There is no denying every accounting firm aims for growth and scalability like any other business that looks forward to making maximum profits. However, to make it a reality, owners need to focus on their operational and growth strategies rather than time-consuming tasks, which includes dealing with the back-office processes and repetitive tasks, especially the accounting ones. This can include anything from handling bookkeeping to preparing taxes, overseeing tax and financial issues, and more.
When firm owners opt for outsourcing bookkeeping and accounting services, they can manage such tasks with perfection at the hands of outsourcing experts. The simple reason being outsourcing experts is years of experience, relevant skills, and the right technology in place, along with a dedicated team that helps them cater to different clients at the same time and that too in an efficient manner.
Views of Industry Professionals on Outsourcing Accounting Services
This paves the way for scalability as business owners have enough time to focus on growth and client acquisition strategies. So, let’s hear the views of some industry professionals on the same:
1. Integrate technology & operations into outsourcing accounting
Partner at Two Roads, a cloud-based accounting firm.
Scalability is not an accounting problem. It’s a technology and operations problem.
To solve it, an outsourcing partner has to provide something altogether different than what you can create for yourself instead of just a “better” or cheaper solution. That eliminates most local providers who address scale by putting more people on top of a problem but don’t have the technology-savvy people to create a truly scalable solution.
The traditional CPA will face a hard reality over the next few years. The service providers who can integrate technology, data collection, and operations into an outsourced accounting solution will be the ones who lead the industry in the very near future.
2. Makes you more focused on business growth
Founder, Valet Maids
I am a CPA (licensed in Texas) and have outsourced accounting services to help scale my business. I own Valet Maids, a maid service in the Dallas area. As I have grown the business, I have needed to outsource services such as accounting and bookkeeping. Doing this has helped me focus on growing the business and operations. Even though I am a CPA myself, it has been extremely helpful to outsource my accounting function to a firm that specializes in small businesses.
3. Virtual outsourcing platforms leading the way
The tax preparation and accounting industry are going through a tremendous shift right now. Virtual service providers are replacing traditional brick-and-mortar accountants. Virtual platforms naturally lend themselves to outsourcing as they are not geographically limited, unlike traditional accountants. Our entire ecosystem is virtual, allowing us to quickly onboard outsourced help without even meeting them face to face.
As a founder of a virtual tax preparation platform that serves solopreneurs and gig economy type customers, using outsourcing for data entry and other admin functions has allowed us to more than double revenues each year since our launch three years ago.
4. Address the concerns before taking a step forward
Founding shareholder, Gamburg CPA PC
Outsourcing can definitely solve the scalability problem for an accounting firm, but it comes with other concerns, as well. The quality of the outsourced work can be lower, although it will be cheaper in terms of dollars. So the question is, how long it will take you to review and correct the work?
The other major issue is security concerns with sharing your clients’ personal sensitive information with a third-party. While you can control your firm data security, you wouldn’t be able to control it for the third-party. Outsourcing might be good for lower-end services like bookkeeping and sales tax, which don’t have a lot of sensitive information.
We are aware that some of the big four accounting firms outsource tax returns, but the quality is lower. It saves the entry-level staff work, but then a manager might need to spend more time on it to correct it, and bring the work to the standard of the CPA firm quality.
5. Consider offshore accounting
Partner of Global Expat Advisors
I think outsourcing can help with scalability but with precaution due to the quality of work of some outsourcing centers. Speaking from experience, I found a lot of outsourcers in the US that produce inferior quality work products and can have delays as they are managing several clients, so there are questions with priority.
Although I do think offshoring can help with scalability (the Big 4 and most major accounting firms already do it), the most important thing is that the employees are full-time and dedicated to the firm’s clients. For a smaller firm, I think the best strategy would be to poach offshore employees from these larger firms to scale but also have the interests aligned through incentives for these offshore employees.
6. Checking the versatility of the outsourcing partner
Scalability is a severe problem for any developing business hoping to grow. It is a challenge to access services and methods while having expanding costs under tight constraints. For qualified CPAs who are in the matter of giving expert accounting services for companies, the test is two-crease: ensuring customer fulfillment in functions and methods and in assuring that their own business accounting is fit as a fiddle.
Scalability inside outsourcing is worth checking how versatile a merchant is, before making all necessary endorsements. Scalability may moreover rely upon working relationships. Sellers who have put resources into planning, foundation, and so on can assist companies with picking up significantly with robust arrangements and reliably high caliber each time.
This concludes the fact that outsourcing is the perfect solution against the scalability problem of accounting firms. Owners are not only able to manage their time-consuming accounting tasks but also have enough time to focus on strategies for enhancing growth and profitability. This boosts the overall productivity of the organization, eventually, which is the stepping stone towards growth and scalability.