Before discussing why outsourcing accounting services is the growth engine for CPA firms, we should have an understanding of what outsourcing is.
Outsourcing is hiring a party outside the company to perform services or create goods previously performed in-house by the company’s employees and staff. Outsourcing is a technique that many businesses use to save money. As a result, it can impact a wide range of jobs, from customer service to manufacturing to the back office.
A CPA firm is an accounting firm with at least one Certified Public Accountant who is licensed in their state. Advancement in technology, globalization, and regulation changes has posed many challenges to CPA firms. One such challenge is balancing the firm’s business growth with completing accounting tasks. However, outsourcing is the solution for big accounting firms in the US. It helps to make better financial decisions and optimize returns.
How does Outsourcing Accounting Services benefit CPA Firms?
CPA firms should outsource their accounting needs for several reasons. Aside from staffing issues, CPAs face multiple other challenges, including increased market competition, inflation, a shift in working models, and the possible return of the coronavirus pandemic.
Let’s look at the top reasons for accountants and CPAs to consider outsourcing accounting and bookkeeping services:
- Cost Effective: Huge expenses already incurred due to personnel, office supplies, software subscriptions, furnishings, etc. If your CPA firm experiences growth in business and clientele and you realize the need to expand your team and infrastructure, the rise in overhead costs will be a significant obstacle. However, outsourcing may be a more practical approach to solving this problem. For example, by outsourcing some of your projects to a trustworthy service provider, you may efficiently manage the workload without growing your crew, purchasing computers, or moving to a different location for larger office space.
- Pro-Active Approach: – As an owner or CEO of the CPA firm, you can’t be the financial professional overseeing the books. You must run your business and focus on the business’s growth, development, and vision. Having an outsourced accounting team will provide you the advantage of proactivity, where they can spot the red flags and notify you about them so that you can make more effective and efficient decisions.
- Access to the latest technology: – Most CPA firms find it difficult to constantly upgrade to the latest software tools as it can be financially draining and require more personnel training. But outsourcing companies invest in the latest technologies to attract more clients. As a result, they have more upgraded software and ensure expert handling of the tasks.
- Hassle-Free staffing: CPA firms are most affected by the growing talent shortage in the US accounting industry. Finding newly qualified accountants is challenging, but retaining existing staff is difficult. Outsourcing companies understand the staffing criteria of the US accounting industry and choose their team accordingly. As a result, you won’t have to hire more and can pay for the work done by the outsourcing company.
- Economies of Scale: Outsourcing offers a more elastic solution to CPA firms as it helps them from worrying about finding temporary staff during peak season or scaling down when the season ends. Outsourcing accounting companies can be easily mounted as per business needs.
- Better Internal Controls: – Your in-house accountants can be reassigned to your clients’ projects when you outsource bookkeeping and accounting to a qualified, experienced service provider firm. This helps to ensure that high-quality work is completed with the input of several CPAs. As a result of the necessary checks and balances created by your outsourcing partner, your company’s internal controls are strengthened, and errors that could result in expensive consequences like fraud are also avoided. Additionally, you receive a second team to examine your business and search for warning signs in its accounting procedures.
- Gain Competitive Advantage: – With outsourcing, CPA firms can get an advantage over rival businesses by expanding their service catalog and providing clients with high-value services. They can provide the services your customers expect but which you do not provide by using outsourcing. As a result, it enables you to increase clients, workload, revenues, and sales for your company.
By outsourcing accounting services, CPA firms will have many benefits. Outsourcing firms can help you reduce your costs while improving efficiencies, better analyzing operations, and providing data security and a highly qualified and dedicated team working with and for you. If you are not a CPA firm, there are still many reasons you should outsource accounting services. Learn When and Why You Should Outsource Your Accounting.
Written by – Khushboo Batra
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