Outsourced Accounting Misconceptions

Outsourced Accounting Misconceptions

Outsourced accounting comes with a lot of preconceived notions. After all, outsourcing any part of your business comes with inherent risks. You need to know you can trust who you’re outsourcing to and what they can offer. 

However, as this blog shows, many of these preconceived notions are simply misunderstood. While outsourced accounting is relatively new, it’s the wave of the future. Outsourced accounting offers extensive possibilities that can promote your business’s expansion and optimize your financial processes. 

Most of the time, accounting doesn’t require full-time employees. Outsourced accounting teams give you scalable solutions to problems that need precise resource allotment. 

You can use them whenever you need them and pay for your most pressing necessities. Additionally, these services allow you to focus on your company’s sustainable growth while ensuring you stay compliant and access real-time reports and financial forecasts. 

At Fully Accountable, we believe you shouldn’t have to worry about your company’s financial health. That’s why we offer solutions for businesses of all sizes and industries. Our team of fractional CFO services and financial controllers ensure you get the financial help you need without committing to long-term contracts or salaries. When you need financial assistance, Fully Accountable is here for you. 

People Will Lose Jobs If Your Company Outsources

Outsourcing carries quite a few negative connotations and many believe it requires downsizing and costs people jobs. However, in most cases, outsourcing simply requires restructuring. 

For example, the CEO of a small business tries to run all accounting operations by himself. They pay all the invoices, run payroll, analyze financial reports, and forecast future capital procurement. 

WIth outsourced financial operations, the CEO doesn’t lose their job. Outsourced accounting frees the CEO to focus on what matters: sustainably expanding the business. Additionally, if one accountant handles everything or an in-house accounting team can’t keep up with fluctuating demands, an outsourced accounting controller is a scalable solution that saves you money. 

None of these scenarios call for employees getting the ax. If anything, they allow your employees to focus on their core responsibilities, which in turn can optimize efficiency and boost morale. 

Outsourcing Is Too Expensive 

People might mistakenly picture outsourced accounting as rich executives taking private jets across the country to tell you you have to pay them exorbitant fees for their services. The reality, however, is that outsourced accounting services save you money

The most obvious way outsourced accounting saves you money is through the service’s scalability. These services scale to your needs and you don’t need to pay salaries for their services or overpay for features you don’t need, resulting in significant savings. 

Time is money and outsourced accounting services save you time. You won’t have to divert your focus from bigger picture ideas to small-scale finances anymore. When you focus on scaling your business more often, you will likely generate more revenue. 

It’s Too Much of a Security Risk

The thought of handing over part of your business operations to an outside company is understandably worrisome. However, since outsourced accounting firms have fractionalized teams, they have critical experience in multiple industries. 

Outsourced accounting services ensure security by understanding the most secure, advanced accounting software on the market. They protect your data with state-of-the-art data security systems and infrastructure that safeguards your data. 

Corresponding With the Outsourcing Firm Will Distract You From Core Business Principles

Part of the beauty of outsourced accounting firms is that they don’t require extensive correspondence. Of course, you should expect your outsourced accounting firm to issue current updates and be available when you need them. 

However, you don’t need to maintain constant correspondence with your controllers to do their job. Outsourced accountants are experts and they can fulfill their job duties with little supervision. 

Because you don’t have to keep constant contact with your outsourced accounting firm, you can focus on your core job principles, increasing revenue and productivity. The outsourced firm handles the mundane tasks and financial forecasts while you execute company-wide growth initiatives. 

You Need Your CFO/ Controller Department In-House

There’s a tendency to believe you need all of your employees in the same room as you. However, in the wake of the pandemic, the work-from-home business environment, digital accountants are more appealing than ever. 

Outsourced accounting services take advantage of the ability to conduct business from anywhere with an internet connection. You probably already outsource areas of your business infrastructure, including IT, marketing, and sales. Why should you limit your capabilities to the immediate geographical location of your business?

Outsourcing doesn’t mean your advising team won’t be present. It simply means they are an extension of your team. They work on your schedule and provide you with updates when you need them.  

You Need to Let All Your Staff Go If You Use an Outsourced Finance Department

Using an outsourced finance department doesn’t mean you will have to let go of your existing finance department. Many businesses use outsourced accountants to supplement their in-house accountants. 

Businesses can either fully outsource their accounting operations or turn to a hybrid model for their accounting. Hybrid outsourced accounting means you can keep one or two accounting employees on staff.

In these structures, your in-house team will advise your outsourced accountants and the two will work together to bring you the most efficient results. 

Outsourced Accounting Is Just Data Entry

While bookkeeping requires a substantial amount of data entry, outsourced accounting is a far more comprehensive solution. Outsourced accounting services give your business access to consulting services you can’t find with in-house accountants.

Outsourced accountants understand how to both generate complex reports and infer critical business initiatives from them. In smaller businesses, bookkeepers might have too many responsibilities. They might be tasked with generating reports and business analysis while also trying to uncover sources of revenue and capital. 

Outsourced accounting services give you access to professionals who focus on individual business areas. 

Can’t I Do Accounting by Myself?

If you are a CEO or owner of a small business, you have to wear many hats- that’s part of the game. However, there is a point of diminishing returns when considering limiting your responsibilities as a CEO. 

If you notice you can’t focus on your core business principles, it’s time to consider bringing in outside help. Accounting mistakes can be catastrophic and it’s not worth risking disruptive financial occurrences to save a few bucks. 

Tax compliance is a complex task in itself and minor mishaps can lead to detrimental effects. An outsourced accountant gives you the scalability you need and prevents you from overpaying for accounting services. 

Aren’t Bookkeepers Only Needed for Tax Purposes

Filing taxes, regardless of company size, can be confusing and complex. Additionally, most small business owners have multiple income streams. These small business owners might not claim any exemptions, understand tax credits, or itemizing deductions. 

Besides, these processes distract small business owners from doing what’s most important: running their business. An outsourced bookkeeper ensures all your tax information is correct and you get the most out of your exemptions, tax credits, and itemized deductions. 

Conclusion- Outsourced Accounting Misconceptions

The world of outsourced operations is somewhat new. However, with every passing year, it becomes more relevant to businesses looking to maximize their operations and ROI. Outsourced accountants’ scalability and expertise make them attractive alternatives to any business struggling to stay on top of their financial reporting and adequately plan for their future. 

At Fully Accountable, our team of full-service financial experts understands how to make the most out of your business’s finances. We issue clear financial reporting and can advise you on capital procurement opportunities. If you need a less comprehensive package, you can utilize our financial controllers to ensure tax compliance and productive bookkeeping tactics.  Regardless of your accounting needs, Fully Accountable delivers. 

Contact us today to discover what we can do for your business. 

Rachel Scava

Author at Fully Accountable

1-877-330-9401 fullyaccountable.com

Rachel Scava is the COO of Fully Accountable - a back office solution for outsourced accounting and finance services. Fully Accountable provides full back office services for eCommerce and digital based companies that are looking to grow and scale. Rachel has dedicated her career to helping entrepreneurs and owners reach their highest potential through human ROI. Having discovered that one of the most challenging things for any business is building a high performing team, Rachel has developed processes and procedures to help companies build, train and measure team members that become major assets to the organization. Rachel believes in the theory of Super Employee’s where you can turn any ordinary team member into an extraordinary one. Her passion is people and yours can be too!