A Guide To Outsourced Accounting (And Why You Should Consider It)

Outsource

In recent years it has become increasingly popular for businesses to outsource their accounting and bookkeeping. As well as offering a number of benefits, it is becoming more common for teams to be working remotely as they move to digital solutions. In this guide, we are going to break down what an outsourced accounting service is, what the benefits are and who it’s best suited for.

What is outsourced accounting?

Outsourced accounting is when a business hires a third party (outside of their company) to complete the accounting function and finance function of the organisation. Outsourced accountants handle all the finance functions of the business including; bookkeeping, payroll, financial reports, management accounting, tax, accounts payable, accounts receivable, following up debtors, and other accounts-related services.

What are the benefits?

Hiring an outsourced accounting firm has a lot of benefits such as;

Save Money

A third party for your accounting work is generally more cost-effective than hiring someone internally. Hiring in-house accountants can be expensive when factoring in office space, insurance, sick days, etc. Moreover, hiring an accounting firm allows access to a team of people with a variety of skills (versus an employee who can only do one task at a time).

Access Expertise

By outsourcing your accounting, you can actually save money and improve results at the same time. If you run a company that isn’t an accounting firm, you likely aren’t a master accountant. By teaming up with a CPA specialist you get access to someone (or a team of people) who is an accounting professional with a wide range of expertise. This makes sure your books are always accurate, payroll is compliant and completed on time, and you’re not at risk of penalties or regulation mistakes. A good firm will get it done right and do it cost-effectively.

Save Time

By outsourcing your accounting, you will spend less time overseeing the organisations financial functions and preparing financial statements, enabling you to have more time to focus on your vision and purpose. At Breakthrough, we also assist you with reporting and presenting to your board, so all the information you need in one place.

One of the biggest struggles many organisations face is the high level of regulation and compliance. Breakthrough will also assist you to reduce the complexity and headaches, whilst reducing the time and effort required to comply with the various regulatory bodies.

Improve Productivity

If you have a reliable finance team, you can have peace of mind knowing your accounting responsibilities are all taken care of. You’ll also get useful financial reporting insights showing your business performance, cash flow, budgeting and more.

Scale Up Easily

If you’re a growing organisation, having an outsourced accounting firm will make your life a lot easier. Accounting operations can be difficult, and when you’re scaling up it’s easy to get overwhelmed and caught up in all the moving pieces. By hiring Breakthrough, you’ll be working with an experienced firm that has done this many times before.

Automate & Go Digital

By working with an outsourced accounting team you also get access to all their accounting software (Xero etc) and systems, meaning you’ll be able to streamline processes and automate tasks. You’ll also be able to reduce your carbon footprint and impact on the environment by going digital and reducing wasted paper. This saves money on inventory and saves time by reducing filing and storage.

By outsourcing your accounting, you can save money and improve results at the same time.

Who is outsourced accounting for?

Outsourced accounting used to only be for large corporate companies. But thanks to advancements in technology and the world being more familiar with remote workers, it’s now available to smaller businesses and organisations. An outsourced accounting service is suited to:

Small Businesses

A small business owner that does not need a full-time accountant and chief financial officer (CFO) but requires someone with more skills than the current office manager, bookkeeper or administrative workers.

A Company Struggling To Hire

A company of any size that is struggling to find a suitable and affordable full-time employee. Also each time your accountant leaves you have to recruit, train and hope they work; outsourcing to a team of accountants will not have this problem.

Growing Companies

A growing company that wants to scale up their accounting or financial abilities.

Not-For-Profits & Charities

Accessing experienced finance professionals can be difficult for a not-for-profit. Breakthrough is very experienced in not-for-profit accounting with expert knowledge Managing Donations and Tax-Deductible Receipts, Record and Acquitting of Programs, Managing Grant Funding, and Annual Reporting obligations with various Regulatory Bodies.

People Who Need Temporary Help

A business owner or company that only needs temporary help (e.g a part-time replacement for a staff member, an accounting audit or end of year reporting).

Basically Anyone!

Outsourcing is a great option for everyone — whether you have 5 employees or 500, all organisations have compliance, payroll and reporting requirements. The sooner you start, the faster you’ll reap the rewards!

Whether you have 5 employees or 500, you still have similar requirements.
If you’d like to know how more, contact our friendly team and we’ll assist you plan out everything you need.

Common mistakes people make when outsourcing.

There are 3 common mistakes people make when outsourcing their accounting department, which are:

Choosing a firm with unaligned values.

It’s important to partner up with someone that aligns with your values. If you don’t have a shared vision and values, you can only grow so far. At Breakthrough we share your excitement for making an impact. Our true passion is to make a difference in the world — accounting and finances are just what we’re really good at. By teaming up with us you won’t just experience the best service and results, but you’ll be working with a likeminded organisation.

Choosing someone who doesn’t understand your business.

Sometimes with accounting outsourcing, you don’t know what you don’t know. You might think you need something and the accountant will take it too literally, just doing what you asked without taking the time to understand if that’s what you should or could do. Make sure you find someone who understands your business. At Breakthrough we have an in-depth discovery process to fully understand your needs and tailor a unique client offering at no additional cost.

What to do before you hire an outsourced accountant.

Before you hire an outsourced team, make a list of the support and services you need (e.g. bookkeeping services, reporting, payroll taxes, tax returns, monitoring transaction fees, etc.) but also your goals (e.g. increase cash flow, have better visibility into your finances and balance sheet etc.). At Breakthrough, we factor in your needs and also make suggestions based on your goals, with a tailored package to suit your individual needs.

Want to get started?

If you’d like to save time, save money and grow your organisation with industry-leading business accounting, our CPA-qualified accountants can help. The Breakthrough Office is a leading Not for Profit accounting specialist. We support Not For Profits to achieve breakthrough by filling in the gaps. No solution is a one-size-fits-all; but rather tailored for your organisation, furthering your impact and opening new doors for future growth.

Reach Out

 

Find out more about our services

How to Choose the Right Not-for-Profit Outsourced Accounting Firm
Annual Wage Review 2024-25: Key Updates for Not-for-Profits
Understanding the Director ID Scheme: Recent Convictions Highlight Compliance Importance