Outsourcing can be a powerful tool for many organizations. However, misconceptions about outsourced accounting services can prevent companies from taking advantage of this valuable, robust, and evolving service. In this blog post, we will debunk five of the most common misconceptions surrounding outsourced accounting.
Misconception 1: Outsourcing is too expensive.
One of the most prevalent myths is that outsourcing is too expensive. However, when you factor in the time and resources required to manage your finances in-house, hiring, training, and retaining talent while paying fringe benefits, outsourcing your finance department is usually a far more cost-effective option.
Outsourced accounting experts have the resources and experience to complete finance-department functions efficiently while providing more service breadth than any single in-house staff. Additionally, while many in-house accountants find themselves juggling many data-processing responsibilities, outsourced Controller/CFO services can manage the ongoing transaction processing while maintaining focus on your organization’s strategic direction. This dynamism adds significant value in the short and long term.
Misconception 2: You don’t need to outsource if you already have an in-house bookkeeper.
Another common misconception is that outsourced accounting services are unnecessary if you already have in-house accountants/bookkeepers. In reality, the flexibility of outsourcing compliments in-house staff by assisting the in-house staff to perform their duties more accurately/effectively or by adding additional service level(s) which ultimately elevate the depth, internal control environment, and reporting quality of your finance department
For example, Outsourced Controller’s/CFOs can handle high-level tasks like budgeting, financial planning, and analysis while in-house bookkeepers can focus on day-to-day transaction processing and financial statement compilation. This division of labor increases efficiency and ensures that all aspects of your finance department are running effectively.
Misconception 3: Only large organizations can outsource.
Many believe that only large organizations can afford to outsource. Given the customizability of outsourced service packages, small and medium nonprofits can greatly benefit from outsourced accounting services. Many small and medium size organizations utilize customized outsourced accounting services to economize costs while receiving financial information and strategic advice needed to take their organization to the next level. In turn, outsourcing helps pave a clear path to growth for small and medium size nonprofits.
Misconception 4: Outsourcing means losing control of your organization’s finance department.
One of the biggest fears about outsourcing is the loss of control over your organization’s finance department. However, the contrary is true. Outsourcing provides you with more control of your finance department. Outsourced engagements require the implementation/optimization of processes, standard operating procedures, and efficient workflows that create consistent, timely and accurate financial data. In addition, the implementation of cloud-based financial technologies provides anywhere/anytime access to your organization’s financial data while optimized processes provide continuity and scalability.
By allowing outsourced experts to optimize your finance department’s technologies and streamline your processes you gain more visibility into the real-time financial position of your organization thereby allowing you to efficiently respond to challenges and make data-driven strategic decisions.
Misconception 5: Outsourcing isn’t secure.
In today’s digital age, information security is a top concern. However, a key piece of any outsourcing engagement is creating processes that maximize both information security and internal controls. Many outsourced firms implement 3rd party softwares’ to streamline client operations. Many of these 3rd party softwares’ have robust security capabilities built into their features. In addition, many of these software providers are required to undergo rigorous security audits in the form of SOC 2 audits. Lastly, outsourcing by design adds a layer of internal controls to your organization by segregating duties or adding additional layers of review.
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Don’t let these misconceptions prevent you from exploring outsourced accounting as a solution for your business. By understanding the reality behind these myths, you can make an informed decision that best serves your business needs.
Goldin Group has over 15 years of experience helping nonprofits achieve their goals by leveraging our customized outsourcing solutions. Reach out today to learn more about our outsourced accounting services.