INSIGHT

Outsourced accounting: A complete guide for businesses

January 15, 2025

Services: Outsourced Accounting

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For businesses of all types, sizes, and scales, accounting and financial excellence is paramount to success. But as you’re in the throws of growth, you can experience many accounting pain points.

Does any of this sound familiar? 

• You’re passionate about your business or industry but overwhelmed by the financial reporting, auditing, and forecasting requirements to keep it thriving.  
• You’re ready to scale but need new tech, stronger processes, and better financial accountability.  
• You know your financial data is important, but you don’t know how to use it to make growth-oriented decisions.  

Whether one (or all) of these situations apply to you, there’s a clear solution: outsourced accounting – a game-changer for businesses seeking clarity, growth, and financial mastery.

Let’s explore how this innovative approach can transform your financial landscape, free up your time for core business activities, and provide the expertise you need to make informed decisions.  

From understanding the basics to choosing the right partner, we’ll cover everything you need to know about outsourced accounting and why it might be the solution your business has been searching for. 

What is outsourced accounting?

Outsourced accounting is the practice of delegating a company’s accounting tasks and responsibilities to external financial professionals or firms. This approach allows businesses to access specialized accounting expertise without needing in-house staff, providing a flexible and scalable solution for managing financial operations.  

There is a common misconception that outsourced accounting and bookkeeping are the same, but there are distinct differences. At its core, outsourced accounting functions as an on-demand, external accounting department that handles a wide range of financial services, including: 

• Operations, process, and procedure assessments 
• Data-driven business analytics and growth strategies  
• Financial reporting and statement preparation 
• Accounts payable and receivable management 
• Inventory and cost accounting 
• Payroll processing 
• Tax preparation and compliance 
• Budgeting and forecasting 
• Financial analysis and advisory services 
• Technology assessments 
• Bookkeeping and transaction processing 

By comparison, bookkeeping services focus primarily on the recording and tracking of a business’s financial transactions and preparing financial statements. 

By partnering with an outsourced accounting provider, businesses can benefit from professional financial management while freeing up internal resources to focus on core business activities and growth strategies. An outsourced accounting provider also provides access to advanced accounting technologies and expertise that might be costly or impractical to maintain in-house. 

This approach is particularly valuable for startups, small to medium-sized businesses, and organizations experiencing rapid growth or facing complex financial challenges. 

When would your business need outsourced accounting services? 

Businesses can benefit from working with an outsourced accounting firm at any stage. Let’s look at the most common instances where leveraging this resource can garner the most value.

Top pain points that signal your readiness for outsourced accounting

Businesses often turn to outsourced accounting when facing specific challenges that hinder their financial management and growth, such as:  

• Unclear or unfocused financial data: You’re struggling to get quality financial information promptly, making it difficult to make informed decisions. 
• Lack of financial transparency: Your current accounting processes don’t provide the clarity needed to understand your company’s financial health. 
• Need for more proactive decision-making: You’re reactive rather than proactive regarding financial planning and strategy. 
• Overwhelm with regulatory compliance: Keeping up with constantly changing financial regulations and GAAP compliance is becoming increasingly challenging. 
• Lack of specialized expertise: Your in-house team lacks the specialized knowledge required for complex accounting tasks or industry-specific requirements. 
• Time constraints: Accounting tasks take up too much of your time, diverting attention from core business activities. 
• Concerns about fraud: You’re worried about the potential for internal accounting fraud and want to mitigate this risk. 
• Personnel changes: Retirements, staff turnover, or difficulty in hiring qualified accounting professionals are disrupting your financial operations. 

Top growth milestones that signal your readiness for outsourced accounting 

Certain business milestones often necessitate a more sophisticated approach to accounting, such as: 

• New investors or fundraising rounds: External stakeholders may require more comprehensive financial reporting and analysis. 
• Preparing for an IPO: The complex financial requirements of going public often demands specialized accounting expertise. 
• Implementation of new technology: When adopting new financial systems, outsourced accountants can provide valuable support in the strategic adoption and implementation practices. 
• Expanding into new markets: Entering new geographical areas or industries may require specialized accounting knowledge to navigate different regulations and tax systems. 
• New product launch: Need for inventory cost accounting improvements and integrations with systems.   

