Why You Should (Probably) Switch to Outsourced Accounting
How can outsourcing save you time and money while helping you navigate today’s fast-paced market?
It’s Friday night. You’re tired, you’re hungry, and the only thing you want in this world is a really good pizza.
A) Order a pizza from your favorite restaurant. Or:
B) Hire contractors to build a pizza oven in your kitchen, then connect with a supplier who can provide fresh dough, sauce, cheese, etc. Then, pay the full-time salaries and benefits of a team of skilled chefs, all so they can bake pizzas for you on Friday nights.
Unless you’re extremely patient, flush with cash, and hopefully not too hungry, you’ll probably go with Option A and order a pizza. In other words, you’ll outsource your pizza-making needs to an organization with the resources, expertise and infrastructure to make high-quality pizza at an affordable price. (See where we’re going here?)
You could make the pizza yourself. But why would you, when outsourcing is so much more efficient and effective?
What pizza chefs & accounting pros have in common
Whether your organization is a manufacturer, a medical service provider, a nonprofit firm, or practically any other kind of business, chances are good that you outsource some of your functions already.
Of course, there are certain core services that you will always keep in-house, the services that are your bread and butter (dough and sauce, if you’re still thinking about pizza). But there are several functions that have little or nothing to do with your core service that are nonetheless necessary.
One of the most obvious is accounting. Every business needs some level of financial management, whether it’s an international corporation or that really good pizza shop on the corner. While the complexity and scope of the accounting functions a business needs may vary widely, every business needs the support of a professional accountant. At the same time, not every business needs (or can afford) to hire a full-time, in-house accounting team.
In fact, many businesses can cut costs, save time, reduce hassle, and unlock new and necessary capabilities by outsourcing their accounting.
What is outsourced accounting?
In recent years, more and more businesses have turned to outsourced accounting.
But before we explore why, let’s define that term.
“Outsourced accounting” is when a business hires an outside accounting firm to handle some or all of its financial management. This could mean that the firm replaces the need for an in-house accounting team, saving the business the time and money, as well as the hassle of hiring and retaining financial professionals.
Or, as is the case with many mid-sized businesses, it could mean that the outside firm supports an in-house accountant or small accounting team, providing specialized services beyond the capability of the in-house accountants. Many businesses have excellent in-house accountants who know the businesses better than any outsider ever could. However, they may need some help navigating complex interstate tax codes, creating in-depth business strategies, and performing other services for which they may not have the time or expertise.
Another thing to note: Although it’s popular, the term “outsourced accounting” can be somewhat misleading. Often, the scope of outsourced services goes well beyond what many consider “accounting.”
For example, at Dugan & Lopatka (one of the leading accounting firms in DuPage County, Illinois, providing business accounting in Chicago and beyond) we provide basic bookkeeping services for our outsourced clients. However, for many clients, we go well beyond basic, traditional accounting to provide controller- and even CFO-level services.
That includes cash-flow management, forecasting and budgeting, bank monitoring, monthly financial review meetings, audit preparation, and more. Basic accounting is just the beginning.
Why should you consider outsourcing?
Back to our question: Why are so many businesses turning to outsourced accounting, and why now?
Outsourced accounting is nothing new. While the term has been used more frequently in recent years, businesses have long outsourced their financial management needs to professionals outside their company.
However, recent market conditions have expanded the demand, scope and nature of outsourced accounting. Today, outsourcing some or all of your accounting services is essential to staying competitive.
Outsourced firms have the flexibility and skillset for a complex market.
One of those new market conditions is the increased rate of change. While it has become something of a cliché to point it out, markets across every industry really are changing at a more rapid pace than ever. That’s due to a range of factors, from increased connectivity and technological innovation to major events that send shockwaves through markets and supply chains.
The bottom line is this: Things are moving faster. Business is becoming more complex. And small in-house accounting teams are, understandably, struggling to keep up.
As a result, more organizations are outsourcing some or all of their business accounting needs to firms with the flexibility and expertise to handle rapid change and increased complexity. When a business outsources to accounting firms, the firms may have access to a diverse team of domain experts who can help navigate unexpected disruptions, whether they come from within or beyond the business’ industry.
Cloud-based accounting software allows outsourced teams to manage your finances remotely and securely.
Another reason why so many businesses are investing in outsourced accounting is technological.
Cloud-based accounting software has been around for decades. However, many organizations today are becoming increasingly comfortable with remote work and cloud-based solutions, both of which are fundamental to outsourced accounting.
At Dugan & Lopatka, our outsourced accounting team uses state-of-the-art, cloud-based software. This software allows our clients to store and access their real-time financial information in a secure, encrypted cloud environment. Meanwhile, our accountants can tap into your data to manage bookkeeping, monitor cash flow, create strategies, and perform other services.
With cloud-based accounting software, you can access your business’ information anywhere there’s internet. It’s easy, it’s paperless, and it’s significantly more secure than storing your valuable data on a desktop.
Outsourcing helps you cut costs and simplify.
A third and final reason why so many businesses are outsourcing is pretty simple: It’s a competitive market out there. To keep up, you need to cut costs, reduce complexity, and add some much-needed predictability to your operations.
Hiring, expanding and retaining an in-house team can be challenging for a number of reasons. First, it’s expensive; good financial professionals are attracted to good salaries and benefits. It can also be difficult to find the right accountants to build your in-house team, particularly if you aren’t an expert in accounting.
Also, an in-house team, while good for some businesses, can be unpredictable. You may have an accountant who knows the ins and outs of your business. But, if this essential employee decides to up and leave your business tomorrow, you will have to find and retrain a new accountant. Who knows how long it will take for them to catch up?
Outsourcing helps you cut down on those costs and complexities.
At Dugan & Lopatka, we charge our clients one simple monthly fee based on their service structure. For that reliable, affordable monthly cost, you get access to all the accounting services you need. You never need to hire a new accountant. Dugan & Lopatka has excellent retention, and even if your key point-of-contact leaves our firm, our team will be able to smoothly and easily transition your account without disruption to your services.
We also offer greater flexibility than any in-house accounting team. You can always expand your scope of services with us—for example, you could move from basic bookkeeping services to CFO-level solutions.
Plus, each of our accountants is backed by the entire Dugan & Lopatka firm. If they need to help your business navigate a situation outside their expertise, they can always consult with other domain experts within our firm.
When you outsource with Dugan & Lopatka, you are gaining access to an entire collaborative team with expertise across a wide range of domains.
Looking for outsourced accounting? We can help.
One of the leading accounting firms in the Chicago suburbs, Dugan & Lopatka provides outsourced accounting in Chicago, IL and surrounding areas.
Our team provides a complete range of outsourced financial services for mid-sized businesses, including:
- Transactional (Bookkeeper-Level) Services, such as cloud-based bookkeeping, payroll, accounts receivable/payable, tax preparation, and expense reimbursements.
- Controller Services, such as financial reports, audit preparation, policies and procedures, and more.
- CFO Services, such as forecasting and budgeting, major business transactions, cash management, strategic planning, benchmarking, and more.
Our outsourced accounting services are designed to help you save time, save money, and gain access to a wide range of financial solutions and expertise. To learn more, explore our outsourced services here.