Outsourced Accounting for Biotech Companies
As a biotech leader, you’re driving innovation, securing funding, navigating complex regulatory landscapes, and overseeing the financial health of your company. But, managing the day-to-day accounting tasks like tracking R&D expenses, preparing investor-ready reports, and ensuring compliance can eat into valuable time that could be better spent on advancing your research and strategic goals.
That’s where outsourced accounting and finance support comes in. Outsourcing some or all of your accounting and finance tasks to accountants with biotech-specific expertise allows you to focus on accelerating scientific breakthroughs and growing your business. With the right partner, you can streamline your financial operations, improve compliance, and deliver even greater value to your stakeholders.
Introduction
Introduction
For many businesses, the challenge of keeping up with the intricacies of financial management, from regulatory compliance to strategic financial planning, can divert valuable resources away from their core objectives. This is where the concept of outsourced accounting and finance comes into play, offering a solution that not only alleviates the burden of day-to-day financial tasks but also empowers businesses to focus on growth and innovation. Whether you’re exploring the benefits of partnering with external financial experts for the first time or considering a fractional approach to enhance your strategic capabilities, understanding the scope, benefits, and dynamics of outsourced accounting and finance is essential.
The competitive landscape for CPA firms is demanding. You need to offer a wider range of services, cater to complex client needs, and navigate staffing challenges. According to a survey by alliantTalent, 74% of CPA firms are introducing fully remote roles, and 79% are using technology for basic tasks.
What is outsourced accounting and finance support for biotech companies?
Outsourcing your accounting means partnering with a third-party team with deep experience in the needs of biotech organizations. You get immediate access to well-qualified support for everything from routine tasks like bookkeeping, accounts payable and receivable, and payroll processing to more complex R&D cost tracking, tax credit optimization, and compliance management.
Outsourcing is scalable and flexible, so you can access the exact services you need without the costs or challenges of hiring in-house specialists. Whether your company is in the early stages of development, running clinical trials, or preparing for commercialization, your outsourced accounting team adapts to your firm’s needs.
Learn more about our Biotechnology Accounting Services to see how Scrubbed can support your business.
Are outsourced accounting and finance services for biotechs provided by a person or a team?
Outsourced services for biotech companies are typically delivered by a team rather than a single individual. This team-based approach ensures you have access to the specialized expertise needed to manage and streamline all the complexities of biotech accounting, such as R&D cost tracking, and regulatory compliance with applicable accounting standards. . Outsourcing to a team also provides scalability, allowing you to adjust the type and level of support as needed, from day-to-day bookkeeping to strategic financial planning.
For smaller biotech firms or startups, fractional CFOs often collaborate with outsourced teams to manage financial operations effectively. This setup allows the CFO to focus on high-level strategy while the outsourced team handles routine tasks like payroll, tax compliance, and financial reporting.
What are the key benefits of outsourcing accounting for biotech companies?
Advanced Technology: Outsourced firms have experience with a wide range of tools and technology that may be cost-prohibitive for smaller companies to use. They can implement systems to streamline financial processes, including reporting and compliance tracking.
Scalability: Funding rounds, clinical trials, and commercialization efforts can all affect your biotech’s activities. Outsourcing allows you to scale services up or down as needed to match your needs and the company’s growth trajectory.
Focus on Innovation: By delegating time-consuming financial tasks to experts, you free up internal resources to focus on high-value research and development activities.
What services does outsourced accounting include for biotech companies?
- Bookkeeping: Accurate record-keeping and reconciliations for day-to-day transactions.
- R&D Tax Credit Optimization: Maximize savings by identifying qualifying expenses and managing documentation effectively. Read our guide on R&D Tax Credits.
- Budgeting and Forecasting: Strategic planning tools to allocate resources efficiently. Learn more about streamlining financial processes.
- Audit Preparation: Organized documentation to ensure smooth audits.
- Compliance Management: Ensuring compliance with applicable accounting standards and other regulatory requirements. Explore how Scrubbed supports compliance.
- Investor Reporting: Preparation of detailed reports for funding rounds or IPO readiness. See how Scrubbed fuels biotech innovation.
- Grant Management: Tracking grant usage while ensuring compliance with funding agreements.
How do you choose the right outsourced accounting partner for your biotech company?
- Scope of Services: Define the specific accounting and finance functions your company needs. Are you looking for specialized services like R&D cost tracking, grant accounting, financial reporting, or strategic financial planning? Or are you interested in delegating more day-to-day tasks? Understanding your requirements will help you determine which outsourcing firm is a good fit for you. Learn more about our comprehensive biotechnology accounting services.
- Expertise and Experience: Your provider should have a proven track record in the biotech industry. Make sure they have experience with regulatory compliance, clinical trial cost management, and revenue recognition. Look for professionals with relevant qualifications and certifications to handle your financial needs effectively. Explore how we've supported early-stage biotech firms like Mantra Bio.
- Flexibility and Scalability: Biotech companies often experience rapid growth or changeable activity levels, so flexibility is critical. Choose a provider that can scale its services as your company evolves, whether you need basic bookkeeping during early stages or more robust financial management as you expand. Consider whether their model can support your expected growth. Discover how Scrubbed's services can streamline your operations.
