Businesses across the board are under pressure to ensure financial transparency and maintain compliance with ever-changing financial regulations—causing many to turn to their CPA firms for a greater degree of support. But in a tight labor market like we’re experiencing now, expanding your capacity to meet your clients’ growing needs can be a challenge.

Before you scale your operations, you need to decide the best approach: 

• Should you hire more employees to handle the overflow of finance and accounting* tasks?
• Should you outsource the work to a qualified third party?
• Or should you take a blended approach, adding in-house staff supplemented by support from an outsourced provider?

There are advantages to hiring in-house employees and advantages to contracting with a third-party provider to handle your expanding accounting* and finance workload. The right answer for your CPA firm will depend on your specific goals and needs.

Factors to Consider

If your CPA firm is looking to scale as your client base grows or just needs more resources to navigate peak periods, considerations like these can guide your decision on whether to hire an employee, outsource the work to a third-party provider, or take a blended approach. 

Budget.

Your available budget is always a factor when determining whether to hire in-house or outsource some of your accounting* and finance tasks. If you’re considering a full-time hire, look beyond salary when calculating the associated costs; other expenses like payroll taxes, health insurance, vacation time, 401k contributions, and other benefits, along with office space and equipment, will add up considerably. If you outsource the work instead, you’ll avoid those costs, paying only for the services you need, when you need them. To ensure you don’t overspend, it’s best to obtain pricing from multiple outsourced providers as part of your due diligence.

Range of Services.

One of the benefits of outsourcing accounting* and financial work is that a third-party firm typically can provide a wide range of services, including accounting*, auditing, payroll, tax support, and more. It’s tougher to find a single employee with the skills and experience to cover all those bases effectively—and you may not have the luxury of hiring more than one employee. You’re more likely to get the full scope of expertise and services you need to expand capacity and handle a growing workload by hiring an outsourced team. It’s like getting a full team’s expertise for the price of one, enabling your budget to go further. You could also opt to take a hybrid approach—hiring internally for some tasks, like bookkeeping, while outsourcing others, like payroll or tax preparation.

Company Culture.

When businesses consider outsourcing tasks to expand their capacity and augment their internal teams, they may have concerns about maintaining the organization’s culture. For instance, if your CPA firm prefers face-to-face meetings, you might believe an internal hire is the only way to go. Or if you like direct control over your finance and accounting* tasks, you might believe it will be easier to connect with and evaluate a staff hire. While you will always have greater control over an internal employee than a third-party provider, outsourcing companies are skilled at adapting to the culture and work style of their clients’ organizations. And in some cases, they may be more adaptable than an individual who comes to the job with a history of working a certain way. Whether you hire in-house, outsource, or do a mix of both, you’ll need to ensure your new resources understand your culture and know how you prefer to work. 

Availability.

Completing the work on time is essential when it comes to accounting* and finance tasks. Consider the impact if payroll doesn’t go out on schedule, for example. Whether you hire in-house or contract with a third party, those resources must have the availability to handle all the assigned tasks and responsibilities on time. When you hire in-house, you can set certain work hours (although traditionally, those fall somewhere around the 9am to 5pm schedule) and you can determine how great a workload your employee takes on.

On the other hand, an outsourced team may be nimbler at meeting deadlines and managing multiple tasks than a single employee. And they typically work outside the traditional 9am to 5pm schedule to cover clients in multiple time zones, which means your work may be in progress beyond your traditional office hours. No matter which route you take, always discuss availability and work schedules upfront to ensure the best coverage and avoid surprises.

Fraud Risks. 

Fraud is a major headache for businesses of all sizes—with US companies losing an average of five percent of gross revenue to fraud, according to the Association of Certified Fraud Examiners. Small businesses and private companies see the highest incidence, yet they may not have the same depth of fraud prevention resources and stringent processes as an outsourced provider.

It’s helpful to evaluate your fraud exposure, assess your preparedness to prevent or minimize fraud, and determine whether an internal hire or an outsourced partner can best help you address this growing area of risk.

Choosing the Right Outsourcing Partner 

If your CPA firm decides that outsourcing is the best way to expand your capacity, augment your staff, and scale your business to capitalize on growth opportunities, it’s important to vet and select the right outsourcing partner. When making a list of companies to evaluate, be sure to include Scrubbed!

Our professional team offers comprehensive and flexible financial services, including general ledger maintenance, bank reconciliation, cost accounting*, systems implementation, financial reporting, payroll set-up and support, and more.

To learn about our highly effective approach to outsourced finance and accounting*, contact us at [email protected] or 800-837-5160.