest of your business.
What Is Outsourced Accounting?
Outsourced accounting is when you outsource your organization’s accounting to an outside entity. You can customize the outsourced accounting services you choose based on your business’s needs.
For instance, some people handle the bookkeeping internally, and then, they turn to the pros when they need audits, reviews, or compilations to verify the accuracy of their internal reports. They may also outsource tax return prep and tax planning.
In other cases, you may want to outsource every aspect of your accounting. You may pay someone to enter transactions from your bank and credit card statements into bookkeeping software, generate paychecks for your employees, file sales tax returns, and handle all other business accounting tasks.
Outsourced Accounting vs In-House Accounting
In-house accounting is when you handle your accounting needs internally. You may handle them on your own or pay an employee to do them for you. As your business gets larger, you may have several people devoted to your bookkeeping and accounting.
Outsourced accounting, in contrast, is when you pay someone outside your company to handle your accounting. This can take a range of forms. You may hire a bookkeeper to reconcile your bank statements, generate invoices, pay bills, follow up on accounts receivables, and do payroll, and then, you may hire an accountant to file tax forms and guide tax planning. Or you may simply outsource all of your needs to the same company.
Often, businesses take a blended approach. They handle some bookkeeping and accounting tasks on their own. Then, they outsource others. There is no right or wrong answer. You simply have to discover what works for your needs.
Interested in learning more? Here is a short video on Why a Business Would Need an Outsourced Accountant.
Does My Business Need Outsourced Accounting?
All kinds of businesses can benefit from outsourced accounting. This includes consumer-facing businesses such as retail stores, restaurants, spas, medical clinics, hotels, and service providers. Farms, construction companies, manufacturers and distributors, mining companies, and utility companies can also benefit from outsourced accounting services.
This is not an exhaustive list. Regardless of your industry, you can benefit from outsourced accounting. All business structures can also benefit from accounting services. This includes sole proprietorships, partnerships, LLCs, and corporations. An accountant can also help you determine if you are using the optimal business structure for your situation.
Here are some signs that you may need to outsource your accounting services:
- You’re regularly behind on your bookkeeping or accounting.
- You find yourself skipping other tasks to do bookkeeping or accounting.
- You know you need extra help, but you don’t want to recruit, hire, and train an employee.
- You want a set monthly expense rather than dealing with the varying costs of employees.
- You don’t want to worry about getting behind when employees are sick or on vacation.
- You want expert-level help but you don’t need a full-time in-house professional.
- You’re not sure if you’re taking the best approach to financial planning.
- You want help to reduce corporate taxes.
Often, founders handle the accounting on their own when they first launch, but as your business gets larger, you may need to outsource these services. In many cases, it’s advantageous to outsource your accounting or bookkeeping needs as soon as you launch.
Benefits of Outsourced Accounting
Curious about the potential benefits of outsourcing? Dive into the advantages, and then, read on to determine if outsourcing your accounting needs is the right move for you.
Expert Financial Guidance
When you opt for outsourcing your accounting, you gain entry to a dedicated team of specialized accountants overseen by a CPA. Whether it’s bookkeeping, accounting, reporting, or a tailored mix of services, you have experts with the right skills at your disposal. Outsourcing can be a cost-effective solution, especially if a full-time position isn’t a necessity.
Cost Savings: The Expenses of Recruitment and Additional Staff
Even if a full-time accountant or team is on your radar, the hiring process comes with its own set of time and financial commitments. Crafting a job description, screening applicants, and conducting interviews all demand resources. Onboarding and training add to the expenses, not to mention providing office space, software, and benefits. The overall cost of hiring internally tends to surpass that of outsourcing.
Time Efficiency
Entrusting your accounting to an external provider means securing a skilled accountant to handle transaction entries and generate financial reports for CPA-led tax form filings. As your business expands, so do your accounting needs, necessitating safeguards in financial operations. Outsourced accountants can seamlessly support month-end closings, payroll processing, and timely tax reporting.
Scalability
Scalability is a key advantage of outsourcing. External specialists managing your accounting means you’re not constrained by internal limitations. Your business can grow at any pace without concerns about your accounting team keeping up. Whether it’s handling sales and use tax reporting, bill payments, payroll processes, or tax reporting, outsourcing can adapt to your evolving needs. For more comprehensive outsourced accounting, a controller can offer tax planning, analysis, maintenance of depreciation schedules, and review of financial statements with analytics.
Access to Industry Resources
Collaborating with a third-party provider for your accounting needs grants you access to their resource toolkit. This might involve specialized software that could be cost-prohibitive for an individual purchase. Beyond tangible tools, you tap into intangible resources such as unique knowledge or experience that your business might lack.
Business Strategy Oversight
Outsourcing your accounting isn’t just about basic bookkeeping services. It’s about gaining access to professionals who can actively monitor your business’s financial strategy. Outsourced accountants and controllers can furnish tailored reports for your business and assist in evaluating your structure for optimal tax and profitability outcomes. From reducing corporate taxes to leveraging deductions for minimal tax liability, a professional accountant can guide you through strategic financial decisions.
How to Choose an Outsourced Accounting Service Provider
To find the best partner to handle your outsourced accounting needs, look for a company that provides the services you want. Some companies specialize in high-level accounting services, and by extension, they only provide tax prep, tax planning, and audit and assurance services.
Others provide a whole range of services from bookkeeping to financial statement compilations to tax prep and planning. Draw up a list of the services you want and make sure that companies you consider can meet your needs. If you plan to handle some of the services internally, look for a company that has accountants who can work as a team with your bookkeeper.
Once you find a company that provides the right services, look at their experience and credentials. Do they have a history of customer satisfaction? Do they offer any service guarantees? Then, talk with them about the communication process. How will you share your financial records with them? How and when will they provide you with financial reports? Make sure you’re comfortable with the workflows before signing up for their services.
DHJJ is Here to Help With Your Accounting
When you run a business, you should almost always outsource any tasks that can be handled less expensively and more efficiently by another person.
Don’t let bookkeeping and accounting distract you from the rest of your business. Instead, bring in the pros and ensure it’s done right. This protects your time and your business.
Ready to outsource your accounting? Then, we can help. At DHJJ, we provide comprehensive accounting services that can help you take your business to the next level. With offices in Naperville and St Charles, we service the Greater Chicago area and beyond. Contact us today. Let’s talk about your accounting needs and how our services can help your business.
