One of the critical decisions you make as the owner of a CPA firm is whether to invest in building an in-house finance and accountancy team or using the flexibility of outsourced expertise. Both approaches can be beneficial, but what you choose depends on your firm’s goals and circumstances. Let’s take a closer look at how to strike the right balance.
When to Invest in In-House Talent
- Lead accountants who manage primary client engagements
- Partners and senior managers responsible for setting the firm’s vision
- Strategic advisors shaping long-term direction
- Ongoing tasks requiring regular attention
- Roles where the cost of repeated outsourcing exceeds employee salary
- Functions that need direct oversight and quality control
When Outsourcing Makes Sense
When to Start Outsourcing
Firms typically explore outsourcing when facing capacity constraints, specialized project needs, or the growth trajectory is likely to exceed the current team’s capacity or expertise. Outsourcing allows the firm to scale without overextending permanent hires.
If your firm needs specialized assistance for a client or project, or if you need extra support at peak times, outsourcing is a useful option. Some key scenarios where outsourcing works well include:
- Busy Seasons
During peak seasons, outsourcing gives you the flexibility to cover increased workloads without overextending your in-house team. You can avoid burnout and turnover because outsourcing allows you to:- Add resources to match the demand
- Maintain service quality without committing to permanent hires
- Free in-house staff to concentrate on strategic priorities and client relationships
- Specialized Expertise
Outsourcing can give you access to the right expertise when projects call for advanced skills or niche knowledge or when a client needs something that is outside of your regular services. This is especially helpful for:- Complex tax compliance cases
- Compilation preparation for financial statements
- Specialized audit requirements, such as Healthcare and nonprofit audits
- Technical accounting challenges or specialized financial analysis, including Employee Benefit Plan (EBP) compliance
- Staffing Gaps
Temporary staffing gaps are easily covered with access to trained and experienced professionals, and you don’t have any of the lead time needed for hiring and onboarding a new staff member.
- Routine Tasks
Repetitive tasks that don’t need strategic input are well-suited for delegating to an outsourced team. Outsourcing these routine accounting duties frees up your in-house team to focus on higher-value or more strategic tasks. Routine accounting work might include:- Bookkeeping and payroll processing
- Data entry and transaction recording
- Project-based financial analysis
- Time-Sensitive Needs
Whether you need to meet a tight deadline or address an urgent client need, outsourcing to an expert can save the day. Working with an international partner can be especially useful here as different time zones allow for a 24-hour working day, giving you a faster turnaround.
For more information on assessing whether outsourcing could work for your firm and to ensure a successful partnership, take a look at our CPA Firm’s Guide to Outsourced Finance and Accounting.
Addressing Common Concerns with Outsourcing
- Time Zone Differences
CPA firms sometimes worry that working with a team in a different time zone will slow the work process down. In fact, many outsourcing firms, including Scrubbed, ensure there is some time overlap for essential meetings but also work through the US nighttime to give your firm what amounts to a 24-hour workday.
- Training and Onboarding
There is a concern that training and onboarding will be too time-consuming. However, your outsourcing partner will provide dedicated account managers and well-trained and experienced professionals familiar with CPA firm processes. With the right people in place, it is easier to integrate outsourced teams into the firm’s day-to-day operations.
- Knowing When to Outsource
Sometimes, CPA firms feel they’re “not ready” for outsourcing, feeling that they must reach a particular size or level of sophistication before outsourcing becomes appropriate. In reality, firms of all sizes can gain from outsourcing accounting or financial tasks, whether that means handling busy seasonal periods or expanding the firm’s client offerings. Firms can begin with low-risk functions like bookkeeping or tax preparation to get a sense of how outsourcing could work for them.
- Data Privacy
Data privacy and security are vital, and it is understandable that CPA firm leaders might be hesitant to share financial data with a third party. However, professional outsourcing companies put in place rigorous security measures, including SOC 2 reporting, data encryption, and access controls.
Key Factors to Consider
- Cost Efficiency
Outsourcing often provides a more cost-effective solution to in-house hiring or traditional firms. This can benefit firms looking to lower costs without compromising service quality.
- Quality Assurance
Reputable outsourcing providers ensure their teams meet rigorous qualifications, but it’s essential to screen providers thoroughly to ensure their standards match yours.
- Data Security
Vet your potential provider for SOC compliance and encryption standards. You’ll need someone who can support and enhance your data privacy and security processes.
- Aligning with Your Firm’s Vision
Sustainable growth goes beyond the immediate need to complete a project or the demands of this year’s tax season. The most effective strategy is the one that helps your firm deliver consistently high-quality service, adapt to changes in the market, and build operational flexibility in case of changes in workload or staffing.
How Scrubbed Can Help
Growing your CPA firm sustainably isn’t just about adding capacity. It’s about creating a resilient practice that can navigate market changes and take advantage of opportunities. We help our partners onboard the right professionals to help the firm grow while maintaining quality service levels for clients. You can enjoy the benefits of having a full team without incurring all the expenses of hiring in-house staff or worrying about finding replacements if someone leaves unexpectedly.
Whether your firm needs seasonal help with audit, tax preparation, and filing or ongoing assistance with tasks like tax compliance and risk advisory, transaction advisory, valuation services, technical accounting, and external and internal audit support, the Scrubbed team has the capabilities and expertise to meet those needs.
