What Type of Financial Services are Outsourced?
Businesses that reach their capacity for financial and accounting performance and don’t want to add new hires or invest internally will often outsource some or all of their needs to expert financial outsourced accounting providers.
There are several benefits to outsourcing, including saving costs on hiring, managing, and training employees to offer high-level financial guidance. But, more companies are outsourcing these responsibilities to grow their business with real experts.
You might think of this as utilizing a special forces unit of finance—a team capable of financial advising and management that would require far too much time and capital to create yourself. But is this the right move for every company or business owner who realizes they need to put more focus and attention on their financing? And what types of services can you outsource?
What is finance and accounting outsourcing?
Any time a company needs to rely on hiring outside team members, consultants, advisors, or experts to help with an aspect of finance and accounting, that’s financial services outsourcing. Think of it as utilizing a team of hired guns that are experts at finance and accounting.
Oftentimes, a project or season of growth can lead you to outsource certain finance and accounting needs temporarily with the understanding that your outsourcing needs aren’t long-term. Even just using an outsourcing provider temporarily during tax season can be beneficial. What your business needs specifically will define your outsourced financial services meaning.
What is outsourced finance?
Payroll, budget, monthly accounts, CFO strategy, forecasting—a good outsourced finance team will investigate the various financial facets of your business to learn the cash flow process, identify efficiencies, and even make changes to your business that will save you money in the long and short-term.
This comes from the vast experience you get when you hire an outsourced financial services provider. Their understanding of your business’s cash flow is unbiased and independent, and they also come with a vast knowledge of how businesses of your size and type run their finances.
Should finance be outsourced?
Many businesses will only outsource part of the financial and accounting needs they have. Small and mid-sized enterprises might see growth that they don’t want to hire new employees for. The training and expertise needed might surpass an annual or quarterly budget. In these cases, outsourcing finance makes a lot of sense, especially if it’s only to meet a tentative bookkeeping or accounting need. When that growth is consistent, or business exceeds temporary needs, that’s when you can reevaluate whether or not outsourcing is the right long-term strategy for your finance needs.
Can finance be outsourced?
The running worry is that your business’ financials are too complex, nuanced—or maybe just so poorly kept-up—that an outsourced financial provider wouldn’t be able to help. This is the theory that too many cooks in the kitchen will only complicate things further. In reality, any business’s financial responsibilities can be outsourced. The key is to determine the amount, type, and timeframe you have to work with.
Decide what type of services you want outsourced.
If your worry is that your financials are too nuanced, complex, or disorganized, start with one outsourced service, like accounts payable/receivable, to define what that help would do. Then, after a period of time, evaluate to see if the outsourced provider could take additional responsibilities off your hands.
Decide your timeframe.
Depending on the type of service you want to outsource, define how long you want that trial period to be—whether that’s a year of accounts payable/receivable, or even receiving CFO strategy advice for a quarter. That will help you portion out the responsibilities you want to outsource.
Decide on specialization:
Your business might have a specialized need you aren’t sure how to fill. A good outsourced financial services provider can consult with you preliminarily to evaluate your business and advise what services you might want to outsource.
What finance function can be outsourced?
Below is a list of accounting services an outsourced financial and accounting consultant can provide, but don’t let this restrict the conversation. Depending on your business and the provider you consult with, you might find there are more services they can provide.
- Payable/Receivable Accounts
- CFO Strategy
- Budgeting Strategy
- Month’s Close
- Annual and quarterly finance strategy
When you’re ready to look into outsourcing the types of financial services that would be better handled by a provider with an outside perspective, contact Milestone, who can identify inefficiencies and suggest improvements to your cash flow process. We work closely with you and your team to strategize cash flow management, provide CFO-level advising, and help streamline your processes. Contact Milestone today to learn more.
monthly bookkeeping services
monthly bookkeeping services
How do I set up an accounting system for a small business?
Stay in the know