By: Arlene Meyers
Key Takeaways:
- Before searching for an outsourced accounting provider, evaluate your business’s specific accounting requirements, including functions to outsource, transaction volume, compliance needs, and budget constraints.
- Look for providers experienced in your business size and industry, check credentials, certifications, and client reviews to gauge reputation and reliability, and narrow down candidates aligned with your goals.
- Inquire about communication frequency, problem-solving procedures, billing practices, monthly reporting format, and how providers integrate with your internal finance team or you directly.
For many business owners, managing finances can be a daunting task. From bookkeeping to payroll to tax preparation, the responsibilities can become overwhelming. After all, except for bookkeepers and accountants, no one starts a small business in order to do bookkeeping and accounting.
This is where outsourcing accounting services can make life easier for owners of small or medium-sized businesses. By partnering with the right outsourced accounting provider, business owners can streamline financial processes, gain valuable insights and focus on their core operations.
Businesses outsource their accounting tasks for a variety of reasons, primarily to free up the owner to focus on operations or to take pressure off the internal finance staff. For many businesses, finding qualified finance professionals to fill internal jobs is getting increasingly difficult.
Finding the right outsourced accounting provider for your business will take some preparation and work. Following is an overview of the steps you need to take to ensure you find the right provider.
Assess Your Needs
Before diving into the search for an outsourced accounting provider, take the time to assess your business’s specific accounting needs. Consider which finance functions you want to outsource first. Many organizations start by outsourcing accounts payable and accounts receivable, then move on to more functions.
Additionally, consider factors such as the volume of transactions, the complexity of financial reporting, compliance requirements and your budget for outsourcing services. Understanding your needs will guide you in finding a provider that offers tailored solutions to meet your requirements.
Many outsourced accounting providers are individuals who provide bookkeeping, bank and credit card reconciliation, accounts receivable and accounts payable and other basic functions.
For more sophisticated functions, accounting firms – including KRD – offer Client Advisory and Accounting Services (CAAS) that include fractional CFO-level and controller-level services that can aid business owners in drawing strategic insights from their financial data. CAAS services can also include more basic functions provided on a fractional basis. The advantage of working with an accounting firm CAAS department is seamless integration with the firm’s tax professionals.
Research Potential Providers
Once you have a clear picture of your accounting needs, start researching potential outsourced accounting providers. Find a provider who is experienced in your space. If you own a small or medium-sized business, seek an accounting and advisory provider that specializes in small business accounting. The same applies to non-profits.
If possible, look for providers with experience working with small businesses in your industry. Check their credentials, certifications and client reviews to gauge their reputation and reliability. Narrow down your list to a few promising candidates that align with your business goals and values.
Learn About Client Service
Before engaging outsourced accounting and advisory services, ask how your provider works with clients like your organization.
- How will they work with your internal finance staff or with you directly?
- How often will they be in communication?
- What are their procedures for dealing with problems that may arise?
- What are their billing practices, and how will they handle additional billings that may arise from unexpected problems?
- What will their monthly reports look like?
Evaluate Services Offered
Evaluate the range of services offered by each potential provider. Beyond basic bookkeeping and tax preparation, consider additional services such as financial analysis, budgeting, cash flow management and strategic financial planning. A comprehensive suite of services will ensure that your outsourced accounting provider can support your business’s long-term growth and success.
Assess Technology and Security
In today’s digital age, technology plays a crucial role in accounting processes. Ensure that the outsourced accounting provider you choose utilizes advanced accounting software and tools that are compatible with your existing systems. Additionally, prioritize security measures to protect your sensitive financial data. Inquire about data encryption, secure cloud storage and compliance with industry standards such as GDPR or HIPAA, depending on your location and industry.
Moreover, if you haven’t upgraded your internal accounting software in several years, select an outsourced accounting provider who can advise you on an upgrade based on your business’s needs. With growing cybersecurity concerns, as well as rapid advances in software capabilities that require the most up-to-date hardware, your business can’t afford to operate on an outdated financial technology platform.
Review Pricing and Contracts
Before finalizing your decision, review pricing structures and contract terms with each potential provider. Compare pricing packages based on the scope of services offered, billing methods (hourly rates, monthly retainer, per-project pricing) and any additional fees or charges. Pay attention to contract terms, including termination clauses, confidentiality agreements and service level agreements (SLAs) to ensure transparency and avoid any surprises down the line.
Seek Recommendations and References
Finally, seek recommendations from fellow owners of small and medium-sized businesses, industry peers or professional networks. Personal referrals and testimonials can provide valuable insights into the quality of service, reliability and client satisfaction of potential outsourced accounting providers. Don’t hesitate to ask for references and follow up with past or current clients to get a firsthand perspective on their experience.
In conclusion, finding the right outsourced accounting provider for your small or medium-sized business requires careful consideration, research and assessment of your specific needs. By following these steps and choosing a reputable and experienced provider, you can streamline your financial processes, gain valuable insights and drive the success of your business.
Contact your KRD advisor for a consultation. KRD’s Client Accounting and Advisory Services professionals work with small and medium-sized businesses just like yours and will put together a menu of services tailored to your needs.