- Data Security: Privacy and the proper use of sensitive data are at the heart of the biotech industry. Make sure any potential partner has robust security measures to protect your critical data and records.
- Check Client Reviews: Reviewing client testimonials, case studies, and success stories specific to biotech companies can give you confidence in the provider's ability to deliver quality services tailored to biotech's unique challenges. Dive into our Jaguar Health client story for an example.
How can a biotech effectively onboard outsourced accounting and finance professionals or teams?
- Establish clear expectations: During your initial meeting with the outsourced team, clearly outline your expectations, including the scope of work, timelines, how you prefer to communicate, and what kind of reporting you need. Define key performance indicators (KPIs) to track the outsourced team’s performance and the overall health of your accounting function. Maintaining an open feedback loop allows you to ensure the team is consistently meeting your needs and exceeding expectations.
- Share information: Securely grant outsourced team members access to your current accounting system and historical financial data.. Don’t forget to share any internal accounting protocols or workflows, like how invoices get approved or expenses are reported if you have them.
- Build relationships: Introduce your internal team to the outsourced accountants. This fosters relationships and ensures everyone knows who to contact for what.
- Set the team up for success: Establish a regular communication schedule with clear goals for each meeting to ensure a long-lasting and productive partnership. Discussing progress, addressing questions, and staying aligned are all crucial for success.
What are some best practices for working with outsourced accounting and finance professionals?
- Maintain Clear Documentation: Tracking R&D expenses, managing clinical trial finances, and properly accounting for grants are all complex processes with plenty of room for error. Keeping documentation like contracts, agreements, and accounting guidelines organized and accessible is crucial.
- Maintain Transparency: Transparency in financial matters builds trust and keeps you informed about your company’s financial health. Your outsourced team should explain processes and reports clearly, ensuring you understand every detail.
- Establish a Contingency Plan: Biotech companies need to be ready for unexpected events, including staff turnover or operational changes. Outsourcing gives you access to scalable services that ensure a seamless transition if you need to make adjustments.
- Utilize Their Expertise: Outsourced teams have specialized knowledge that goes beyond basic accounting tasks. For instance, Scrubbed offers insights into compliance management, operational efficiencies, and strategic financial planning tailored to biotech firms. Learn how our expertise helps fuel innovation.
- Review Performance: Regularly assess the performance of your outsourced team to ensure they’re meeting goals and delivering value. Focusing on accountability and encouraging feedback helps continuously improve services.
- Cultivate a Long-Term Relationship: Treat your outsourced team as a long-term strategic partner rather than a quick fix by fostering collaboration and sharing business goals. Scrubbed works closely with biotech companies to align the services we provide with our clients’ growth objectives and challenges.
What results can you expect when partnering with an outsourced accounting team?
- Enhanced Financial Visibility: It’s possible to get deeper insights into your financial health with detailed reporting systems designed for biotech companies. Learn more about Scrubbed’s services for biotech.
- Streamlined Compliance Processes: Outsourcing to experts helps you prepare for audit readiness and improves regulatory compliance.
- Optimized Cash Flow Management: Long R&D cycles need expert cash flow strategies that help you allocate resources effectively and manage cash flow during critical development phases.
Improved Investor Relations: Strengthen investor confidence with clear, accurate financial documentation and reporting that is designed to give investors the information they need. See how Scrubbed supports early-stage fundraising efforts for biotech firms. - Greater Operational Efficiency: Outsourcing accounting tasks frees up your internal team to focus on higher-value work and drive more efficient operations.
How do we measure success?
Ultimately, the success of engaging an outsourced accounting team or fractional professional is demonstrated through improved financial management, reduced risks, cost savings, and better strategic decision-making for the company’s growth and stability. Some ways to gauge the effectiveness of your partnership with an outsourced accounting and finance team include:
Key Performance Indicators (KPIs):
Accuracy and Timeliness of Financial Reports:
- Are financial reports delivered accurately and on time?
- Are there fewer errors or discrepancies in financial statements since engaging the team/professional?
- Do reports provide clear insights into the company’s financial health and performance?
Compliance and Risk Management:
- Is your company complying more closely with tax laws, regulations, and financial reporting standards?
- Has the risk of financial errors or non-compliance decreased since engaging the team/professional?
- Are there fewer audit findings or issues related to financial management?
Financial Analysis and Strategic Guidance:
- Has the quality of financial analysis improved, leading to better decision-making?
- Are there valuable insights provided by the outsourced experts that have positively impacted the business?
- Have strategic financial plans been developed or optimized since working with the team/professional?
Client Satisfaction and Communication:
- Are you satisfied with the level of communication and responsiveness from the team/professional?
- Do they proactively communicate financial trends, potential risks, or opportunities?
- Have there been improvements in collaboration and integration with your internal team?
Key Performance Indicators (KPIs):
How is the team or professional performing against KPIs that you have established with your provider.
Conclusion
At Scrubbed, we understand the complexity of biotech accounting and how to maximize innovation while mitigating risks, whether you’re preparing for clinical trials, seeking funding, or managing long-term development cycles.
Contact us today or explore our biotechnology services to learn how we can support your success.