Outsourcing is a natural byproduct of specialization.
It provides a business with greater flexibility, allowing the company to focus on broader growth initiatives while external experts tackle the operational minutiae. Although it has been a growing business practice for over three decades, COVID-19 has rapidly accelerated its potential use for small and large companies alike.
Now that a significant portion of the entire global economy has been forced to switch to a decentralized, remote workforce, more business leaders are realizing the value outsourcing non-core functions could provide, especially when it comes to accounting.
Remote Work and Outsourcing
Due to COVID-19, the digital landscape is evolving at a breakneck pace. Add continuous technological innovations to the mix and it is easy to see why businesses—especially those that lack the space or funds for in-house departments—are shifting to a hybrid of in-house and external teams.
At its essence, outsourcing allows a business to optimize.
It makes it possible for you to assemble a team of highly skilled experts without the additional expenses of a full-time staffer. Additionally, outsourcing empowers you to better utilize your existing talent and resources as they shift their focus to core business functions.
The result is typically this:
- Lower operating costs
- More capital funds
- A cash infusion
- Access to new resources
With a remote workforce, you’re effectively functioning as you would while outsourcing, but with one significant difference—you’re paying more. So, going forward, it makes even less financial sense to hire in-house than it once might have since you no longer recoup the benefit of keeping these various departments under one roof.
Benefits of Accounting Outsourcing
Domestic outsourcing as a routine business practice was already an inevitability due to economies of scale. It was only a matter of time until an even greater number of businesses saw the opportunity to delegate time-consuming tasks externally, cut expenses, and optimize internally.
COVID-19 has simply acted as fuel on the flames, spurring the virtual boom onward. This disruption has provided a unique opportunity for businesses to reassess their strategies and modes of operation and then ask themselves:
- Is this the best way to operate?
- Is this the most efficient use of our finite resources?
Few places within your organization are better suited for outsourcing than the accounting department. Why? Because there are both immediate and long-term benefits of accounting outsourcing, including:
- Cost savings – The past few years have demonstrated that workers do not necessarily need to be in an office to be effective. The same principle applies to accounting. Outsourcing your accounting department dramatically reduces your payroll costs, especially when you consider how expensive it is to hire, onboard, and train new employees. Not only do you end up paying less, you often get more from a team of highly specialized accounting pros.
- Access to specialized technology – According to CIO, “Work-from-home mandates are requiring service providers to ensure that their workers who are supporting mission-critical enterprise customers have the necessary tools and technologies to enable the speed, security, quality, and overall efficacy of services provided.”
By outsourcing, you do not have to invest capital on equipment or technology that’s required to get the job done since the outsource team already has everything they need. This access to scalable, cloud-based technologies speeds up accounting processes, eliminates costly errors and inaccuracies, optimizes payment reconciliation, and provides decision-makers with the most up-to-date financial information possible.
- Increased security – When virtual threats are increasing year over year, it’s more important than ever to have a secure, cloud-based record-keeping and accounting system. But migrating from physical records and servers can be a time-consuming hassle. With a team of experts guiding you through the process, it becomes much easier to make the switch. Even if you already have infrastructure in place, it is reassuring to know that your partners will keep your most sensitive data secure.
- Industry knowledge – Outsourced accounting experts must stay up-to-date with all relevant regulatory and financial rules, regulations, and best practices. They can help you wade through the mire of regulations and laws you must comply with on both a micro and macro scale. This expertise can be invaluable, especially if it prevents a significant audit that subpar accounting processes would otherwise trigger.
- Focus on what you do best – Specialization is the name of the game. You save time and energy focusing on your core functions rather than worrying about ledgers, tracking transactions, or closing the book at the end of the month. Especially for business leaders, it is a much better use of your time to devote your attention to the functions that are most likely to propel the business forward.
- Happier employees – Many accounting tasks can be time-consuming and frustrating. Simply alleviating some of the number-crunching can empower your team members to focus on strategic activities that better utilize their skills and expertise. According to Deloitte: “One of the main appeals of using contracted workers is the new opportunities created for existing employees. Not only to improve morale but to promote creativity and enhance their overall value to the organization.”
CFO Hub—Outsourcing You can Rely on
The rise of the digital age has made outsourcing certain in-house functions a viable business model, particularly for companies looking to scale. And the last year of working remote has won over even the staunchest opponents to the practice.
Have you thought about all the ways outsourcing could benefit your business?
At CFO Hub, we have. We can help you curate an in-house team of financial wizards capable of providing solutions and flexibility for any enterprise.
Hire a CFO, a controller, or an entire accounting entire department. Whatever your accounting needs may be, we can accommodate. Together, we can drive your business forward into the virtual boom.