Is your company struggling to tackle all its accounting needs? Companies that have lost a CFO, outgrown
their bookkeeper, changed their offerings or experienced high growth can have a hard time finding the
right accounting expertise — at the right price — in today’s tight labor market.

Outsourcing is a possible solution. Here are eight benefits this option can provide your company and its
bottom line.

1. Access to Top-Notch Expertise

It can be challenging to recruit and retain talented professionals, especially for smaller businesses with
limited resources. When you outsource, you have ready access to highly experienced accountants who
are up to date on best practices. Outsourcing firms have qualified team members with expertise across
the entire spectrum of accounting roles — from bookkeeper to CFO — as well as specialized niche
knowledge for you to tap as needed. That means they’re likely to perform your work correctly the first
time, and in a cost-effective manner.

2. Access to the Latest Technology

Outsourcing provides ready access to sophisticated, updated accounting and tax software and other
technology tools. Smaller organizations frequently lag behind their larger competitors on the adoption
of such tools, which might be cost-prohibitive until they’ve been on the market for a while. Reliance on
outdated systems could put you at a disadvantage. Outsourcing firms can spread the costs of early
adoption across multiple clients so you needn’t wait for prices to drop.

3. Reduced Staffing Costs

Business owners sometimes regard outsourcing as just another cost. It may be more accurate to view
outsourcing as an opportunity to cut your accounting costs while maintaining the quality of the output.
After all, staffing is often one of a company’s largest expenses. By outsourcing your accounting function,
you can avoid paying staffing-related expenses, including:

Salaries,
Benefits,
Employment taxes,

Unemployment benefits, and
Training.
Outsourcing may also allow you to avoid the high cost (and frustration) associated with recruiting and
managing staff. While you still have to pay outsourcing firms, their charges are usually much lower than
employing full-time staff.

4. The Ability to Scale Costs as Needed

Many businesses have fluctuating accounting needs during the year. For instance, they might be busier
at year-end and tax time or when pursuing a major capital investment project, such as a merger or
public offering. Outsourcing allows you to pay only for what you need, when you need it.

In effect, you can convert fixed staffing costs into variable outsourcing fees. With outsourcing you can
dial your level of service up or down on demand. And you don’t have to worry about keeping full-time
accounting staff busy in slow times to head off layoffs — or scrambling to bring on new hires or pay
overtime when the workload is heavier.

5. Smarter Resource Deployment

Outsourcing frees up time for your management team to focus on growing the business through
marketing, operations, networking and relationship building. In addition, lower-level accounting staff
with extra bandwidth can be assigned to work in other areas that could use more manpower, such as
procurement or customer service. This can translate to better service, increased customer satisfaction
and higher profits. Moreover, you won’t have to worry about critical accounting employees calling in
sick, using leave, quitting or otherwise leaving a gap.

6. Enhanced Decision Making

External accountants who work with multiple clients across industries obtain a higher level of business
intelligence than those who have worked solely for one company. You can leverage this expertise to
make better, more timely business decisions. Plus, outsourcing firms usually can answer your questions
and provide analytics faster than in-house staff that have fewer resources available to them.

7. Reduced Exposure to Compliance Risk

In-house accounting staff typically have their hands full keeping up with the day-to-day tasks, such as
journal entries, invoicing, bill payment and account reconciliations. They often find it difficult to stay on
top of the latest tax, accounting and regulatory requirements. Inadvertent mistakes can leave your
company vulnerable to legal judgments, penalties, fines and unwelcome media attention. Outsourcing
firms, on the other hand, closely monitor such developments and promptly respond by adjusting their
processes and procedures.

8. Improved Fraud Prevention and Detection

The Association of Certified Fraud Examiners estimates that organizations lose 5% of their revenue to
employee fraud every year — and 12% of frauds occur in the accounting department. Financial reporting
scams are the least common type of fraud, but also the costliest, with a median loss of nearly $600,000,
compared to roughly $100,000 for asset misappropriation schemes.

Using external accountants who aren’t in a position to profit from financial misstatement cuts your risk
of the fraud by company insiders. External accountants also are more likely than employees to
immediately flag objectively suspicious activity, and they may have fewer opportunities to collude with
others to commit fraud.

Accurate, Timely Financial Reporting Is Critical

Accounting isn’t necessarily the most glamorous part of running a successful business, but it’s essential.
If you can’t find or afford to hire well-qualified professionals to handle your financial reporting needs, it
may be time to consider outsourcing as a temporary — or permanent — solution. Contact your external
accountant to determine what’s right for your situation.