What Is Outsourced Accounting?
Businesses rely on outsource accounting providers for a host of different reasons: inability to locate accounting talent; business growth that requires quick, expert-level accounting assistance; wanting to maintain a small, essential workforce; maintaining low-cost operations by outsourcing accounting needs.
Outsourced accounting is a service that provides day-to-day accounting support in a part-time or fractional model. Those services can include a wide range of accounting functions including: accounts payable, accounts receivable, bookkeeping, payroll, cash flow planning, financial reporting, and outsourced CFO services.
Those are essential, business-defining responsibilities that many small businesses are unequipped to handle themselves. Even if a business owner has the skills, it is often not the best use of their time. Outsourced accounting services offer a cost effective way of getting the expertise that small businesses need to manage their finances and get the information they need to make good business decisions.
What is an outsourced accountant?
Imagining how outsourced accounting would look for your business might raise doubts: with the complexity and nuance surrounding your day-to-day business, how could you ever trust that responsibility to just anyone? With an outsourced accountant—one who understands how to maintain the integrity of your standards—you don’t. You have someone who is informed, dedicated, and trained to the degree that they could provide more than what you might typically expect from an accountant.
Part of an outsourced accountant’s skill is being able to quickly identify the workflow of your business. Identifying common practices in your business, learning notable differences or nuances in bookkeeping, and understanding how your accounting data can affect business decisions. A good outsourced accountant will also look for ways to improve operational efficiencies through technology enhancements or process improvements. A professional outsourced accountant can provide the same duties a full-time employee could provide, and more.
What is accounting outsourcing services?
When trying to understand outsourced accounting services meaning, some might assume, incorrectly, this is solely a bookkeeping venture—data entry, record keeping, some financial reporting—time-intensive and menial. Instead, accounting outsourcing services involve putting a trained eye on all aspects of your accounting and finance function to ensure it’s accurate, thorough, and error-free.
When handling responsibilities like invoicing, bill payment, cash flow management, and payroll, you need an accounting outsourced services team that understands the importance of the work they’re doing, and how this provides the foundation for good decision making.
What are the benefits of outsourcing accounting?
What happens when you bring in outsourced accounting into your business? Of course, this will all depend on what provider you work with and what needs you have to fill, but, when you find the right provider, outsourced accounting providers integrate seamlessly with your operations as they learn more about the responsibilities that need to be filled and how to improve your accounting practices.
Some outsourced accounting providers can also provide value-added benefits that include:
- A cost-effective accounting solution
- Expertise to implement best-in-class technology applications
- Timely and accurate record keeping
- Access to meaningful financial information to make informed decisions
- Expert guidance and a strategic sounding board for complex issues
Outsourced accounting providers should do more than fulfill the basic bookkeeping and record-keeping function for the company; they should identify opportunities to introduce process or system improvements that will drive increased efficiencies and a better user experience.
What is outsourced accounting really?
Some might associate outsourced accounting with other stereotypical cost-cutting measures for businesses—or, hiring out any non-essential business functions with more affordable options than full-time employees.
That’s an incorrect understanding of an outsourced accounting meaning, or its definition. Instead, think about outsourced accounting as a specialized, highly-trained team to help your business do more with your back office functions. By hiring outside accounting experts, you’re gaining innovation, specialization, and strategic consulting that will give your business a competitive advantage.
What companies outsource accounting?
As more and more companies adjusted to the majority of their workforce working from home, they had to start improvising certain business functions—including accounting and HR. Some adjusted well, some didn’t. And now you see more companies looking to outsource accounting to help them navigate the new playing field.
Milestone provides outsourced accounting services for businesses to handle cash flow forecasting, bookkeeping, monthly accounting, and even CFO-level financial guidance—specifically suited for your business. Their team of trained professionals has experience improving businesses by providing an outside perspective, identifying potential, and using best-in-class financial tools to improve business performance. Curious about the type of service we could provide your business specifically? Learn more today.
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