Outsourced accounting has the potential to provide a business with the exact level of services needed for financial insights. The key is, how to properly execute it.
It’s incredibly common for a business owner to not be able to “let go”.
Understandably so, for an entrepreneur. Your business is literally like a non-human baby. It’s normal to feel some degree of apprehension to delegating, let alone entirely outsourcing a part of your businesses’ operation.
This fear of letting go is, in most cases, related to the perceived sense of losing control.
Difficult as it can be, the reality is that outsourcing presents many advantages that you can’t ignore. Advantages that go beyond cost savings. In order to calm the anxiety induced by outsourcing, here are 5 success factors you can use to keep track of to make sure your accounting outsourcing partner is truly helping you reach your goals.
Further reading: If you’re still on the fence about outsourcing your accounting, here’s our take on the subject.
1. Keeping track of what matters the most
We’ve all heard the ubiquitous “If you can’t measure it, you can’t improve it” quote. And when it comes to all things outsourcing it lies true once again. Since, to an extent, you don’t have the ability to go with your bookkeeper and ask “How is everything going?” you’ll need a better way to assess the performance of your outsourced accounting team.
This is where implementing a set of key performance indicators which measure their performance based on what you value from them can become useful.
The takeaway here is that you should focus on the metrics that matter the most for your business. Here are some examples of some KPIs you can use to gauge performance.
- Cost: This was probably one of the main reasons you considered outsourcing your accounting. As such, it should be measured against the projected cost of running your accounting in-house.
- Timeliness: Having updated books and consistent financial reporting can give you a huge strategic advantage in running your business. However, this advantage can be lost if the information is not delivered to you in a timely manner.
- Accuracy: This is without a doubt one of the cornerstones of an effective accounting practice. So it makes sense to keep track of the incidence of mistakes in the services that are provided to you.
2. Leveraging all available services
Knowing that your basic accounting needs are being taken care of reliably takes a huge weight off the shoulders of business owners. But this is only the tip of the iceberg, so to speak.
Most accounting firms have a wealth of expertise that you can leverage. Even if your business isn’t ready to use all the services the accounting firm you work with provides, it’s a good idea to know what they do. Here are some examples of the services accounting firms offer.
- Outsourced CFO: If you currently don’t have a CFO as part of your organization, it can be a great idea to outsource one. Having a CFO consultant is a cost-effective way to gain the expert financial insight your organization needs at a fraction of the cost of hiring one.
- Financial performance analysis: Having a team of experts go over your financial performance can give you incredibly valuable insight into the state of your business. Setting profitability and growth goals can be some of the areas where the advisory service can be useful.
- Implementing automation technology: There are a huge amount of financial technology solutions that you can implement to streamline your finances. The problem is that without the specialized know-how implementing this technology might be out of reach for your business. This is another area that you can rely on your outsourced accounting firm’s expertise.
3. Having effective communication channels
Losing the ability to simply go over and talk to the accounting guy/gal is one of the biggest fears of business owners. Just because your accounting team is now outsourced shouldn’t mean that your ability to get the information you need will suffer. It will likely be different, but not necessarily worse. Here are 3 aspects that you can keep track of when it comes to communication.
It’s always nice to have an accountant when you need one.
- Proactive vs reactive: Back in the day, it used to be thought that if your accountant was calling you was to give you bad news. That something bad had happened and that it would cost you money. This is not the case anymore. Today, most accounting firms have the technology and process infrastructure that allow them to raise a flag before something bad happens.
- Clear expectations: Knowing what to expect in how you’ll communicate with each other can make the biggest impact on how you work with your accounting outsourcing firm. Do they give you clear timeframes for replying to emails? Do you have dedicated hours for phone support? Can they reply quickly in case you have an emergency?
4. Being able to scale with you
Your business is going places, but will the outsourcing firm you’re working with be able to keep up? In many cases the answer will be yes. The real question becomes how quickly and how much will it cost you. The ability of your outsourcing partners to scale with you is important in order to know so that you can include it in your growth plans.
- Time to ramp up services: Knowing whether the firm you work with has enough bandwidth to ramp up on short notice or if they need time to ramp up is an important consideration. Maybe you start with basic bookkeeping and upgrade to next year’s budget.
- The right menu of services: As your business grows you’ll need additional services from your outsourcing partner. So knowing in advance what financial compliance and advisory services they offer will be immensely useful in your growth plans.
5. Are you the right fit for each other?
Finding a fit is perhaps the most difficult aspect to be objective about. Nonetheless, it’s an important one. The reality is that in the same way that not everyone is your client/customer, not every accounting outsourcing firm will be the right one for you. Here are a couple of aspects you can look into to know how much of a fit you are with each other.
- Customer service policy: This aspect is often overlooked, but how an outsourcing firm treats its customers and what policies they have in place makes a big difference in case something happens.
- Industry expertise: Depending on your business, this aspect can make or break the relationship with your outsourcing partner. If working with a firm that has extensive knowledge of your industry is paramount, then this will be an aspect that will rank highly in your priorities.
Outsourced accounting can get you to the next level
Outsourcing your accounting can be intimidating. It can even feel like you are relinquishing control. However, the advantages it can give you are significant.
If you ask the right questions and set clear expectations you can gain a partner that can help you take your business where you want it to go.
Feel free to reach out to us so we can get the conversation started on what your accounting needs are and how we can help.