Why Accounting Firms Should Outsource Accounting Tasks

Outsourcing has become an increasingly popular option for accounting firms looking to streamline their practices and improve efficiency. Accountants can focus on their core competencies and provide better client value by delegating non-core tasks to specialized service providers. 

With the rise of remote work and global connectivity, outsourcing has also become a viable option for employers seeking high-quality services at competitive rates. 

This guide delves into the benefits of outsourcing for accounting firms and how to choose and work with your ideal partner.

What Is Outsourced Accounting? 

Outsourced accounting refers to delegating accounting functions and responsibilities to an external service provider. This can include things like:

• Bookkeeping
• Tax preparation
• Accounts payable 
• Accounts receivable
• Financial reporting

Accounting outsourcing allows accounting firms to tap into specialized expertise without the costs and commitment of hiring full-time employees.

Key Benefits of Accounting Firms Outsourcing Accounting Services

There are several benefits to outsourcing accounting services, including what most businesses are looking for: saving on overhead costs.  

Cost savings

Outsourcing can significantly reduce your overhead costs. 

An internal team is costly and time-consuming to manage. Outsourcing can reduce the number of in-house employees you need, freeing up time and resources that can be used on core business functions. With a smaller on-site team, you don’t have the expense of a large office space and the in-person costs that come with it (coffee, office equipment, etc).

By working with outsourcing providers or independent contractors, you also won’t have to pay for employee benefits or training costs.

Operational efficiency

Outsourcing tasks to third-party accountants can significantly enhance your firm’s operational efficiency. 

By delegating routine and time-consuming activities such as bookkeeping, tax preparation, and payroll processing to specialized service providers, you can streamline your workflows and reduce internal workload. This lets your in-house staff focus on high-value activities like client management and strategic planning, ultimately improving service quality and client satisfaction. 

Additionally, third-party accounting professionals bring specialized expertise and advanced tools, ensuring that tasks are completed swiftly and accurately, further bolstering your firm’s overall productivity and efficiency.

Scalability and flexibility for growing practices 

Another key benefit of outsourcing accounting tasks for your firm is the scalability and flexibility it provides.

As your business grows, outsourcing allows you to seamlessly adjust the level of support to match your specific needs. You can easily ramp up services during peak times or scale back when the workload decreases, all without the hassle of hiring or laying off employees.

This adaptability ensures that your accounting processes remain efficient and uninterrupted, enabling you to focus on expanding your business and meeting client demands without being bogged down by administrative challenges.

What Tasks Can Outsourced Accountants Take On

Finance and accounting business process outsourcing can provide support to your accounting firm in a wide range of areas, including the following:

Transaction processing and recordkeeping 

Outsourced accountants can handle routine tasks such as:

• Data entry
• Invoicing
• Bank reconciliations

This frees up valuable time for your in-house team to focus on more complex and value-adding activities.

Financial statement preparation 

Outsourced accountants can prepare financial statements following US GAAP accounting standards and regulations, such as profit and loss statements and balance sheets. This ensures accuracy and compliance for your client’s financial reports.

Cash flow management and forecasting 

Outsourced accountants can help monitor and manage your client’s cash flow, providing insights into potential financial risks and opportunities. They can also assist with budgeting and forecasting to support business planning.

Payroll processing 

Outsourcing payroll processing can save time and resources for your firm. Outsourced accountants can handle tasks such as calculating wages, taxes, and benefits, ensuring compliance with employment laws.

How to Choose an Accounting Outsourcing Partner

Choosing the right outsourced accounting partner for your accounting firm is crucial for the success of your practice. Sometimes that partner is an accounting outsourcing company with a team of qualified professionals, and sometimes it’s one or two independent contractors.

Here are some key factors to consider when selecting an accounting partner:

Expertise and experience

Look for a company or an independent contractor with a proven track record in providing high-quality outsourced accounting services. They should have experience working with clients in your industry and be well-versed in relevant regulations and standards.

Services offered

Different providers and contractors may offer varying levels of support, from basic bookkeeping to more comprehensive financial analysis. Determine which services you need and ensure that the partner can meet your requirements.

