How To Overcome Common Accounting Outsourcing Challenges

Outsourcing accounting services can bring numerous benefits to businesses, from overhead cost savings to access to expertise and customized financial services. However, it also comes with its own set of challenges.

From finding the correct provider to vetting talent and implementing strategies against fraud and communication barriers, business owners may encounter common accounting outsourcing challenges along the way.

Fortunately, solutions for these challenges are readily available, enabling you to strategize before getting started with outsourcing. Being aware of how to deal with these potential issues makes outsourced accounting easier for every modern business owner.

This article explores common pitfalls in accounting outsourcing and provides actionable solutions to overcome them. Read on to learn more about these solutions, the rewards of successfully outsourcing accounting, and the best accounting outsourcing service providers available today.

How Does Outsourcing Accounting Work?

Outsourcing accounting involves hiring external experts or firms to handle your company’s financial tasks, such as bookkeeping, financial reporting, tax preparation, and more. 

This can be done through various approaches, including hiring freelancers, partnering with specialized outsourcing firms, or using managed services.

Businesses outsource their accounting functions for a variety of reasons, such as when they lack in-house financial expertise, are undergoing rapid growth, have fluctuating accounting needs, or are aiming to optimize costs.

The Challenges of Outsourcing Accounting and How To Solve Them

Here are some of the hurdles you may encounter when outsourcing accounting processes, along with solutions that will help you overcome them.

Choosing the right outsourcing partner

Choosing a provider that matches your needs can become a tedious and complex task involving multiple hours of research. However, it’s worth spending some time checking if possible outsourcing partners have experience and expertise in your industry and reviewing client feedback or case studies. 

Hopping on discovery calls with a few providers can hasten this process by giving you an opportunity to see how thorough and thoughtful your prospects are.

You can start making a shortlist of some of the most reputable providers out there by looking through our list of top outsourcing accounting companies later in this article.

Vetting accounting talent

Ensuring outsourced accountants have the required skills and qualifications is another common outsourcing challenge. 

Implementing a rigorous screening process that includes background checks, interviews, and technical assessments will help you confirm the competence of accounting professionals. Partnering with a provider like Near that already has a pool of pre-vetted candidates can also save you time in the recruitment process.

Setting clear goals and requirements

Misalignment of expectations between your company and the outsourcing provider can lead to ineffective accounting outsourcing. Defining clear, measurable goals and detailed requirements from the start is key.

During discovery calls, clearly explain your current needs with your accounting outsourcing partner. Regularly reviewing progress, even after onboarding, helps ensure alignment with your primary business objectives.

Lack of standardized processes and KPIs

Inconsistent processes and a lack of key performance indicators (KPIs) can lead to inefficiencies in accounting processes.

Establishing standardized processes and KPIs for monitoring performance allows you and your outsourcing partner to work toward the same goal objectively.

Make sure to regularly review and update these standards to maintain efficiency and effectiveness.

Failure to deliver expected results

One of the major objections to outsourcing financial accounting services is that they might not always meet expectations. Setting realistic expectations and ensuring regular communication and feedback ensures everyone is working toward the same result.

Using performance metrics to monitor and assess the quality of the outsourced work also keeps the outsourcing process grounded and realistic.

Differences in time zones

In outsourcing, time zone differences can affect communication and collaboration. To solve this, establishing overlapping working hours for critical communications and using collaboration tools help facilitate seamless interaction despite time zone differences.

Another option is to choose an outsourcing partner from a nearby location, also called nearshoring. This reduces time zone differences and allows you to benefit from free trade agreements such as the United States-Mexico-Canada Agreement (USMCA).

Language and cultural barriers

When outsourcing accounting to different countries, misunderstandings can arise from language and cultural differences. Choosing providers proficient in your language and cultural awareness will help reduce these predicaments.

Investing in cross-cultural training for your internal teams and outsourced talent will also help build organic and effective communication that helps reduce friction among team members.

Cybersecurity concerns

Due to the rapidly rising number of data breaches in the US, one of the common doubts about accounting outsourcing has to do with maintaining data security and confidentiality.

Implementing robust cybersecurity measures, such as data encryption and secure communication channels, helps reduce or eliminate the potential security risks of outsourcing accounting functions. 

Along with verifying your provider complies with industry standards and regulations, partnering with a provider that is familiar with cybersecurity issues in outsourced accounting can help ensure a successful outsourcing journey.

Budget constraints

Budget constraints can arise from a lack of balance between cost effectiveness and quality of service in accounting outsourcing.

Creating a detailed budget plan when choosing providers will help you identify the best option for your business. When choosing a provider, watch out for hidden costs and other expenses that may arise from outsourcing.

Partnering with a provider that practices transparency in both communication and pricing is imperative to succeed in outsourced accounting. Look for one that can match you with the talent you need for the best price to maximize your return on investment.

The Rewards of Outsourcing Accounting Successfully

Successful outsourced accounting can unlock multiple benefits for many businesses. Here are a few of the most impactful ones.

