CPA firms are under extreme pressure to deliver comprehensive and specialized services to their clients. That doesn’t mean CPAs always were in calm waters. The pressure was always there and always be there. However, recent times though have been a tad too turbulent for the CPA fraternity. Changing regulatory compliance to the ever-ending wave of in-house employee attrition, a new “normal” phase post-pandemic, and the looming recession—the problems seem to be steady.
The good news here is “outsource accounting services.” Yes, you read it right! As per reports, the Business Process Outsourcing industry is projected to rise high with a compound annual growth rate (CAGR) of 8.5% during 2022-2032.
Outsourcing involves co-sourcing with an external accounting firm to oversee the financial operations of your clients. As a CPA, you can benefit from a highly experienced accounting professional without stressing over onboarding or training.
What are the Top Benefits of Accounting Outsourcing Services?
Regardless of your strategy, outsourcing has the power to deliver numerous advantages beyond cost savings. With their team approach, encompassing a variety of talents and scalable resources, it becomes challenging to match the capabilities of hired workers.
As per recently researched survey by the American Institute of CPAs (AICPA), around 60% of CPA firms outsource at some portion of their accounting functions.
- Saves Time and Increases Productivity
As a CPA, your responsibility lies in delivering quality services at an affordable cost, and this objective can be achieved through partnering with the right outsourcing firm. By doing so, you can dramatically save money.
These firms offer a cost-effective alternative to hiring an entire in-house accounting team and grappling with attrition. Additionally, you gain access to a highly experienced and educated accounting team that comprehends the specific accounting needs of CPA firms.
The primary motive for outsourcing is cost reduction cited by 57% of businesses, as reported in surveys conducted by Deloitte. By selecting the appropriate outsourcing partner, you can successfully reduce costs, identify crucial business indicators, and witness a notable increase in operational efficiency.
- Maintains Compliance
CPAs must stay up-to-date with changing federal, state, and local regulations to ensure smooth business operations and meet tax requirements. However, keeping up with these rules while managing clients can be overwhelming.
By partnering with an outsourcing provider, you can relieve yourself of the burden of liability and the risk of non-compliance. These providers specialize in their field and efficiently ensure compliance with ever-changing rules and regulations. So, there’s no need to stress; your books and reports will be fully compliant.
- Reduces Fraud Risk
CPAs can attest to the fact that having an in-house team often increases the risk of losses due to internal fraud. You may have numerous aspects to manage, which can result in overlooking in-house processes without sound policies and procedures in place, leading to various types of fraud.
This is where CPA accounting services can benefit you by not only helping you implement better policies but also working with the entire team. They will ensure your business always has several quality checks and balances in place to prevent fraud from occurring.
- Set Standards for Data Collection, Analysis, and Action
Outsourcing service providers have extensive years of experience in the industry, enabling them to understand various types of processes, systems, software, tools, and technology that work best for your practice in automating data collection and reporting.
Implementing a comprehensive, road-tested back-office system recommended by these providers can greatly benefit your CPA firm by facilitating efficient data collection and organization, enabling seamless reporting, and empowering data-driven decision-making.
- Facilitates Better Financial Forecasting
By implementing efficient and routine data collection and reporting processes, your company’s financial forecasting will significantly improve, resulting in a higher accuracy rate. This improvement enables you to identify trends and patterns in your finances, revenue, costs, and cash flow, ultimately enhancing overall financial management and strategic planning.
How to Hire the Right Accounting Outsourcing Company for your Practice?
When hiring an accounting outsourcing company, selecting the right partner is crucial to ensure efficient and accurate financial management for your business. Here are some steps to help you hire the right accounting outsourcing company:
- Assess your Needs
Before seeking an outsourcing company, evaluate your specific accounting requirements. Determine the tasks you want to outsource, such as bookkeeping, tax preparation, financial analysis, or payroll processing. Clarify your goals, expected outcomes, and the level of support you need.
- Research and Shortlist Potential Companies
Conduct thorough research to identify accounting outsourcing companies that align with your needs. Look for companies with a solid reputation, relevant experience, and expertise in your industry. Seek recommendations from colleagues, professional networks, or business associations. Use search engines, online directories, and social media platforms to create a list of potential companies.
- Evaluate Expertise and Qualifications
Review the credentials and qualifications of each shortlisted company. Check if they have certified accountants, relevant industry experience, and a track record of serving clients in similar situations as yours successfully. Look for any specialized skills or software proficiencies that may be important for your business.
- Consider Scalability and Flexibility
Assess the scalability and flexibility of the outsourcing company. Ensure they can accommodate your business’s growth and adapt to changing needs. Inquire about their ability to handle increased volumes of work during busy periods or seasonal fluctuations.
- Evaluate Security Measures
Data security is paramount when outsourcing accounting services. Inquire about the company’s security protocols, including data encryption, access controls, and backup procedures. Ensure they comply with relevant data protection regulations and have robust measures in place to safeguard your sensitive financial information.
Innovate the Way you do Business for Less
Outsourcing accounting is a growth catalyst for CPA firms because it enables you to focus on core activities, maintain a competitive edge, scale operations more efficiently, and increase profitability. By leveraging outsource accounting services, CPAs can grow their business while offering better value and services to their clients.