Technology and security

With sensitive financial information being shared, it is important to choose a partner with strong data security measures in place. Additionally, consider the technology and software they use and ensure that it aligns with your systems.

Communication and support

Effective communication is essential for successful outsourcing. Look for a provider that is clear on their communication channels and offers responsive support when needed.

Cost and value

While cost is an important factor, it should not be the sole determining factor. Consider the value that a service provider can bring to your firm in terms of expertise, efficiency, and time savings.

How To Seamlessly Integrate Outsourced Accounting into Your Business

While the process is a little different for every company, here are some baseline steps you can follow to make your outsourcing experience as smooth as possible.

1. Identify your needs: Before outsourcing, it is important to clearly define your firm’s needs and which tasks you want to delegate. This will help you choose the right service provider with the necessary skills and expertise.
2. Choose a reputable service provider: Research different service providers and read reviews from other firms that have used their services. Look for experience, qualifications, and a track record of success.
3. Set clear expectations: Communication is key when working with an outsourced accounting team. Communicate your expectations, deadlines, and any specific requirements to avoid misunderstandings or delays.
4. Establish a secure system: Ensure that the service provider has secure systems in place to protect your sensitive financial data. This could include secure file-sharing platforms or encrypted communication channels.
5. Monitor progress: Even though you have outsourced certain tasks, it is important to monitor the progress and quality of work being done. Schedule regular check-ins with your service provider to ensure that everything is on track.
6. Provide feedback: As with any working relationship, feedback is crucial for improvement and maintaining a good partnership. Be open and honest about what is working well and where there may be room for improvement. 

Strategies for Overcoming Challenges in Outsourced Accounting 

Outsourcing can bring numerous benefits to accounting firms, but it also comes with its own set of challenges. Here are some strategies for overcoming common obstacles in outsourced accounting.

Communicate and coordinate with the outsourcing team 

Effective communication and coordination are crucial for successful outsourcing. Make sure to establish clear communication channels, set expectations, and provide regular feedback to your service provider.

Address client concerns and expectations 

Outsourcing may raise concerns among clients, such as data security and quality control. Be transparent with your clients about your outsourcing arrangements and address any concerns or questions they may have.

Manage risks and mitigate errors 

Outsourcing can introduce risks and errors, so it’s important to have processes and internal controls in place to mitigate them. This can include regular quality checks, data backups, and clear guidelines for handling sensitive information.

How To Maintain Success When Outsourcing Accounting Services

As we’ve mentioned throughout this article, outsourcing can deliver significant advantages to your accounting firm, but achieving sustained success requires strategic planning and diligent management. Choosing the right service provider and establishing clear processes for effective collaboration are crucial.

Here are some essential tips to help you maintain success when outsourcing accounting services.

Set clear expectations and communication channels

To ensure smooth collaboration, start by clearly defining the scope of work and outlining specific expectations for deliverables. Establish regular communication channels for timely updates and to address any concerns that may arise.  

Effective communication is the backbone of a successful outsourcing relationship.

Regularly monitor and report on performance

Set up measurable performance indicators and consistently review them with your service provider. Address any issues or areas for improvement promptly to maintain high-quality services. 

Regular monitoring helps you promptly address any issues or areas for improvement, ensuring that the services remain high-quality and aligned with your goals.

This proactive approach not only ensures continuous improvement but also fosters a strong, collaborative relationship that can adapt to changing needs and expectations.

By following these tips, you can maximize the benefits of outsourcing and ensure that your accounting services are efficient, reliable, and aligned with your firm’s objectives.

Final Thoughts

Outsourcing accounting services can provide numerous benefits for your firm, from saving time and money to improving efficiency and quality of work. 

Remember, effective communication is key when outsourcing work to a third-party accountant. Be clear about your expectations and needs to ensure a smooth working relationship. 

If you’re ready to leverage the advantages of outsourcing, Near offers an ideal solution. We connect accounting firms with highly skilled independent contractors in Latin America. By hiring through Near, you can save up to 70% on salary costs compared to hiring a US-based accountant—without compromising on expertise or quality.

Schedule a free consultation call to discuss how we can help your firm streamline and grow by partnering with outsourced accountants.