According to research by the AICPA, about 60% of CPA firms have been outsourcing some of their accounting activities.
Outsourcing is a powerful business strategy for many industries; accounting and audit firms are no exception. There are still many questions and concerns about how outsourcing works, how it bridges accounting industry gaps, etc.
However, outsourcing can improve the quality, cost-effectiveness, productivity, and overall efficiency of firms of all sizes. Small, medium, or large firms—no matter the business size—benefit from the multifaceted scope of outsourcing models.
Before you choose an outsourcing firm that suits your needs, let us delve deeper into how outsourcing can help you improve the overall quality of your accounting and audit functions.
Outsourcing enables accounting and audit firms to delegate non-core tasks to specialized service providers. Routine clean-up, bookkeeping, monthly closures, payroll processing, taxation, audits, forecasting, and other admin functions—outsourcing teams can help with all of it. These are time-consuming tasks, and offloading them to a team of experts enables your internal teams to focus on strategic and value-added activities like advisory services, strategy, client relationship management, etc.
Outsourcing makes your business flexible. Depending on the seasonal fluctuations, you can easily scale your operations up and down when you have an outsourcing team to support you. For example, during tax season, you might refrain from acquiring additional clients because you don’t have the bandwidth. By outsourcing tax preparation and filing, you can quickly ramp up your resources without committing for the long term. During other times, you can reduce the number of resources to optimize costs.
When you partner with outsourcing teams, you can use the time zone differences to your advantage. Outsourcing helps you remain operational around the clock, leading to faster project turnaround times and continuous service availability—a great advantage when you have an audit deadline, for example.
Outsourcing firms have a team of highly skilled professionals with extensive experience and expertise in different domains of accounting and auditing. By leveraging their experience and knowledge, you gain an edge over your competitors, ensure high-quality service delivery, and stay updated with industry trends and regulations.
Outsourcing teams have specialized skills that your in-house teams might lack. Some of this expertise includes forensic accounting, international tax compliance, financial analysis, and more. These skills are key for handling complex client needs and scaling your business up.
For outsourcing firms, it is important to stay on top of their game. Hence, they typically invest in continuous training and development. By partnering with such a firm, you benefit from a workforce that is well-acquainted with the latest tools, technologies, and best practices, which also helps you ace high-quality service delivery.
Outsourcing helps you eliminate many costs—infrastructure, technology, human resources, and training and development are some of them. This leads to significant cost savings in terms of office spaces, software purchase and maintenance, employee benefits, etc.
India and the Philippines are among the top nations where you can access highly skilled labor at a lower cost. You can save costs while maintaining high-quality standards by outsourcing your accounting and audit functions to these regions.
A good outsourcing partner lets you choose a model that suits your business needs. Instead of a fixed cost, choose a flexible pricing model with variable costs, which helps make your business financially flexible. You pay for the resources you will use and for the hours needed, allowing you to manage your cash flow effectively.
Outsourcing firms invest in tools and software solutions to stay competitive. However, the purchase, set-up, training, and maintenance of these tools are expensive. By partnering with these firms, you can access these new-age tools without needing to buy them. You can use the capital in a more strategic area by saving costs here.
Leading outsourcing providers can leverage automation and artificial intelligence to improve accuracy, speed, and efficiency. Automation and the use of AI help reduce the risk of manual errors, free up time to focus on strategic tasks and establish you as a trustworthy accounting and audit service provider.
Reputable outsourcing partners implement robust data and security measures while adhering to stringent compliance standards. This helps ensure that the confidentiality and integrity of the financial data are maintained while mitigating the risks of data breaches, regulatory penalties, and legal charges.
Outsourcing non-core functions allows your internal teams to focus on strategic initiatives that help drive growth. You can explore new markets and geographies, expand your service offerings, and seek innovation in your business pursuits.
By outsourcing, you can capitalize on specialized service providers' expertise, available technology, and efficiencies. This gives you an edge in the market, allowing you to offer high-quality services at a competitive price, attracting more clients and increasing your market share.
One of the best ways to scale faster while remaining flexible and agile is through outsourcing. Outsourcing teams can adapt quickly to changing market conditions and client demands. This agility is crucial for staying ahead in the competitive industry and capitalizing on new opportunities.
Outsourcing has several benefits, but you can reap the benefits when you choose a reputable firm with a proven track record, robust security measures, and a thorough understanding of your industry. With the right partner, you can transform your accounting and audit business, drive efficiency and quality, and gain a competitive advantage.
Sponsored Content: This article is generously brought to you by one of our valued sponsors. Their support enables us to continue delivering expert insights and the latest industry trends to our dedicated community of accounting professionals.