What is Outsourcing for Accounting Firms and Why Outsourced Accounting Bookkeeping is Good for Your Firm

Accounting firms offer a variety of services. Some like tax preparation, bookkeeping, and payroll are purely compliance-related. At the same time, business advisory, financial planning, and more are high-margin value-added services that improve credibility, client retention and help firms take the jump from being a pure-play accounting firm to a trusted advisor to clients.

However, offering such a bouquet of services is not an easy task by any stretch of the imagination. Some firms struggle, while others seamlessly provide their services. What’s the difference? While there might be many, one of the critical differences is outsourced accounting bookkeeping. We realize that some accounting firms out there turn up their nose when they hear the word ‘outsourcing.

But it is imperative that you look at outsourced bookkeeping solutions from a ‘business growth’ perspective and not just a ‘money saving’ perspective. Do away with your outsourcing prejudices.

So, before we talk about why outsourced accounting bookkeeping, let’s take a closer look at what outsourcing is from the accounting perspective.

What is Outsourcing for Accounting Firms?

The basic idea behind outsourcing is sending tasks to an external resource (not on your business’s payroll), whether onshore or offshore, who can affordably perform these tasks. The premise is that your business will cut down on the operational costs, allowing you to grow your revenue and ensure that you can boost profits.

Now, let’s see what accounting firms are signing up for when choosing remote staffing or outsourcing. A provider offering outsourced bookkeeping solutions will help your accounting firm build capacity by accessing offshore accounting professionals. These accountants are skilled in US accounting standards and even tax legislation to manage tax, accounting, and bookkeeping tasks efficiently. These accountants work remotely from their delivery centers and collaborate with your firm through a highly secure client portal to ensure comprehensive data security and effective collaboration.

These outsourced accountants work like an extension of your internal team and smoothly integrate with your internal processes so your team scales with zero fuss. You get the benefit of everything that the outsourced accounting services provider brings to the table.

A top-tier accounting firm will help your firm not only set up a virtual staff but also manage it and optimize its potential on your firm’s behalf. What’s more, the remote staffing or outsourcing process includes the outsourced accounting bookkeeping services providers sending a collection of accountant resumes your firm’s way. You can interview the candidates, and only after you are sure about their qualifications do you pick them and sign the outsourcing contract.

So, it is not as simple as getting in touch with an outsource bookkeeping USA services provider, just evaluating the cost savings and signing the SLA.  It is a far more strategic exercise than some might believe it to be.

Now, let’s move on to the all-important question:

Why Should You Outsource Your Bookkeeping?

There are plenty of benefits of outsourcing bookkeeping, and it is essential to think beyond the fundamental cost-benefit analysis:

1. Bring Down Your Operational Expenses

So, you can’t look away from this primary benefit, can you? Companies outsource to achieve significant cost savings, and this reason remains true for accounting firms as well. With the right accounting outsourcing services provider, you can save up to 50% on your accounting and bookkeeping costs. This is a significant benefit that will allow you to improve your earnings from the same amount of tasks. In a tough economy, a percentage of this saving can be also be passed on to your clients, who will be more than happy to save money; over time, this can boost your client retention rates.

2. Capacity Building and Scalability

What is that one challenge that can impede an accounting firm’s growth?

Building capacity to improve productivity.

Scaling the firm is de rigueur for any business but more so for accounting firms who have to keep up with demanding client needs. But, they need to do so, keeping their costs in check. Yes, adding internally to the team is a good idea, but this move will jack up the bottom line by adding employee salary, associated infrastructure, and the likes to the overall costs.

This is where outsourced accounting bookkeeping comes in to help save the day.  Your firm can add to its team strength without worrying about increasing the employee costs. Yes, there are no employee health benefits, no holiday cover, etc. Also, you can reduce the team strength during the lean season, if any. Of course, as an accounting firm, you aim to ensure there isn’t a poor season at all.

3. Staff Retention

This is one of the strategic benefits of outsourcing bookkeeping. We know the accounting industry is battling a talent shortage, add staff attrition to the mix, and you’ve got a significant problem on your hands. One of the reasons for turnover in the accounting industry is burnout. Come the busy tax season, and accountants find themselves overwhelmed with work. Work-life balance becomes a pipe dream, and despite putting in long hours, there is still work left to be done. It is essential to understand that the psyche of an accountant is such that they want to help clients any which way they can; they firmly believe in going above and beyond. Moreover, in a highly competitive industry, not doing so can mean losing the client who will prefer to go elsewhere.

Not many experts will tell you that one of the critical answers to why you should outsource your bookkeeping?, is ensuring that your in-house staff is satisfied with the work environment. This means they don’t think about leaving because outsourcing has their back when they are overwhelmed with work.

There is another facet to this, which is ‘work satisfaction. Accounting professionals don’t want to get caught in a rut where they are repeatedly doing the same thing, which typically happens in compliance-related tasks like accounting and bookkeeping. They want to grow their skillsets and do more with expertise and experience. This is possible if your firm chooses to outsource bookkeeping, USA. The talents of your accountants can be used in other complex spheres that ensure job satisfaction.

4. Aligned with a Growth Mind-set

Accounting firms and CPAs need a growth mind-set. This article in the Journal of Accountancy is an excellent read on this subject. There are a few barriers to growth, and while the resolution of some of these challenges is not in our hands (COVID-19 is a case in point); there are specific challenges that can be addressed seamlessly and with an eye on the future.

A growth mind-set is bolstered by adequate support.  E.g., suppose you want to focus on value-added engagement with your clients. In this case, you need to know that your ‘bread and butter’ services are managed with due efficacy by outsourced accounting bookkeeping services providers. What’s more, you need to future proof you firm against the challenges you will encounter in the future. To do this, nothing beats exploring and optimizing new revenue streams. So, if one stream dries up, there is another one that keeps delivering much-needed revenue. Again, this is one of the benefits of outsourcing bookkeeping that is seldom talked about. Your commoditized services are taken care of by the outsourcing services provider, while your in-house staff takes care of the new and highly specialized revenue streams.

Conclusion

Remote staffing or outsourcing is a strategic growth initiative and not just a money-saving solution for your accounting firm. Don’t limit your perspective or get trapped in an outdated understanding, of outsourced bookkeeping solutions.

The need of the hour for your firm is to build resilience and new efficiencies without increasing the bottom line. Outsource bookkeeping USA to keep the bottom line in check and still grow your top line. But this can’t happen if you work with any accounting outsourcing services provider. You must work with the best in business to get the benefits you are looking for. Otherwise, the move to outsourcing will not result in ROI-driven transformation.

So, make the right choice and think the proper thoughts from the outsourced accounting bookkeeping perspective to reap the benefits.