Outsource Accounting & Bookkeeping; As a CPA Firm You Might Not Be, But Your Competitors Are
Posted by: Dr. Devaansh | Posted on: October 6th, 2016
Imagine a patient approaching a physician, with a handful of over the counter drugs, and then compelling the physician to start the treatment with that OCD – over the counter drug. The physician will upfront negate the chances of treating that patient. No physician would take the risk of practicing with help of OCDs.
Sad to say but same is the scenario with accounting & bookkeeping, and more unfortunate is the fact that it is been conducted this way since decades. Accounting and bookkeeping activities are controlled by over the counter drugs in form of Do it yourself or the DIY approach. But this sabotages the efforts put in to grow the business, both by the CPAs and their clients. None of the clients of a CPA will be eager or happy doing the daunting task of accounting and bookkeeping.
The fact remains that every business owner, to a may be small – medium or fortune 500 analog company, will be more than interested in spending their time focusing on the core activities to their business instead of managing their accounting and bookkeeping activities. On the other hand, the CPA firms also know that more the time their clients spend on routine accounting and bookkeeping activities (with less or no accounting knowledge), there is going to be more clutter than clarity.
In turn the CPA himself would have to spend more time cleaning up the mess, the client created. The CPAs, in order to prevent further mess in the books of accounts, then start taking up the accounting and bookkeeping activity of their clients. The CPA firm’s staff does all the work their clients or client’s staff used to perform.
However; when CPAs take up the work, they are expected to do it faster, easier and more accurately as compared to those in-house arrangements. Accountants are now in a position to collaborate with their clients, and can customize the services every individual client account – basis their need and preferences. So by taking up the complete charge, CPAs address their client’s pain areas, while eliminating their own pain which was earlier caused due to the erroneous bookkeeping activity of their client.
But this is not where the story ends.
CPA firms upon taking up the entire accounting and bookkeeping responsibility on behalf of their clients; are left with absolutely no time to expand their own business. So how should CPA firms handle this situation?
The best way out here is that CPA firms should outsource accounting and bookkeeping tasks at the first available opportunity. This will help them focus more on expanding their business, whereas it will also help them in adhering to IRS deadlines for tax filing and several other compliance activities. Some of the CPA firms also have a question that how already outsourced work, can further be outsourced to a third party vendor? Is it fine to do so? But it seems after reading the benefits enlisted; outsourced accounting and bookkeeping will become a key element for a lot of CPAs.
1. It saves cost
Outsourcing is not an additional overhead. In fact outsourcing solution providers can help you save considerably, as most of these offshore partners provide offer services at very low cost, mostly due to the lower labor and living cost at their location. Apart from this, you also save dollars that you need not pay in form of salaries and benefits to your full-time/part time employees. In case you have those extra funds and can afford in-house accounting- bookkeeping teams, why not use it as an investment to increase and expand your business?
2. It saves time
Once the business starts growing, in this case once the client base to the CPA firm increases, one gets busy managing the money and not expanding the business. Outsourcing non-core activities like accounting and bookkeeping will work to your advantage, empowering you to focus more resources, time and efforts in strategizing the business, enhancing the revenue and strengthening customer relationships. And in case you have in house accountants why not use their expertise and knowledge to generate sales and optimize the business expenses.
3. Expert services at your disposal
Outsourced accounting and bookkeeping solution providers have a wide plethora of clientele to their credit from various domains across industries. This makes it mandatory for them to stay updated with latest developments, enhancing their skills and qualifications to stay competitive in the market. This certainly ensures that upon outsourcing, the CPA firms are handing over the responsibilities to a reliable outsourcing partner. This also can be treated as an opportunity to hire more skilled a professional, at comparatively less price.
- Only incompetent professionals outsource their in house jobs or back office operations; is a myth proved wrong long back.
- CPA firms or accounting firms, in order to survive and grow the profession further; should train, develop and educate those upcoming professionals and it has come top down. What about the data security when work is outsourced to destinations like Philippines, Bangladesh and places full of poverty and illiteracy?
- By outsourcing accounting processes, the main motive is to reap benefits of the economy; but eventually end up paying into an overseas economy and the cost savings as a component of the total expenditure of the business is minimal.
Yes the reason for using the word disbelief is that aforementioned challenges are the ones, encountered by early adopters in the 90s. Today CPA firms directly hire staff to perform task based and compliance roles, enabling skilled accountants to do what they are best at and satisfied with. They engage their clients with meaningful and value adding conversations leading to billable work. May be your CPA firm is not outsourcing, but today your competition is doing it – as it is becoming a mainstream activity. We are talking of outsourced solution providers who are billing their clients across in more than 51 countries and are increasingly becoming the innovative partner to their clients.