By recognizing these pain points and growth milestones, you can decide when to leverage outsourced accounting services to support your business’s financial health and growth objectives. 

Costs for outsourced accounting services

How much does an outsourced accounting provider cost?  

The total price can vary significantly based on the scope and complexity of the services required. Factors that influence pricing include the size of your business, the frequency of services needed, and the specific accounting functions you’re outsourcing.  

It’s important to note that while outsourced accounting is an investment, it often compares favorably to the expense of hiring full-time employees for the same work. Outsourced accounting firms, like BPM, can provide a wealth of knowledge that might not be available in-house. We can help streamline processes, identify inefficiencies, and implement best practices that can save a company both time and money in the long run.  

Moreover, by outsourcing certain accounting functions, businesses can free up valuable resources and allow employees to focus on other core aspects of their operations. This can lead to improved overall performance and more timely information for better decision-making.  

When considering the cost, it’s crucial to look beyond the price tag and consider the value provided. A reputable outsourced accounting provider can offer: 

• Access to a team of experienced, accredited professionals 
• Scalable services that can grow with your business 
• Implementation of advanced accounting technologies 
• Proactive advice and strategic financial planning 

Ultimately, the right outsourced accounting solution can be a strategic investment in your business’s financial health and growth potential. 

Top 9 benefits of outsourced accounting services for businesses 

Outsourced accounting services offer numerous advantages that can significantly impact a business’s financial management and overall performance.  

From enhancing financial accuracy to supporting growth and compliance, these services provide solutions to many common challenges companies of all sizes face. 

1. Boost data integrity through accurate and timely financial reporting

Outsourced accounting services ensure your financial data is accurate, up-to-date, and reliable. Professional accountants use advanced systems to maintain precise records, reduce errors, and provide timely financial reports. This accuracy helps you meet important financial deadlines consistently, whether for tax filings, investor reports, or internal reviews. 

2. Enhance financial analytics for proactive decision-making

With outsourced accounting, you gain access to expert financial analysis. This enables data-driven decisions, trend identification, and more effective future financial scenario forecasting. During periods of rapid growth or expansion, this insight becomes invaluable for strategic planning. 

3. Improve operational efficiency

Outsourced accounting firms often employ cutting-edge technologies and streamlined processes, leading to increased efficiency in your financial operations. This automation reduces manual errors, frees up your team’s time for core business activities, and can help you select and implement advanced accounting technologies suited to your business needs. 

4. Enhance financial procedures

Experienced outsourced accountants can review and optimize your financial procedures, implementing best practices that improve overall financial management and control. This is particularly beneficial when transitioning from cash-basis to GAAP accounting or preparing for financial audits. 

5. Develop growth strategies

With their broad experience across various industries, outsourced accounting teams can provide valuable insights to support your business growth strategies. We can help you navigate challenges associated with rapid growth, expansion into new markets, or meeting new investor demands for specific accounting methods or reporting. 

6. Ensure regulatory compliance

Outsourced accounting professionals stay current with changing regulations and compliance requirements, ensuring your business adheres to GAAP and other relevant standards. This reduces the risk of penalties or legal issues and helps you meet evolving investor or industry-specific reporting requirements. 

7. Secure access to quality financial team members

Outsourcing provides access to a team of specialized accountants, offering expertise across various financial areas without needing full-time hires. This flexibility allows you to scale your accounting support as needed, which is particularly useful during audits or when preparing for investor due diligence. 

8. Get customized services tailored to your needs

Outsourced accounting services can be tailored to your specific requirements, whether you need basic bookkeeping, complex financial management, financial leadership, or something in between. 

9. Leverage advanced technology

By partnering with an outsourced accounting firm, you gain access to advanced accounting technologies and software, like NetSuite and Sage Intacct, that might be costly to acquire independently. These tools can help automate processes, improve reporting, and support your business’s growth.  

How to choose the right outsourced accountant for your business 

An outsourced accountant doesn’t just handle your business numbers; they act as a strategic extension of your team, so you have to find someone you trust can help you reach your goals.  

Traits to look for in an outsourced accounting team 

Your business financials are sensitive and carry monumental weight for your internal team, investors, and customer perception.  

