In the drive to cut costs, boost efficiency, offload unloved and time-consuming in-house tasks and leverage external expertise, many CEOs and CFOs are coming to the conclusion that outsourced bookkeeping is a worthwhile idea to explore.
Indeed, quality outsourced accounting is now regarded as a headline way to cut costs – but there are plenty of other reasons to consider it. It means your in-house team focuses on growth rather than books. It means you leverage the big hardware, software and personnel investments that a specialist outsourced bookkeeping company is committed to making. And it gives you access to a fresh set of passionate and yet objective eyes who can steer you onto the path of some of the best financial decisions you’ll ever make.
But despite all that, some CEOs and CFOs still have natural reservations about taking the plunge into the world of outsourced bookkeeping. After all, it means trusting another person or group with the lifeblood of your business – your finances.
When interviewing reluctant CEOs and CFOs, they typically reel off a veritable shopping list of outsourcing issues that are of genuine concern. But should you really be worried about all of them? And are there things you can do to prevent or mitigate these outsourcing problems?
Let’s take a dive into the top 10 common outsourcing issues:
It’s not just your valuable business IP that you need to safeguard. As CEO/CFO, you’re also worried about the confidentiality of your client’s information, so it’s perfectly legitimate to be reluctant about putting all of those secrets into someone else’s hands.
So how do you make sure they’re a safe pair of hands? Don’t be shy to ask all your questions about an outsourcing provider’s policies and practices – and make sure you’re happy with the answers. Read not only the fine print of your agreements with your outsourced accounting services, but ask what their employees also have to sign and adhere to.
Because this confidentiality matters so much, it makes security an absolute top priority for quality outsourced accounting services. In fact, your outsourced partner is likely to safeguard your data with a more protective shield than you had ever dreamed of.
Still, there are things you can do prevent security-related outsourcing problems from your end. Make sure the way you collect and initially store your information does not leak, for instance by documenting who has access to what, how & only give access to those that need it. When collaborating with your outsourced partner, ask them about their data security practices including their physical security and the management and disposal of data.
Many reluctant CEOs and CFOs worry that because they’re handing over their accounting, they’re effectively handing over control of a big chunk of the business.
But that’s the wrong way to look at it: you’re not offloading responsibility, but rather streamlining particular processes that you have decided can be done better.
Indeed, because you may be moving from in-house to outsourced bookkeeping, a CEO/CFO may worry that “downsizing” – while financially beneficial – may not be the best move for growth. But it’s crucial to understand that outsourcing is in fact not downsizing. Instead, you’re gaining rather than losing people, experience, resources and equipment, just in the most cost-efficient way.
What you do need to do, however, is make sure your outsourced accounting service understands your organisation’s rules, goals and culture. This is done through effective communication.
To make sure everyone – whether in-house or externally – is on board and effectively working as a single unit, smooth and open communication channels are necessary.
This is one of the outsourcing issues the CEO/CFO will worry about the most. But just because you’re working with a bookkeeping partner doesn’t mean that communication will suffer. Checking in regularly in person, by phone, email and a range of modern digital conferencing mediums is a must, and cloud software these days means logging in and monitoring can be done wherever the user is.
And if these lines of communications are open, preventing outsourcing problems of many other kinds are easy. One such common concern is training – whether new staff hired by the outsourced accounting service are up to your expectations.
That’s why getting that initial choice of outsourced bookkeeping firm is so important for the CEO/CFO to get right. Ask your outsourcing provider how suitably qualified & knowledgeable their staff are. Especially with local accounting & tax regulations and practices. Double-check that any new hirings will always be actual accountants who are overseen by CPA and CA qualified senior accountants.
Similarly, the CEO/CFO may suspect that if they just hang onto control of their accounting, they would ensure their investments into hardware and software are always on the ball.
But while it’s perfectly normal to believe that no one could care about your prosperity more than you, always remember that the reputation of outsourced bookkeeping firms depends absolutely on them delivering something better than you could have done yourself.
So while outsourced accounting might be seen as a superficial cost, it’s probably more likely to be a long-term saving. That’s because it’s not you who has to provide that physical space for accounting people and equipment anymore. It’s not you constantly upgrading and maintaining hardware and software. And it’s not you ensuring that top accountants are getting the specialised supervision and training that means they’ll spot something in your financials that could save you a lot of money.
As the savvy CEO/CFO knows, time is money. And so a common outsourcing concern is that moving things externally just slows everything down. You’re waiting for an answer to an email. You’re calculating a time-zone difference. You’re wasting time – and wasted time is wasted money.
But effectively outsourced bookkeeping functions should save rather than cost you time – while they’re running the accounts, you’re managing staff and turning profits. As an Aussie company, your ideal outsourced accounting service is therefore also in Australia, at the end of the phone, and also in the cloud, where financial data is readily available to both you and them.
Finally, CEO/CFOs commonly worry that when they outsource, they lose the nimble flexibility that an in-house bookkeeping solution provided.
The truth is that outsourced accounting is actually the more flexible option – by far. Rather than having to hire, train, accommodate and then let staff go when no longer needed, an outsourced solution means you can pick and choose from tax, debt, payroll and other specialised services only when you need them.
For instance, are there particular times of the year when you need a full-time accountant as opposed to access to a service with a handy hourly rate? If that sounds like you, it’s only outsourcing that provides the best flexibility for cost-effectiveness and potential growth.
Prevent outsourcing problems before they happen
So when it comes to getting outside help with those all-important finances, it’s only natural that the savvy CEO/CFO needs to have an eagle eye on preventing outsourcing problems before they arise. But also bear in mind that we outsource just about everything. Did you make the chair you’re sitting in? Do you always make the food you eat?
At the end of the day, it’s all about making the perfect outsourcing choice – and it’s especially true when it comes to your business’ precious books. Here at Befree, we understand your concerns all too well, so get in touch with our staff today to discuss how outsourcing really is the answer you’ve been looking for.