Enhanced expertise and efficiency

Access to specialized accounting professionals can improve accuracy and efficiency, allowing your business to benefit from advanced financial management practices along with improvements to day-to-day finance operations.

Internal control and fraud protection

According to a recent survey by the Association for Financial Professionals, the recent rise in payments fraud against treasury professionals resulted in 80% of over 500 organizations having their data compromised. This rise in fraudulent activity has increased the demand for enhanced internal control and fraud protection. 

Outsourcing providers implement strict internal controls and fraud prevention measures, enhancing the security and integrity of your financial data.

Tailored and proactive approach

A proactive outsourced accounting partner can offer customized solutions that align with your business needs. They can help you foresee and avoid risks unique to your business and provide regular strategic financial insights and support tailored to your requirements and objectives.

Lower accounting costs

Outsourcing can significantly reduce costs associated with hiring, training, and maintaining an in-house accounting team, providing substantial financial savings. These savings can be redirected toward other initiatives, which can be especially beneficial for SMEs. 

Furthermore, outsourcing accounting to regions outside of the US, like LatAm, can bring significant salary cost savings due to lower costs of living in these areas.

Top 9 Outsourcing Accounting Companies

Selecting the right partner can significantly impact your business’s financial health and operational efficiency and help you avoid accounting outsourcing failures. In no particular order, here are nine top companies that have proven track records in providing exceptional accounting outsourcing services.

1. Near

At Near, we love helping startups and mid-market companies improve their finance functions by helping them hire the best accounting talent from Latin America (LatAm). Our deep expertise in nearshoring reduces many of the common challenges of outsourcing, like ensuring candidate quality and cultural alignment.

Partnering with Near enables businesses to take advantage of our talent pool’s specialized accounting expertise in tax filing, bookkeeping, compliance, and more without the high costs of hiring domestic talent.

2. Deloitte

As one of the “Big Four” accounting firms, Deloitte offers a wide range of comprehensive outsourced accounting and consulting services, covering everything from basic bookkeeping to complex financial analysis.

Deloitte’s global presence and extensive expertise ensure that businesses receive top-tier services that adhere to international standards.

3. PwC (PricewaterhouseCoopers)

PricewaterhouseCoopers is another “Big Four” firm known for its extensive service offerings and global reach. It provides tailored solutions, including financial statement preparation, internal audit, and tax compliance, to meet the specific needs of businesses across various industries.

PwC’s industry-specific knowledge and innovative solutions help companies navigate complex financial landscapes effectively.

4. Ernst & Young (EY)

Ernst & Young offers a robust suite of outsourced accounting services that help improve business performance and ensure compliance with regulatory standards. The firm’s emphasis on digital transformation provides businesses with efficient and accurate financial solutions.

5. AccountingDepartment

AccountingDepartment has experience providing comprehensive outsourced accounting services to small to mid-sized businesses. Its dedicated team of experienced accountants provides accurate and timely financial support.

The firm’s services include bookkeeping, payroll, tax preparation, and financial reporting, all designed to help businesses maintain financial accuracy and regulatory compliance.

6. BDO

BDO is a global network of public accounting firms providing professional services in audit, tax, and advisory. It offers tailored services to meet the unique needs of each client.

BDO’s commitment to building strong client relationships and delivering personalized accounting solutions makes it stand out in the accounting outsourcing industry.

7. Grant Thornton

Grant Thornton is known for providing dynamic accounting services that help businesses grow and achieve their financial goals. It offers a broad range of services, including audit and assurance, tax services, and advisory services, with a focus on middle-market businesses.

Grant Thornton’s expertise in the middle market and its innovative approach to solving financial challenges make it a top choice for businesses.

8. RSM

RSM Global is a leading provider of audit, tax, and consulting services focused on the middle market. It helps businesses improve their financial operations and achieve compliance with industry regulations.

RSM’s deep industry insights and tailored services for audit and assurance, tax compliance, consulting services, and risk advisory help its clients navigate financial complexities and achieve sustainable growth.

9. Paro

Paro enables businesses to tap into a network of highly vetted financial professionals who provide on-demand accounting and finance services. The company’s flexible model allows businesses to scale their financial support as needed.

Paro offers bookkeeping services, CFO services, financial analysis, and tax support. Its platform matches companies with the right financial experts to meet their specific needs, ensuring high-quality financial management.

Final Thoughts

Outsourcing accounting services can provide a much-needed strategic advantage to businesses across industries—but not without presenting its own set of challenges. These can, however, be effectively managed with the right strategies and solutions. 

By choosing a reliable outsourced provider and setting clear expectations, you can reap the rewards of enhanced efficiency, expertise, and cost reductions.

If you’re planning to outsource your accounting with fewer challenges and more success, Near can help you find the best finance talent from LatAm. Book your free consultation call today to discover our comprehensive solution to outsourcing your financial processes.