Why Manufacturing Companies Should Consider Outsourced Accounting Services

Manufacturing companies face unique challenges when it comes to managing their finances. From inventory management to cost control, the many moving parts require careful attention and expertise.

That’s why manufacturing businesses must have a strong accounting system in place. However, handling all aspects of accounting in-house can be time-consuming and costly and may not always yield the desired results. 

Choosing to outsource accounting for manufacturing can help. 

By partnering with a professional accounting firm or recruitment agency to outsource accounting, your manufacturing businesses can improve efficiency, reduce costs, and access specialized expertise to help you achieve your financial goals. 

In this article, we will explore the benefits of outsourcing accounting for manufacturing and how it can be a game-changer for your business.

Accounting Services That Can Be Outsourced in the Manufacturing Industry

Tackling the complex and diverse financial tasks in a manufacturing company requires specialized knowledge and skills. Outsourced accounting providers that specialize in working with manufacturing companies can provide a range of services, including:

Bookkeeping

Bookkeeping involves accurate, timely recording of financial transactions, performing bank and credit card reconciliations, and managing accounts payable and receivable. 

This fundamental service ensures that all financial activities are documented and organized for better financial management. 

Accounts receivable/accounts payable management

Managing accounts receivable and accounts payable includes invoicing and collections, as well as handling supplier payments. Cash flow forecasting and management are also key responsibilities for ensuring the business maintains healthy liquidity. 

Preparation of financial statements

You can outsource the preparation of income statements, balance sheets, and cash flow statements. Remote accountants can also generate customized reports for management analysis for deeper insights into the company’s financial health. 

Cost accounting

Cost accounting includes tracking and reporting manufacturing costs, evaluating product profitability, and managing inventory. This service helps optimize production costs and determine the financial efficacy of specific products.

Inventory management

Cost-effective control of inventory, accurate tracking of raw materials and finished goods, and identification of slow-moving or obsolete inventory are all tasks that can be outsourced.

Budgeting and forecasting

Outsourced accountants can develop budgets, forecasts, and financial plans by analyzing historical data and industry trends. Regular monitoring of actual performance against these budgets identifies areas for cost savings or revenue growth. 

Payroll processing

Payroll processing is commonly outsourced to ensure accurate, timely handling of employee compensation. 

Tax preparation and compliance

Tax preparation and compliance services involve preparing and filing federal, state, and local taxes. They ensure adherence to tax laws and regulations specific to the manufacturing industry and identify potential tax-saving opportunities. 

Audit preparation

Outsourced accountants can help prepare for an audit by organizing financial statements and supporting documentation. They also assist in the audit process and communicate with auditors. 

Financial analysis and reporting

Nearshore accounting services can create customized financial reports for management and stakeholders, identify key performance indicators (KPIs), and track them against industry benchmarks. 

Business intelligence and analytics

With specialized tools, outsourced accountants can identify trends, patterns, and opportunities in the market and provide insights into current performance. 

Benefits of Outsourcing Accounting for Manufacturing Companies

Tapping into the expertise of a manufacturing accounting outsourcing firm can bring various advantages to your company, including:

Cost savings

By outsourcing accounting, you can save on hiring and training in-house staff. You also do not have to invest in expensive accounting software and technology. 

Additionally, outsourcing allows you to only pay for the services you need rather than bearing the overhead costs of a full-time accounting team.

Increased accuracy

Professional accounting firms have teams of highly trained and experienced accountants who specialize in handling the unique financial needs of manufacturing companies.

This expertise ensures accurate and error-free financial reporting, reducing the risk of costly mistakes.

Enhanced decision-making

With accurate and timely financial information from the outsourced accounting team, you can make informed decisions about your business operations.

This can help you identify areas for improvement and make strategic growth plans.

Stress reduction

Handling accounting in-house can be a stressful and time-consuming task for business owners. In a recent survey, almost a quarter (24%) of small business owners said that the stress of managing their business finances had directly impacted their mental health in the past year.

Outsourcing frees up your time to focus on core business activities while leaving the financial management to experts.

What To Consider When Choosing an Outsourced Accounting Partner for Your Manufacturing Business

Sourcing the right outsourcing accounting provider for your manufacturing business is crucial. Here are some factors to consider when choosing a partner:

Industry experience

Choosing an accounting provider with experience working with manufacturing companies is essential. This ensures that they understand your industry’s unique financial challenges and regulations and can provide tailored solutions.

Range of services

Consider what services the accounting provider offers and if they align with your business needs. Some common services for manufacturing businesses include bookkeeping, tax planning, inventory management, and financial reporting.

Data security

Manufacturing businesses handle sensitive financial information, so it’s crucial to choose a provider that prioritizes data security. Look for one with secure systems and protocols to protect your data.

Technology and tools

Technology plays a significant role in accounting processes. A reputable outsourcing provider should have modern tools and software to streamline your financial operations and provide accurate and timely information.

Cost

Outsourcing accounting services saves your business money in the long run, but it’s essential to consider the cost of services up front. Compare quotes from different providers and choose one that offers a competitive price without compromising quality.

Communication and support

Communication is key when working with an outsourced accounting provider. Choose a partner that offers transparent and timely communication as well as ongoing support to address any concerns or questions you may have.

