SmartBooks Launches SmartBooks Genie Software to Improve Accounting Firm Efficiency Learn More

Why You Should Outsource Finance When Outsourcing Accounting

Reasons why small businesses should outsource finance with accounting.

Finance and accounting is one of the most common areas for small businesses to outsource. The practice has earned plenty of attention over the years, with outsourced accounting experts developing new strategies and innovative perspectives on how to better manage their clients’ financials across the board. Part of this is taking an end-to-end approach to money management by outsourcing the broader financials alongside day-to-day operations.

Outsourced Finance and Accounting Go Hand-In-Hand

It stands to reason that you’d outsource your larger finance tasks with your accounting. Outsourced providers these days aren’t just staffed with basic bookkeepers; many are powered by finance professionals who bring their years of industry experience to work for your company. Typically, these experts work across multiple companies and have insight into setting key strategic goals for improving efficiency, lowering costs, and improving the way your accounting tech is set up.

And if companies have experienced only outsourcing their accounting without accompanying services for their broader financials, they might not realize what they’re missing out on.

The Growing Role of Outsourced Finance

Most business owners are familiar with the benefits of outsourced accounting. It’s a common workflow option for basic processes like payroll, accounts receivable, and other simple transactional tasks. But in the early days of outsourcing, companies were hesitant to get hands-off with their higher-level strategic functions. Tasks like internal audits, metric analyses, or forecasts were considered the domain of internal auditors.

Clearly, this is no longer the case. Outsourcing companies have thrived and brought more expertise into the equation, making high-level finance and accounting services more viable than ever. These are typically bundled together so that companies can offload the entirety of their financial burden to outside professionals.

This isn’t just a matter of convenience. As detailed by Mr. Jag Dalal from the International Association of Outsourcing Professionals, the two functions synergize when taken together. He says, “If you outsource only one function, you limit your benefits. If you outsource both, you get a value beyond improving the transactional component because the outsourcer can see when cash comes in and goes out. That can help the company take best advantage of the cash on-hand and optimize internal processes.”

The Benefits of Finance and Accounting Services

So, this explains why finance and accounting has grown to prominence as an area ripe for outsourcing. But what are the tangible benefits of such an arrangement?

Most directly, business owners enjoy the comfort and peace of mind that comes with knowing that their finances are in the hands of a professional. Those who outsource accounting functions alone know this feeling well. It can be incredibly freeing to offload your company’s complicated financials to someone who knows what they’re doing.

And while it might seem counterintuitive that less control over the processes would translate to more peace of mind, the advantages of outsourcing make it possible, as noted by Mr. Dalal, who says, “Outsourcing outcomes are more likely to use clear metrics, such as savings and service-level achievement. That allows a company to have continuous improvement in their accounting and finance operation, while the company itself can focus on its core competencies.”

In brief, outsourcing means that business owners no longer have to worry about budgeting, benchmarking, closing cycles, or compliance. (Well, they should still worry about them a little, but all the heavy lifting is done by the financial gurus.)

The benefits of this are hard to overstate from a productivity and workflow efficiency standpoint. It also pays off in security and compliance. Outsourced finance and accounting professionals continually stay up to date with the latest changes to GAAP, regulatory compliance, and the evolving tax laws that shape business budgeting decisions.

This certainly contributes to the peace of mind benefits that come part and parcel with outsourcing, but it also guarantees that the company in question will establish consistent, healthy accounting practices that will set them up for success. For stable company growth (and avoiding pesky IRS penalties) there’s nothing better.

Combine Finance and Accounting Outsourcing

The benefits of outsourcing accounting and finance are clear, but to get the most value out of the arrangement, companies need to tackle both at once. The two workflows are connected; by outsourcing both, you’re giving your partner complete visibility into your company’s financials, from the money coming in to long-term budgeting plans. It’s a new type of financial management that offers plenty of potential for companies willing to give it a try.

Download our free guide to learn how to improve key financial metrics in your business.

Guide to Driving Profitability for Your Service Business