12 Accounting Outsourcing Mistakes and How To Avoid Them

Outsourcing accounting is a strategy that can help businesses of all sizes. It allows you to focus on core activities while leveraging the expertise of specialized accounting firms or freelancers and saving money on labor costs. 

But despite its obvious benefits, outsourcing accounting functions isn’t without its pitfalls. Companies often encounter challenges that can lead to costly mistakes, process inefficiencies, and compliance issues. 

This article will explore 12 common accounting outsourcing mistakes and provide guidance on how to steer clear of them. We’ve also curated a list of eight companies that can help you minimize outsourced accounting failures thanks to their successful track records and thorough screening processes. 

12 Common Accounting Outsourcing Mistakes and How To Avoid Them

It’s easy to overlook certain details when dealing with the complexities of outsourced accounting. Here’s a look at 12 common mistakes, along with practical advice on how to avoid them. 

1. Not defining outsourcing goals

One fundamental error businesses make is jumping into outsourcing without clear goals. This can lead to misaligned expectations and disappointment. Clearly outline what you hope to achieve, like:

• Cost reductions
• Access to specialized knowledge or skills
• Freeing up internal resources

Communicate these objectives to potential accounting outsourcing partners at the beginning of the relationship. 

2. Letting the outsourcing company dictate your needs

Remember that you’re the one leading the partnership. Don’t let an outsourcing company decide which accounting services you need or design a contract that benefits them more than you. Maintain control over your accounting requirements and ensure the outsourcing arrangement aligns with your specific objectives. 

3. Not thoroughly screening the outsourcing company

Failing to thoroughly screen the outsourcing company you partner with can result in poor service quality and compliance issues. To avoid this, conduct a comprehensive evaluation of potential partners. Check their credentials, client references, and reviews, ensuring they have experience in your industry and can meet your needs. 

4. Opting for the lowest-cost solutions without considering other factors

Choosing the cheapest option can be tempting but often leads to subpar service. Paying a little bit more can secure access to specialized expertise, cutting-edge technology, and customer service. Balancing cost with quality will ensure you get the best value for your investment. 

5. Not prioritizing cultural fit

Remote workers still interact with your team daily, and ignoring cultural fit can lead to communication issues and misunderstandings. According to one survey of US managers, 91% of respondents believe that cultural fit is as important or even more so than skills and experience.

Nearshore outsourcing to a nearby country can help connect you with professionals with similar values—and it isn’t as complicated as you may think.

6. Failing to onboard outsourced accounting professionals

Even if outsourced accountants are experts in their field, they still need to understand your business. Skipping the virtual onboarding process can result in confusion and inefficiency. 

Treat the outsourced accounting team or freelancer as an extension of your own in-house staff, and provide comprehensive training, access to necessary resources, and clear guidelines. 

7. Not communicating expectations

A common error is failing to clearly communicate your expectations, assuming the outsourcing partner will deliver everything you need. Create a service-level agreement (SLA) that lists:

• Expectations
• Deliverables
• Timelines

Explicitly discuss how the outsourcing relationship will work and document everything from the beginning of the relationship. 

8. Not communicating regularly with the vendor

Infrequent communication can result in a disconnect between your business and the outsourcing partner. Establish communication channels and a regular check-in schedule to update and discuss progress, address concerns and issues, and realign business goals as necessary. 

Consistent, effective communication helps maintain a strong working relationship. 

9. Not providing constructive feedback

Detailed feedback is the best way to make sure both parties are on the same page. Most workers who receive meaningful feedback also believe they are fully engaged.

On the other hand, neglecting to provide it can hinder the outsourcing partner’s ability to improve. If you don’t like something about their work, offer regular, specific, and actionable feedback. 

10. Lacking standardized systems and performance metrics

Without standardized systems and performance metrics, it’s challenging to measure the success of your outsourcing efforts and maintain consistency. Agree on key performance indicators (KPIs) to evaluate regularly, ensuring accountability and helping identify areas of improvement. 

11. Not getting your in-house team and clients on board

Failing to secure buy-in from your in-house team and clients can create resistance to the outsourcing initiative. Before starting a new partnership, communicate the benefits of outsourcing and involve key stakeholders in the transition process. 

12. Not fully integrating the outsourced team members into your company

Treating outsourced accountants as separate entities can limit their effectiveness. Try to fully integrate them into your company by:

• Including them in relevant meetings
• Providing access to necessary resources
• Encouraging open communication with your internal staff

Integrating outsourced accountants into your team will help create a cohesive environment with everyone working toward common goals. 

