Common Misconceptions About Outsourced Accounting Services

Outsourcing accounting functions is one of the strategic approaches that has gained significant traction in recent years. Outsourced accounting involves delegating financial management and bookkeeping tasks to third-party service providers. Outsourced finance services can be a game changer for businesses. These businesses are looking to streamline their financial operations. This is done with the rise of cloud accounting shared data visibility, cutting costs, etc. It allows businesses to leverage specialized expertise. But, companies could improve several things about outsourcing. This can prevent companies from taking advantage of this valuable resource.

This article explores some of the most common myths around outsourced finance. It also focus on how businesses can make the most of the tools available.

1. Outsourcing is just for the accounting basics

The first thing to clarify is that there's no single way to outsource your finances. Your strategy should be tailored to your existing team, needs, etc. Bookkeeping and processing were among the first and most common tasks to be outsourced once the technology became available.

The reasoning is clear—these tasks can be time-consuming and inefficient to conduct in-house and relatively simple to pass on to a third party. However, technology and workflows have moved from this earlier paradigm, and outsourced accounting services can now provide much more value than just basic processes.

At Fino Partners, we use the building blocks of managing AP and AR to help clients outsource their bookkeeping, VAT compliance and the preparation of annual financial statements and tax returns. We take a holistic view of the whole accounting function, building systems that provide value from data collection to advisory.

Our systems enable us to offer value-added services like financial planning, budgeting, forecasting, high-quality management accounts, automation of manual bookkeeping and time-consuming manual administrative processes.

2. Outsourcing means losing control and quality

For businesses used to handling their accounts in-house, where they can keep an eye on everything, there is a natural caution when moving this critical function outside your team. Solving this comes down to three key things: choosing the right provider, building suitable systems and leveraging new expertise.

• Choose a firm you trust that can demonstrate its value in precise ways.
• One of the important benefits of cloud accounting is the ability to build in controls. It ensures the work to a high standard.
• Set reviews to monitor the work and ensure it meets your business's standards and requirements. For example, we use strict quality control measures backed by clear SLAs. It ensures that all work is completed on time.

Outsourcing can raise the overall quality of your accounting function in the long term. It allows you to engage a larger and specialist team of accounting professionals.

This means that you can access experts who are not available locally. After all, you can tap into more experience in specific areas of accounting. It involves tax specialism without hiring full-time team members.

3. Moving accounts out of my business means firing my team

Every business needs financial oversight and expertise. And we’re firm believers that this should include in-house as well as external advisers.

Having team members embedded in your business, seeing them daily, understanding your customers and engaging with your team is hugely valuable for your long-term success. But only when they're not bogged down managing manual workflows and digging through incomplete data.

By outsourcing basic tasks like bookkeeping and invoicing and using a partner to provide clean, ready-to-use accounts, your internal team can focus on more complex tasks, such as drilling into the specifics of margins and using the data and accounts to drive business improvements.

4. Outsourcing is just for big companies

While we often think of outsourcing as the domain of major international businesses, targeted outsourcing can be even more beneficial for smaller companies looking to scale up their functions and improve their financial management.

• Outsourcing allows growing companies to access specialized systems. It also will enable experts to hire a full-time FD before they have the budget.
• Outsourcing tasks involve bookkeeping, tax preparation, etc. The smaller companies can free up time and resources to focus on business functions. That includes product development, customer service, etc.
• Outsourcing can help smaller companies stay up-to-date. It can be done by changing regulations without hiring additional staff.

One of the main advantages of building a long-term relationship is the ability to adapt your outsourced functions. The thing is, as you grow, your needs change. Focus on compliance in the early stages. Still, as you scale and expand, your outsourced team can adapt and help you build growth-ready processes and provide deeper insight into revenue strategy, evolving the service with changes in your team and goals.

5. Outsourcing accounting is more expensive

Adding a new external function feels like an additional cost. But outsourcing can actually simplify your financial management processes. It can be more cost-effective in the long run. That will then manage all your processes in-house.

• Outsourcing can provide access to specialized systems. It can handle manual work and experts for advice. This makes it more cost-effective than hiring a full-time employee.
• Outsourcing can also provide scalability for businesses. It enables them to grow and expand their operations. This is without worrying about hiring additional staff or acquiring new technology.
• Outsourcing can save time and reduce errors by automating manual bookkeeping. It can be done while providing accurate financial data to inform business decisions.

6. Outsourced accounting is impersonal

Working with an off-site provider for an accounts service might feel impersonal, remote, and hybrid, but working in today's digital age is increasingly the norm, making collaborating with non-premises colleagues quicker and easier.

I regularly sit down with my clients to explain their accounts, talk through financial performance, and discuss their plans. My role is to help businesses achieve their goals by providing a fresh perspective and innovative ideas, whether from an objective viewpoint or offering insights and recommendations on improving financial performance and driving business growth.

Contact Fino Partners to learn more about how outsourcing your accounts or finance function can help you meet your goals.