Unlock Your Business Potential with Outsourced Accounting and Finance
Experience unparalleled financial expertise with our comprehensive outsourced accounting and finance services. Our fractional team offers a wide range of solutions including financial reporting, payroll management, tax compliance, and strategic financial planning. Leveraging the knowledge and skills honed at top-tier U.S. accounting firms, we provide the support you need to elevate your business performance.
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?
Outsourced accounting and finance involves partnering with an external firm or individual to handle specific aspects of your financial operations. This can range from bookkeeping and payroll to strategic financial planning and tax preparation. Companies can outsource their entire finance function or a specific set of tasks, depending on their needs and budget.
With the growing complexity of financial regulations, the need for strategic financial planning, and the challenges of recruiting qualified accounting and finance employees, outsourced accounting and finance is becoming an increasingly popular option for businesses.
Outsourced accounting and finance can offer flexibility, expertise, cost savings, and improved efficiency for businesses, allowing them to concentrate on their core competencies while ensuring their financial matters are handled professionally and compliantly.
How is it related to fractional accounting and finance?
Outsourced and fractional accounting and finance are related in that both involve external professionals handling financial tasks for a company. However, there are differences in the scope and arrangement of these services.
Outsourced accounting and finance typically involves hiring an external firm or team to manage some or all aspects of a company’s accounting and financial functions. Fractional accounting and finance, on the other hand, typically involves hiring a part-time or “fractional” finance professional to fill a specific role within a company.
In essence, while outsourced accounting and finance handle the day-to-day financial tasks, fractional accounting and finance provide specialized, part-time expertise at a higher level, often focusing on strategic planning and financial management.
What are the benefits of using outsourced or fractional accounting and finance professionals?
There are several reasons why a company might choose to outsource its accounting and finance functions or hire a fractional finance professional. Some of the most common reasons include:
- Cost-effectiveness: Outsourcing can be a more cost-effective way to manage accounting and finance functions than hiring a dedicated in-house team. Fractional professionals work part-time in your business and are typically paid based on hourly commitments, allowing firms to gain access to seasoned professionals who might otherwise be too expensive for the budget.
- Scalability: Outsourced accounting and finance services can be easily scaled up or down to meet the needs of a growing business. As your business needs change, you can easily adjust the hours or scope of work for a fractional finance professional.
- Flexibility: You can tailor the services of a fractional professional or outsourced accounting team to fit your specific needs. Whether you need assistance with financial reporting, budgeting, fundraising, or other tasks, their role can adapt accordingly.
- Improved internal effectiveness: Outsourcing can free up internal resources to focus on core business activities.
What does a Fractional Accounting & Finance Department look like?
A fractional accounting & finance department comprises part-time professionals who bring specialized financial expertise to a company. The team might include a range of professionals from seasoned accounting leads who can offer strategic financial guidance, oversee operations, and provide insights for critical decision to team members who focus on day-to-day bookkeeping, accounts payable, or other tasks.
Additionally, a fractional team might include professionals who complement the practical and strategic support with specialist skills, such as a fractional Controller responsible for financial reporting and compliance, ensuring accuracy and adherence to regulations, or a Financial Analyst who analyzes data to provide insights into performance and trends. Depending on the company’s needs, a fractional Finance Manager could handle day-to-day financial operations, optimizing efficiency and ensuring financial processes run smoothly.
This fractional team model offers businesses flexibility and scalability. Companies can adjust the level of fractional services based on their evolving needs, making it a flexible solution for gaining specialized financial expertise exactly when it’s needed.
What should be the criteria for hiring outsourced services or fractional teams?
- Scope of Services: Define the specific accounting and finance functions your company requires. Are you looking for general bookkeeping, financial reporting, tax preparation, or strategic financial advice? Understanding your needs will help you identify whether outsourced services or a fractional team is the better fit.
- Expertise and experience: Look for a provider or team with a track record of success in your industry. Ensure the professionals you hire have the right qualifications, certifications, and experience to handle your financial requirements effectively.
- Flexibility and scalability: Outsourced services and fractional teams both offer flexibility, but aligning this with your business's growth trajectory is crucial. Consider if the provider can scale their services as your company expands, providing the right level of support at each stage. or if you need a more fixed arrangement.
- Cost-effectiveness: Compare outsourcing costs versus hiring a fractional team to ensure you're getting the best value. Outsourcing can often be more cost-effective for basic accounting tasks, while a fractional team might be beneficial for higher-level strategic guidance.
- Check client reviews: Check client testimonials and reviews to gauge the provider's reputation for quality and reliability.
How does a CPA firm onboard an outsourced accounting, finance & audit firm?
- 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 or fractional team members access to your current accounting system and historical financial data. Provide basic training on your specific accounting software or internal systems if needed. Don't forget to share any internal accounting protocols or workflows, like how invoices get approved or expenses are reported.
- Build relationships: Introduce your internal team to the outsourced accountants. This fosters rapport 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 & finance professionals or fractional teams?
- Maintain clear documentation: Keep documentation organized and accessible. This includes contracts, agreements, and any specific guidelines for the accounting processes.
- Maintain transparency: Transparency in financial matters helps build trust and ensures you stay informed about your company's financial health. Don't hesitate to ask questions if something is unclear. A good, outsourced team or fractional professional will happily explain processes and financial reports.
- Establish a contingency plan: Have a contingency plan in place in case of unexpected events, such as staff turnover in the outsourced team. Ensure there's a smooth transition process if changes need to be made.
- Utilize their expertise: Take advantage of the specialized knowledge and experience of the outsourced team or fractional professional. They can offer valuable insights and advice beyond basic accounting tasks.
- Review performance: Periodically review the performance of the outsourced team or professional. Assess whether they are meeting the agreed-upon goals and if adjustments are needed. Offer and accept feedback on the quality of work and areas for improvement.
- Cultivate a long-term relationship: Treat the outsourced team or professional as a strategic partner rather than just a service provider. A collaborative approach fosters a stronger, long-term relationship. Encourage open communication for continuous improvement. Share your business goals and challenges so they can better align their services with your needs.
How is success measured?
Accuracy and Timeliness of Financial Reports:
- Are financial reports delivered on time and accurately?
- 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?
Cost savings and other efficiencies:
- Are processes more efficient and streamlined with the outsourced or fractional team?
- Have there been cost-saving recommendations or strategies implemented by the team/professional?
- What are the long-term benefits of the engagement, such as improved financial stability, growth opportunities, or increased valuation?
Compliance and risk management:
- Is your company in better compliance 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 fractional 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 like cash flow improvement, profitability, or ROI on investments over time?
Conclusion
Outsourced accounting and finance services can provide significant benefits for businesses of all sizes and industries. By partnering with an external team of experienced professionals, businesses can gain access to specialized expertise in niche or industry-specific areas, improve efficiency, reduce costs, and focus on their core competencies. Scrubbed is a global professional services firm dedicated to empowering clients with the insights and expertise they need to realize their goals, missions, and visions. With a large team of seasoned professionals across accounting, audit, tax, corporate finance, risk advisory, and transaction advisory services, Scrubbed delivers tailored solutions that drive positive change and meaningful results. Our collaborative approach and commitment to creating financial clarity ensure that our clients receive exceptional experiences and the peace of mind that comes with having a long-term growth partner. Let us join your growth journey and help unlock the full potential of your business.