Low unemployment, a retiring workforce and a lack of skilled workers continue to squeeze the resources of many organizations. In the past year, nearly a quarter of CEOs had to cancel or delay a key strategic initiative because the right people weren’t available, according to CPA Practice Advisors. As businesses focus on building a successful dynamic workforce, they are increasingly turning to hybrid models to optimize internal talent while drawing on external core accounting competencies.
Gregg Landers, Managing Director of Outsourced Accounting Solutions, shares insights about the role outsourced business solutions can play in helping business leaders stay focused on their strategic goals.
Q. What has led to the increased need for outsourced accounting solutions?
GL: It's a confluence of factors. There are far fewer accountants graduating college, and that's going to continue for the foreseeable future. The majority of those with degrees seek to enter the CPA profession rather than becoming employees of other companies. Younger business owners recognize the value of outsourcing services like accounting more than their predecessors did. That value includes gaining access to degreed accountants who are current on technology and trends, with all work reviewed by knowledgeable accounting managers. Outsourcing often enables access to leading-edge technology and the use of analytics and reporting tools — all of which help business owners navigate their business.
Q. How does experience level factor into outsourced accounting?
GL: When an organization outsources accounting to a qualified firm, they’re gaining a depth of expertise and capabilities beyond any one person’s individual skill set. Let’s say there's a new accounting regulation change. An outsourced accounting firm, especially a larger one, will more likely be aware of its implications and how to incorporate it than a sole professional or a small bookkeeping shop. The result is improved internal controls, better analytics and meaningful reporting.
Q. How can outsourcing certain accounting and finance roles help a workforce realize greater efficiencies?
GL: Most significantly, outsourcing accounting can help the business owner focus on their business goals — not on the completeness and accuracy of their financials. This is especially important for early-stage companies that have some kind of financial backing. In those cases, the owner has a fiduciary responsibility to manage the investors’ monies responsibly, even if the investors are family members. Additional benefits include better fraud controls and updated technology for both transactional accounting and financial reporting.
Q. What are the benefits of a hybrid approach to meeting business needs, and how should an organization strike the right balance?
GL: In a hybrid approach, the internal person keeps the business owner aware of everything going on with the outsourced accounting team. This can include the identification of what the business can best do internally and using the outsourced team’s advanced skill sets for complex transactions, such as certain kinds of revenue, leases and cash flow forecasting, as well as developing business strategies. In most situations, the business should retain control over some aspects of the accounting, such as payment approval and certain payroll aspects. It often makes sense to fully outsource accounting in a company’s early stage and then, as the business grows, shift the outsourcing to more financial advisory aspects.
Connect with us to learn how your organization can benefit from outsourced accounting.