By Bradford Jones, CPA, CVA, CMA, CFF

When considering outsourcing finance and accounting processes, you don’t have to use an all-or-nothing mentality. Nor do you have to issue pink slips to your in-house accounting department.

The nice part about finance and accounting outsourcing (FAO) is that you have options — you can pick and choose certain areas to outsource, or you can outsource the entire department. It’s really up to you.

Options for Getting Starting with FAO

There are many ways to move forward with and reap the benefits of FAO.

For some organizations, outsourcing means keeping entry-level bookkeepers in place and outsourcing the CFO function. For others, keeping the CFO function in-house while outsourcing the transactional side of things makes more sense.

Regardless of how you decide to proceed, your outsourced accounting provider should be able to customize a solution.

3 Areas of Accounting & Finance That Can Be Outsourced

Below are three areas of finance and accounting that organizations typically outsource:

Bookkeeping and Back-Office Support

  • Financial reporting, tax reporting, and reporting automation
  • Managing the g/l and monthly close
  • Perform account reconciliations
  • Streamline and optimize AP and AR
  • Customer billing and payments
  • Tracking deferred revenue
  • Processing payroll and employee expense reports
  • Multi-entity consolidation
  • Transitioning to and accounting for e-payments
  • Managing subscription maintenance & renewals
  • Vendor invoice processing and payments

When you outsource bookkeeping and back-office functions like these, results include:

  • Increased productivity. The right outsourced provider will optimize your back office system by drawing from comprehensive and road-tested best practices.This approach is likely to drive efficiency for collecting and organizing data, financial reporting, analyzing financials to uncover meaningful insights, etc.
  • Stronger internal controls. Managing your bookkeeping and back office in-house often leads to little or no oversight, separation of duties, and documented and enforced policies and procedures.
  • Cost savings. In a recent study, 57% of companies cited cost-cutting in their decision to outsource the accounting function.

Controller Services

  • Management reporting
  • Compliance management
  • Employee and vendor communication
  • Policy adherence
  • Accounting systems implementation
  • Budget and forecasting
  • Compliance — tax and regulatory
  • Coordination of financial statement audits with external auditors
  • Evaluation of internal controls
  • Oversight of the month-end close

Generating accurate financial statements requires a skilled and experienced controller. However, capable and experienced controllers can be expensive to hire and hard to find.

When you outsource your CFO function to an accounting firm, results include:

  • Skipping the recruiting and training process. You benefit from all the recruiting, vetting, and training that firm has already done.
  • Generating accurate and reliable financial statements. Your organization benefits from peace of mind that your financials will be properly managed, and reporting will happen in an accurate, relevant, and timely manner.
  • Gaining the flexibility to grow your business and deploy new initiatives. Outsourcing your controller services can help grow your business to the next level because of strategic guidance and insights that come with deep industry and technical expertise.

Financial Planning and Analysis

For some organizations, the controller might handle this part of the accounting process. But for those in need of support in this area, outsourcing can be a game-changer that elevates the trajectory of the entire organization.

With some or all of these processes, you gain deep insights into your unique financial position and the opportunities ahead:

  • Due diligence
  • Mergers and acquisition integration/support
  • Investor communication and reporting
  • Management reporting and narrative
  • Planning, budgeting, and forecasting
  • Strategic tax planning

When you outsource the financial planning and analysis part of your accounting and finance department, you can maximize the potential for future growth by:

  • Spotting trends in costs, revenue, and cash flow that can drive profitability and strategic planning opportunities
  • Uncovering inefficiencies throughout the business
  • Strategically deploying resources toward your most robust profit centers

How to Find the Right FAO Provider

Running your finance and accounting departments is an onerous task — especially when budget and staff are limited.

Outsourced accounting can help ensure consistency and accuracy of bookkeeping, accounting, and decision making. Plus, you can tap into specialized expertise usually unavailable within the constraints of small organizations and scarce resources.

But, here’s the thing: you’ve got to find the right FAO provider.

To properly vet an FAO provider, check that the provider has:

  • Be sure the provider has experience with clients in your industry and organizations of a similar size.
  • A proven tech strategy. Ask about the software and tools they use to manage finance and accounting processes. The provider should be able to explain how they plan to integrate with your existing systems, if needed.
  • The ability to scale with you. Ask about how they will accommodate your future growth, e.g., increase in transaction volume, additional processes, or expansion into new markets.
  • Data security and compliance protocols. Assess the provider’s data security protocols, adherence to regulatory requirements, and compliance certifications.

When you work with PBMares, you can expect us to check all the boxes above. You can also expect us to provide:

  • A highly disciplined and structured process
  • A team with specialized industry expertise
  • A completely virtual, paperless, and non-intrusive experience

Learn More

Contact Brad Jones today to learn more about what you and your organization can accomplish when you outsource all or part of your accounting and finance functions.

LINK to Brad’s page

source: https://www.growthforce.com/guide-to-outsourcing-bookkeeping-accounting-smbs