Top 8 Companies To Partner With To Minimize Accounting Outsourcing Mistakes

Choosing the right partner is the biggest factor in avoiding accounting outsourcing mistakes. We’ve compiled a list of eight potential providers that can help, including both specialized accounting outsourcing firms and recruitment agencies with extensive experience helping companies hire qualified professional accountants. 

The list is in no particular order, as each company has a proven track record and is well equipped to help you navigate the complexities of accounting outsourcing. 

1. Near

Yep, that’s us! At Near, we’ve developed a strong pipeline of Latin American accounting professionals with Big Four experience and expertise in various industries.

We can help you source, screen, interview, hire, and onboard accountants far faster than traditional methods, ensuring you get financial help when you need it most. 

Just ask Northstar, an accounting and CFO firm in California that was having trouble scaling their team with US-based talent. All of the top candidates were being snatched up by big firms, so they partnered with us to hire an offshore bookkeeper. 

The outsourcing process was so rewarding that Northstar came back for 11 more hires, saving over $250,000 in annual salaries. 

2. Deloitte

If you’re looking to minimize outsourced accounting mistakes, the Big Four is a great place to start. Deloitte leads off this quartet as a global leader in professional services, including bookkeeping, financial reporting, payroll, and tax compliance. 

With extensive accounting industry experience, near-endless resources, and advanced technology, Deloitte can help businesses streamline their accounting processes, reduce costs, and enhance operational efficiency. 

3. PwC

Next is PricewaterhouseCoopers (PwC), another member of the Big 4 and a comprehensive accounting and advisory service provider. Its outsourcing solutions cover everything from financial statement preparation and management reporting to tax filing and payroll processing. 

PwC experts work closely with clients to tailor services for specific business needs, ensuring compliance and promoting financial health.

4. KPMG

The third musketeer is KPMG (Klynveld Peat Marwick Goerdeler), a global accounting firm that can improve financial performance and operational efficiency through varied services. It offers accounts payable/receivable management, financial reporting, tax compliance, and more. 

5. Ernst & Young

The last member of the Big 4 is Ernst & Young (EY), an innovative accounting firm that focuses on leveraging advanced analytics and technologies to provide clients with insightful, strategic financial management solutions. Its dedicated teams ensure your accounting is efficient and compliant with regulatory requirements. 

6. BDO USA

Beyond the four giants above are other excellent accounting outsourcing options, including BDO USA, a top firm providing a comprehensive range of expert services. 

BDO specializes in helping businesses of all sizes, from startups to large enterprises, streamline their accounting processes, improve compliance, and reduce operational costs. The accounting company is known for its personalized approach and extensive industry expertise.

7. Moss Adams

Moss Adams is a well-respected accounting, consulting, and wealth management firm providing a wide array of outsourcing solutions. 

It focuses on delivering customized accounting solutions that address the unique needs of each client, helping businesses enhance financial clarity, ensure regulatory compliance, and achieve operational efficiencies through expert accounting support.

8. Robert Half

Robert Half specializes in accounting and finance recruitment, providing businesses with access to highly skilled professionals. The firm offers temporary, full-time, and project-based staffing solutions.

With a vast network of qualified candidates and a deep understanding of the finance industry, Robert Half ensures that businesses can quickly and effectively fill critical accounting roles.

Final Thoughts

Outsourcing your accounting functions can significantly enhance your financial operations, but it’s crucial to avoid potential pitfalls and choose the right accounting service provider. Any of the companies on our list have the reputation and experience to help.

Ready to take the next step and hire an outsourced accountant? We can help you hire skilled remote finance talent within 21 days while saving 30–70% on overhead costs. Book a free, no-commitment call with Near today and work with one of our experts to find a hiring solution that fits your needs. 

Frequently Asked Questions

How do I determine when to outsource accounting?

If you’re trying to decide when to outsource accounting, evaluate your business needs, internal capabilities, and the potential benefits (like cost savings). Common functions to outsource include bookkeeping tasks, payroll, tax preparation, and financial reporting. 

What are the risks of accounting outsourcing, and how can they be mitigated?

Risks of accounting outsourcing include data security breaches, loss of control over financial processes, and potential compliance issues. To mitigate these risks, choose a reputable outsourcing partner with strong security measures and industry certifications. 

How can I measure the success of my accounting outsourcing partnership?

The most accurate way to measure the success of your outsourcing relationship is by using objective metrics.

Common KPIs to track the effectiveness of your accounting outsourcing include cost savings, accuracy rate, collection effectiveness index (CEI), days sales outstanding (DSO), and financial statement quality.