Client reviews and testimonials

Before committing to an outsourcing firm, research and read client reviews and testimonials. This will give you an idea of their track record and past clients’ level of satisfaction.

Top 10 Companies for Outsourced Manufacturing Accounting

In no particular order, here are our picks for the top recruiting and accounting firms offering outsourced accounting for manufacturers or recruiting services to hire remote accountants experienced in this industry:

1. Near

At Near, we understand the unique challenges that manufacturing companies face and are committed to helping them overcome them. That’s why we put ourselves at the top—we don’t waste time getting your company on track.

Our team of experienced professionals specializes in recruiting top accounting talent from Latin America (LatAm), providing businesses access to a diverse pool of skilled professionals. This is a process called nearshoring, which offers various advantages over offshoring, such as time zone and cultural alignment.

Don’t just take our word for it. Our work with online custom manufacturer Bonfire saved them $53,000 per year and helped them fill roles twice as fast as they had in the past.

2. TGG Accounting

TGG is a San Antonio, Texas-based accounting firm focused on small to mid-sized business clients. It was named a Top Accounting Firm by Clutch in 2022 and spent five years on the Inc. 5000 list of America’s Fastest-Growing Private Companies.

Its outsourced accounting for manufacturing companies services include access to cutting-edge technology, extensive industry experience, financial management and advisory services, basic bookkeeping, advanced financial analysis, and more.

3. CapActix Business Solutions

Capital accounting expert CapActix is a truly global firm, with locations in India, the US, Australia, Dubai, and East Africa. The ISO-certified company’s certified advisors are equipped with QuickBooks and Xero.

CapActix’s outsourced integrated accounting services for manufacturing businesses include manufacturing bookkeeping services, accounts payable, accounts receivable, management reporting, and payroll processing.

4. Cogneesol

Cogneesol is a business transformation, technology, and consulting service that has served a variety of industries since 2008. It is based in the US, the UK, Canada, Australia, Italy, and India and is HIPAA- and GDPR-compliant.

The company’s manufacturing accounting services include cash flow statements, balance sheet reporting, trial balance, fixed assets process reports, inventory accounting, financial analysis, tax preparation services, cost variance analysis, and more.

5. Signature Analytics

Outsourced accounting service Signature Analytics has made a splash in San Diego, California, being named one of San Diego Business Journal’s Best Places to Work in 2022. The virtual company has grown across the US since its start in 2008.

Its outsourced accounting services for manufacturing and distribution companies include cost accounting systems, inventory turnover ratio, cycle time optimization, overall equipment efficiency (OEE), break-even analysis, and more.

6. Haynie & Company

Haynie & Company’s team of certified public accountants (CPAs) and management consultants has grown to 14 locations in the southwest US since its start in 1960. They have been recognized by Accounting Today, USA Today, and INSIDE Public Accounting.

The company’s professional manufacturing CPA services include tax services, audit services, client advisory services, and business consulting for a wide variety of manufacturing business types.

7. Optima Office

San Diego, California’s Optima Office is a team of accounting, HR, and OPS professionals founded in 2018. The company is entirely women-owned and has received recognition from Forbes, the Better Business Bureau, and Enterprising Women.

Its accounting services for manufacturing include cost accounting, improved revenue recognition, financial statement preparation, job costing, monthly financial reports, cash management, construction audits, operational consulting, and more.

8. Pacific Accounting & Business Services (PABS)

PABS is an accounting, finance, and back-office service provider with over 15 years of experience. It has become certified in a wide variety of software and won Best Accounting Firm from the Best of Small Business awards in 2023.

The firm’s outsourced accounting services for distribution and manufacturing companies include accounts payable, accounts receivable, inventory control, financial reporting, payroll processing support, BI and analytics, and more.

9. Lance, Soll & Lunghard (LSL)

CPA firm LSL was named one of Accounting Today’s 2024 Regional Leaders for its work throughout California and The Woodlands, Texas. It was also named the Best of Accounting in Client Satisfaction for 2024.

Its outsourced accounting services include 1099 preparation, property tax returns, quarterly payroll tax returns, monthly bookkeeping, yearly budgeting, cash flow projections, and more for manufacturing, distribution, and wholesale businesses.

10. Plumb

Plumb was founded in 1996 to provide accounting services to a few industries and has stuck with those sectors through its growth. The company is a member of the Sage Intacct Accountants Program and the NetSuite Accountant Program.

Its manufacturing accounting services include inventory management, payroll processing, cost accounting consulting, warehouse needs analysis, supplier base management, break-even analysis, physical audit simplification, and more.

Final Thoughts

Outsourcing accounting services for manufacturing can save you time and money while giving you access to expert knowledge and resources that will help you make better financial decisions. 

Carefully considering aspects like industry experience and services offered will help you choose an outsourcing partner who can help ensure your accounting functions are handled successfully.

Near understands the importance of efficient and accurate financial management. Our talent pool of skilled professionals from LatAm includes accountants with industry experience in manufacturing. 

If you are looking for top-notch accountants, contact Near today to learn more about how we can support your business growth through our recruitment solutions. 

Don’t wait any longer—book a free consultation call or fill out this form to take your manufacturing business to the next level!