Outsourced accounting firms provide a boon for any company struggling to keep up with the financial demands of their business. These services offer anything from simple bookkeeping services to fully fractionalized CFOs and can address the unique needs of your business.

This article discusses how outsourced accounting services work and how they can benefit your business. Your company might not need a full accounting package or a full, in-house accounting team. You might only need reliable financial reporting and record-keeping services.

No matter your need, outsourced accounting services have a solution for you. Continue reading to learn how outsourced accounting can benefit your business today.

What Is Outsourced Accounting?

When your in-house staff can’t fulfill all of the business operations in a manner that maintains productivity and efficiency, outsourced services can help fill in the gaps. With outsourced accounting, you contract a third party to fulfill the responsibilities that your existing employees can’t.

In this partnership, you have access to scalable services that don’t need direct access to your organization. This helps you avoid the pitfalls of the hiring and onboarding process. With outsourced accounting services, you avoid associated costs such as misallocated financial resources and other fees such as health insurance, benefits, and training.

What Services Does Outsourced Bookkeeping Include?

Outsourcing accounting services give you access to professionals who track your revenue and expenses, manage your accounts payable/receivable, and handle payroll reconciliation. With many providers, you can also access cloud-based accounting.

Outsourced bookkeepers can track all of your financial transactions on a ledger and accounting software to keep all of your data easily accessible and well-structured. They issue real-time reports and automatically send accurate invoices. You can see all outgoing and incoming funds so you can have a precise depiction of your company’s financial well-being.

Outsourced accounting services keep track of what you owe your vendors and your purchases, as well as what your clients owe you, so you don’t lose track of your incoming and outgoing finances. They also calculate your employee wages and appropriate deductions, helping you monitor their taxes.

Using outsourced accounting services gives you access to the most cutting-edge accounting software on the market. This software automates much of the menial bookkeeping tasks that can hoard productivity if performed manually.

What Is an Outsourced Accountant Vs. An Outsourced Bookkeeper?

Accountants and bookkeepers perform many of the same job responsibilities. However, accountants require more extensive training and need a certification. While bookkeepers can compile and organize financial records and perform daily calculations, accountants can analyze, interpret, and give recommendations based on that information.

Bookkeepers responsibilities:

  • Handling incoming payments, outgoing money, and other banking activities
  • Compiling a company’s financial records
  • Entering raw financial data such as receipts, payments, and transactions
  • Aligning bookkeeping responsibilities with government compliance
  • Assisting financial reports audit preparation

Accountant responsibilities:

  • Financial data management
  • Interpret and analyze data
  • Report generating for IRS and other government agencies
  • Aligning financial reports with industry standards
  • Issues recommendations about steps to maintain the company’s financial standing

The Different Types of Outsourced Accounting

There are four main types of outsourced accounting services. Depending on your business’s needs, you may need one, or you may need all four. One of the most beneficial aspects of outsourced accounting is its scalability. You only get what you need.

Bookkeeping

As noted, bookkeeping puts basic controls on your financial records so you can focus on your core business principles and expansion. Outsourcing accounting firms assign you a controller who tracks financial records, revenue, and spending in this mode. They can also help process vendor and customer invoices and record credit card transactions.

Monthly Accounting

Monthly accounting is one step up from bookkeeping. It involves a more hands-on approach to closing books and providing insights to business owners about their financial health. They provide services such as reconciling all accounts in the balance sheet and giving executives reporting tools that help them understand profit strategies and performance KPIs.

Cash Flow Forecasting

Bookkeeping and monthly accounting services focus on the proper maintenance of financial records. However, cash flow analysis focuses on the future. Organizations can’t function without a healthy cash flow ratio. In this tier of outsourced accounting services, your provider reviews all of your company’s cash inflow and outflow. They implement the latest technology into your infrastructure and help business owners understand their cash flow strategy.

Outsourced CFO

Some aspects of an organization’s financial management require more in-depth financial services. Chief financial officers, or fractional CFOs, give businesses access to top-level financial advisory and consultant services. Their hands-on guidance deals with areas such as capital procurement, acquisitions, and succession planning.

These professionals can also be present for day-to-day operations during board meetings, cash management evaluations, and developing contingency plans in the face of cash flow issues.

Why Do Companies Outsource Accounting?

Outsourcing your accounting processes often comes down to the subject matter expertise you gain, the flexibility these services provide, and the trust you can place in these firms.

Subject Matter Expertise

The right outsourced accounting providers don’t only provide bookkeeping services. They give you a trusted advisor with a wealth of experience to define your financial processes and give you strategic initiatives to address those processes.

Flexibility

Outsourced accounting’s scalability gives organizations the ability to scale up or down as needed. Whether you need a month-to-month arrangement or something more intensive, outsourced accounting has the correct solution for you.

Credibility

Financial expertise isn’t easy to come by. It takes years of experience and outsourced accounting services provide access to professionals who devote themselves to gaining that expertise daily.

Conclusion- How Does Outsourced Accounting Work?

Outsourced accounting works for any company that needs access to financial reporting, consulting, or infrastructure. If your business is in growth mode, outsourced accountants can provide the bandwidth you need to fulfill your financial responsibilities. They also respond to any unique needs your business may have.

Whatever your financial situation, chances are, you can contract an outsourced accounting firm to fill the gaps in your accounting department. Whether you find yourself in dire straits or times of prosperity, outsourced accounting experts can make the difference for your company.