November 26, 2018 – A strong system of accounting and financial management is the lifeblood of every successful business. Achieving this operational strength is directly related to the expertise of the individuals leading this function in tandem with the team performing the day-to-day duties.
Organizations of all sizes face a myriad of challenges throughout all stages of their business cycle. From small startups to multi-generation family owned businesses and beyond, staffing at all levels requires a significant financial commitment and creates challenges in finding truly qualified individuals. How can a business prepare to face what’s next from a financial perspective?
>> Outsourcing Accounting & Financial Management services can be part of the solution.
There are many benefits of outsourcing, including access to skilled personnel without the time and monetary costs associated with hiring. In addition, outsourcing also provides leadership with the opportunity to focus on core proficiencies, including building the business and ultimately generating more revenue.
But the benefits have the potential to achieve even further objectives beyond successful completion of day-to-day functions. Outsourcing critical financial services may assist with the avoidance of the typical business pitfalls related to decision making, risk and fraud.
For example, one of the most essential best practices in fraud prevention is the standard accounting practice of separation of duties. By setting up a system of accounting controls with outsourced accounting support, a company can avoid making it easy for workplace fraud to occur. Internal controls implemented with outsourcing can provide an extra layer of security in a business’s operations to avoid these costly, and in some cases, very public crises.
In light of these issues, business owners need to address many questions including:
- What level of expertise do we need?
- How many employees do we need?
- How much do we need to pay them?
- How much do we need to invest in technology?
- Are we effectively addressing organizational risk?
The investment in the accounting/finance function needs to be balanced against other vital needs of the business and limits to resources. Outsourcing all or part of this function is a solution that can provide value to your organization that goes beyond the numbers.
Businesses of all sizes and at various stages of development can realize benefits from outsourcing. Common company profiles include: Start-up companies, Middle market and high-growth companies, companies looking to scale resources up and down as needed, businesses looking to leverage technology and businesses looking to concentrate on growing their business rather than back-office operations.
One of the key benefits of outsourcing is the flexibility to engage outside experts to assist you in areas that will provide the greatest value to your business operations, and management of risk. A hierarchy of services includes:
Business owners are constantly evaluating their organization’s effectiveness at confronting challenges and seizing opportunities. Incorporating an outsourcing strategy can help on both fronts by providing:
- Access to expert advice in a broad range of areas
- Access to the latest technology
- Reduced organizational risk related to fraud, information security, internal controls, compliance, etc.
- Reduced business costs
- Improved cash management
- Improved staff productivity
- Improved quality, timing and accuracy of reporting to allow for more informed decision-making
The evaluation of outsourcing can be an important consideration during the strategic planning process. Finance and accounting outsourcing can be an all-encompassing service, or can be targeted to assist with specific areas or projects to add value to your operations, while decreasing the risk faced by your business.
This post is an excerpt from the Dopkins Risk Advisory Services newsletter. To read the complete publication, please click here.
About the Author
Albert A. Nigro CPA, CVA
Al provides accounting, tax and consulting services for privately held companies and their owners. He consults on income tax planning, financial and operational management and business valuation.