Given the task’s importance, it is imperative to work with a team whose values align with yours. As you interview outsourced accounting firms, take note of the following traits.  

Ensure they are: 

• Open-minded: Seek an accountant who is receptive to new ideas and approaches. 
• Curious: Look for someone who shows genuine interest in understanding your business. 
• Accomplished: Choose a provider with a proven track record of success. 

Finding an outsourced accounting partner with these traits ensures you can build an ongoing relationship instead of a purely transactional one.  

Questions to ask potential outsourced accounting firms 

No two outsourced accounting firms are the same. Each comes with its own skills, strengths, and weaknesses. When meeting with outsourced accounting providers, ask deep, thoughtful questions.  

Here are some to get you started. 

1. What’s your talent pool like? 
   Inquire about the team’s size, certifications, and range of experiences. Ask about specific skills relevant to your needs, such as software certifications or industry-specific knowledge. 
2. What’s your experience like in our industry? 
   Understand the depth and breadth of their industry knowledge. Ask about long-term clients similar to your business and request references. 
3. What tech, systems, and automation services do you offer? 
   Explore their technological capabilities and how they can support your current needs and future growth. Ask about automation that can help you scale effectively. 
4. What’s your communication style and reporting process? 
   Understand how they interact with clients, including communication frequency, turnaround times, and whether they offer remote, on-site, or a combination of services. 
5. How do you ensure compliance and financial accuracy? 
   Inquire about their processes for maintaining compliance with relevant regulations and standards, as well as their methods for ensuring financial data accuracy. 
6. How can you help us scale? 
   Ask about their ability to support your growth plans, such as opening new divisions or acquisitions. 
7. How will we work with you? 
   Get details on their onboarding process, relationship management approach, and how they handle potential conflicts of interest. Ask about the next steps in the engagement process, including what documentation they’ll need and expected timelines. 

By asking these questions, you’ll be better equipped to choose an outsourced accounting partner that aligns with your business needs and can support your growth objectives. 

Tips to transition work to an outsourced accounting firm 

Transitioning to an outsourced accounting team can be smooth with proper planning and communication. 

Establish a clear point of contact 

Designate a primary contact person within your organization to liaise with the outsourced accounting team. This individual should understand your financial processes well and be able to coordinate effectively between your internal team and the outsourced provider. 

Agree to communication cadence and style 

Set up a regular communication schedule with your outsourced accounting team. This might include weekly check-ins, monthly reviews, or quarterly strategy sessions. Decide on the preferred communication methods, whether it’s email, video calls, or a project management platform. 

Set clear KPIs and goals 

Work with your outsourced accounting provider to establish clear key performance indicators (KPIs) and goals around: 

• Financial preparation and tax compliance 
• Cash flow management 
• Budgeting and forecasting 
• Internal controls 
• Process efficiency  
• Business growth 
• Inventory cost analysis and margin improvements 

Regularly review these KPIs to ensure the outsourced team meets your expectations and identify areas for improvement. 

Additional tips for a smooth transition: 

• Define your needs and expectations clearly before the transition begins 
• Create a comprehensive transition plan, including timelines and milestones 
• Ensure all required data and documents are organized and accessible 
• Maintain oversight of financial transactions and compliance requirements 
• Be open to feedback and continuous improvement suggestions from your outsourced team 

By following these steps, you can create a strong foundation for a successful partnership with your outsourced accounting team, improving your business’s financial management and operational efficiency. 

Find your outsourced accounting provider with BPM 

Outsourced accounting services can transform your financial management, providing specialized knowledge, efficiency, and scalability to support your business growth. As you consider this strategic move, partnering with the right firm is crucial. 

The BPM outsourced accounting team goes beyond basic bookkeeping. We serve as an extension of your business, offering CPA firm-level knowledge in tax, assurance, and financial support services.  

Our team works closely with you to explore financial and operational opportunities, customizing solutions that fit your unique challenges. 

With extensive experience across various sectors, including consumer products, real estate, technology, and nonprofits, BPM understands the nuances of different industries. We leverage best-in-class, cloud-based accounting platforms to empower your financial management with greater control and quality. 

Take the next step toward optimizing your financial operations. Contact BPM today to discuss how our outsourced accounting services can support your business goals and drive your success.