Accounting outsourcing: The new key to accounting success

Blog | August 2, 2022

Reading time: 6 min
When it comes to outsourcing accounting, there are a few key things you need to know to make the most informed decision for your business.

As the business world evolves, so do finance and accounting trends. In order to stay ahead of the curve, more and more businesses are turning to accounting outsourcing.

Accounting outsourcing involves hiring an outside firm to handle all or part of your company's accounting and finance functions. This includes bookkeeping and invoicing to tax preparation and financial reporting.

This growing trend is driven by several factors, including the need for businesses to be more agile and the increasing complexity of financial regulations. Outsourcing also provides many advantages for businesses, including access to specialized expertise, cost savings and increased efficiency.

It’s no wonder, then, that accounting outsourcing is becoming the new key to success in the finance industry.

Below, we’ll discuss the benefits of accounting outsourcing and how outsourcing accounting can help your business succeed.

What is outsourced accounting?

When most people hear the term "outsourcing," they think of call centers and manufacturing plants in far-off countries. But outsourcing can also refer to hiring someone outside of your company to handle certain tasks, such as accounting. 

So what does it mean to outsource your accounting? 

Essentially, accounting outsourcing means that you're entrusting your financial information to a third party - usually an accounting firm or an individual accountant. This can include bookkeeping, tax preparation and even auditing. Outsourcing accounting can also provide access to a wider range of expertise than most companies could afford to maintain in-house.

While outsourcing accounting eliminates the need for in-house staff, choosing a provider you can trust is crucial. Look for a company with experience handling the finances of businesses in your industry, and be sure to read reviews before making your decision. Take the time to compare different providers and find one that's a good fit for your business. With the right provider, you can enjoy the benefits of improved cash management and peace of mind.

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What are the advantages and disadvantages of outsourcing the bookkeeping functions of the business?

When it comes to outsourcing the bookkeeping functions of your business, there are both advantages and disadvantages to consider. 

Let’s start with the advantages:

  1. First, outsourcing can save you money. You don't have to pay someone a full-time salary and benefits when you outsource bookkeeping. You simply pay for the services you need when you need them. 
  2. Second, outsourcing can free up your time to focus on more important tasks. When you outsource bookkeeping, you don't have to worry about keeping track of receipts and invoices
  3. Third, outsourcing can help you get access to expert help. Outsourced accounting allows you to get help from accountants who are up-to-date on the latest tax laws and regulations. 

Now let's look at the disadvantages of outsourcing bookkeeping:

  1. First, outsourcing can create communication problems. When you outsource bookkeeping, getting timely information about your finances can be difficult. 
  2. Second, outsourcing can create security risks. When you outsource bookkeeping, you trust someone outside your company with sensitive financial information. 
  3. Third, outsourcing can be disruptive to your business. You may have to train new employees on your financial software and systems when you outsource bookkeeping.
the new key to accounting success advantages and disadvantages graphic

Before you decide to outsource bookkeeping, be sure to weigh the advantages and disadvantages. Consider your needs and budget, and make the best decision for your business.

What are the five strategies for outsourcing accounting?

If you're like most business owners, you're always looking for ways to cut costs and improve efficiency. One way to do this is to outsource certain tasks or projects. 

But what exactly is outsourcing? And what are the best strategies for doing it?

When it comes to outsourcing, there are five key strategies that businesses should keep in mind: cost reduction, risk reduction, resource optimization, process improvement and quality enhancement:

Cost reduction

Cost reduction is often the primary goal of outsourcing, as it can help to lower overall operating expenses. By outsourcing accounting functions, you can save on the costs associated with hiring and training internal staff and the costs of maintaining expensive accounting software. 

Risk reduction

Risk reduction is another important consideration, as it can help to protect against potential disruptions to the business. By outsourcing, you can avoid the risks associated with internal staff handling sensitive financial information. In addition, outsourcing can help to protect against potential disruptions to the business, such as turnover or unexpected absences.

Resource optimization

Resource optimization is another key strategy, as it can help to ensure that limited resources are used more effectively. When you outsource accounting functions, you free up internal resources that can be better used elsewhere. In addition, by outsourcing, you can avoid investing in expensive accounting software and hardware.

Process improvement

Process improvement is another important consideration, as it can help to streamline processes and improve overall efficiency. When businesses outsource accounting functions, they can often achieve greater efficiency and effectiveness. In addition, outsourcing can help to streamline processes and improve overall quality.

Quality enhancement

Finally, quality enhancement is an important goal of outsourcing, as it can help improve the overall quality of the products and services provided.; By outsourcing, you can often achieve better quality control. In addition, outsourcing can help ensure that the products and services provided meet the highest standards.

the new key to accounting success strategies graphic

How can you find the right accounting outsourcing partner for your company’s needs, and what should you look for in a provider?

When it comes to outsourcing your company's accounting needs, you'll want to find a partner that is the perfect fit for your business. 

But how can you tell if a potential provider is right for you? 

Here are a few things to look for:

  1. First, ask yourself what your company's specific needs are. Do you need help with bookkeeping, tax preparation or both? Once you know what services you need, you can narrow your search.
  2. Next, take a close look at the providers you're considering. Check out their websites and read customer reviews. Make sure they have experience serving companies in your industry and that they offer the specific services you're looking for.
  3. Finally, don't be afraid to ask around. Talk to other businesses in your area and see who they use for their accounting needs. Getting a personal recommendation can be a great way to find a provider you can trust.

By following these simple tips, you can be sure to find an outsourcing partner that's a perfect match for your company's needs.

What are some of the most common myths about accounting outsourcing that businesses still believe to be true?

It's no secret that outsourcing has become increasingly popular in recent years as businesses look for ways to cut costs and improve efficiency. 

However, when it comes to accounting outsourcing, there are still a lot of misconceptions floating around. 

Here are just a few of the most common myths about accounting outsourcing that businesses still believe to be true:

Myth 1

Outsourcing accounting is too expensive. Outsourcing can save businesses money in the long run by freeing up time and resources that can be reinvested in other business areas.

Myth 2

Outsourcing accounting is more risky than beneficial. When done correctly, outsourcing can actually help to mitigate risk by providing access to expertise and best practices that might otherwise be lacking internally.

Myth 3

Outsourcing accounting means giving up control. While it's true that businesses will need to relinquish some control when they outsource, they will still retain ultimate decision-making power over critical areas like financial reporting and compliance.

By debunking these myths, we hope to show that accounting outsourcing can be a valuable tool for any business. When used correctly, outsourcing accounting can save you time and money while reducing risk and improving overall quality.

the new key to accounting success myths graphic

Reduce costs and manual work with an experienced AR automation software partner

As businesses grow, many find that outsourcing certain tasks can be a helpful way to save time and money. Accounting is one area where outsourcing can be particularly beneficial. By working with an experienced outsourcing partner, you can free up time and resources that can be better spent on other areas of the business. In addition, outsourcing can help you to reduce costs and improve efficiency.