There are plenty of compelling reasons to outsource the accounting operations of your business. You’ll have access to best-in-class software and proven accounting processes and procedures. You won’t have to spend timing recruiting and hiring accounting personnel who may or may not be a good fit for your company. And you’ll gain a depth of experience and sound strategic advice that can take your business to new heights of profitability. That all sounds great, doesn’t it? The hard part is ensuring that it actually happens. After all, accounting is an essential business function with a lot of moving parts. You can’t afford to just cross your fingers and hope everything works out. The process you use to migrate to an outsourced approach and sustain that relationship is absolutely critical. In this article, we’ll share four important secrets for achieving a smooth transition to an outsourced accounting function.
- Establish clear expectations. Think long and hard about your goals are and what you want to achieve by outsourcing your accounting. What’s working well? What frustrates you the most? Perhaps you’d like a more accurate reporting system or want to be able to easily track your profits. In all industries, outsourcing projects often fail due to ambiguous scopes of work. Being clear about your expectations from the onset will give your accounting partner a direction in which to work and will keep both of you aligned with your goals.
- Start with an assessment. A common reason that businesses seek out an outsourced accounting partner is because they realize they aren’t doing a good job on their own. The last thing you want to do is take ineffective accounting processes and hand them over to your outsourcing partner so they can continue to run them in the same dysfunctional way. Conducting a thorough assessment of your existing accounting system provides a necessary benchmark. Armed with an understanding your current processes and your vision for how they should work going forward, you and your outsourcing partner can make meaningful progress in developing a well-structured, efficient accounting system. The assessment phase should involve a comprehensive review of your organization and its ownership structure; the complexities of your accounting processes, such as number of employees and taxing entities; your company’s current financial health; and the financial infrastructure currently in place, including your accounting software, documented processes, chart of accounts, and more.
- Devise your new accounting operations strategy. Once your assessment is complete, it’s time to put all of that valuable information to good use. As the heart of your new relationship with your outsourced partner, this step is where the rubber meets the road. Your winning strategy should align with industry best practices and maximize your utilization of your software and
systems, such as:
- Ensuring that all core accounting processes are documented and re-designed, if necessary, to be their most effective
- Evaluating (or installing) your QuickBooks or other accounting software to ensure that its properly configured
- Establishing the key metrics that will be presented in monthly, quarterly and annual reporting
Taking this kind of strategic approach up front will help to ensure that you and your outsourced partner won’t encounter any unpleasant financial surprises down the road.
- Communication is the key. Effective communication is vital to all business dealings, but it can be easy to lose focus of its importance. Whether you’re speaking with a potential outsource partner about your company’s specific goals or need clarification about a financial report, it’s essential that you and your partner create and maintain an open, healthy line of communication. Establish channels of communication from the start, so both you and your outsourcing partner know where to turn in the event of an urgent situation. You can adopt a proactive attitude to addressing issues by holding meetings on a consistent basis and regularly communicating relevant information.
Outsourcing accounting services can be a great way for your company to optimize its operations while reducing overhead costs. If you’re looking to streamline your accounting processes and grow your business, you’ve come to the right place! Please contact Mary Jo to arrange a consultation at your convenience.