Outsourced accounting, what’s it all about?
Outsourced accounting is a service that provides a full, accounting department experience for businesses and nonprofit organizations without the appropriate resources for an accounting department or who are frustrated with the cost and effort put forth to staff their existing accounting department.
A typical accounting department handles the day-to-day transaction coding, accounts payable, accounts receivable, payroll, and financial reporting. A company can now farm out all these functions or customize what they need. Many business owners are finding that outsourcing provides a unique opportunity to receive accounting support from talented professionals without the added overhead associated with in-house resources.
These processes are now available thanks to both technology and your work habits. The business world is now all about being flexible and not being strapped to a desk. Instead of having to be in the office to approve payments or review a contract, you can now simply access that information from any mobile device including laptops, tablets or the palm of your hand via your smartphone. Accounting firms can also keep up with you by using internet-based accounting software to provide you with real time accounting and bookkeeping services. This technology allows you and your accountant to have secure, real time, access to your accounting data from anywhere.
So, how does it work? It all starts with an accounting department procedures review. The accountant should meet with you and ask detailed questions about how each accounting function is currently performed. Once this is understood the accountant should come back with an analysis of how the processes can be improved and explain how they would perform each of these services.
Let’s focus on four key areas for now:
Invoicing and A/R:
Invoicing is prepared, deposits are posted, and receivables are tracked within the online accounting software. If a third-party billing software is utilized, then this information is imported into the on-line system.
Bill Payment and A/P:
Vendor bills are approved and paid electronically. The voucher and approval process are customized to fit your needs. You no longer need a paper voucher, approval and check writing process to move around the office at a snail’s pace, the entire process can be done online from anywhere.
Payroll services have been offered online for some time now either through a third-party payroll provider or as part of an accounting software package. You can turn the payroll processing relationship over to your accountant or provide him with secure access to your online payroll reports.
Month End Accounting:
Your accountant can now reconcile accounts and prepare timely financial reports because all the data necessary to close the books has already been captured and coded in the system. The timeliness of the information can now allow you to have that monthly phone call or quarterly meeting with your accountant to go over the financial results and discuss new business opportunities.
There are many benefits to outsourcing accounting but the most important is that it reduces costs. You are only paying for the accounting help you need when you need it with no employee related cost to deal with.
If you are considering outsourced accounting, make sure to find a firm that can help you with your current and future needs. You should be able to collaborate with them to come up with the best solution to tap into their accounting expertise while saving your organization both time and money.
Written by Leo Misdom, a principal in Dugan & Lopatka’s Outsourced Accounting Department. Leo can be reached at (630) 665-4440 or firstname.lastname@example.org.