Outsourced accounting helps your business grow, whether new or established. Businesses are turning to outsourced accounting for an affordable, innovative solution. But finding the correct accounting partner is key.
Outsourcing is now a familiar practice worldwide, driving economical and easing operations. As outsourcing rises, the number of service providers has flooded. Outsourcing provides a broad range of advantages. But, businesses must stay alert when picking their outsourcing partner. They should choose between full outsourcing, selective outsourcing, or staff augmentation.
This blog covers outsourced accounting and how to pick the proper provider.
Table of Contents
Understanding Outsourced Accounting Services
Outsourced accounting means charging economic tasks to an external provider. Rather than employing a permanent on-site team, you depend on professionals who handle things remotely. These services can include:
- Bookkeeping
- Payroll processing
- Tax Preparation
- Financial reporting
- Budgeting
- CFO-level strategic advisory
Accounting services encompass all activities tied to managing a business’s financial data. This includes recording, maintaining, processing, and reporting financial transactions. A good outsourced accounting team becomes an extension of your business. They help you stay organized, make better decisions, and plan for future growth.
Why Select Outsourced Accounting
1. Cost-Effective
Employing permanent accounting staff is expensive, with costs like wages, benefits, and training. Outsourcing lets you pay only for the services you require, with no secret overhead.
2. Scalable Services
As your business grows, so do your financial needs. You can scale outsourced services up or down based on your size, seasonality, or goals.
3. Access to Expertise
Outsourced firms offer expert teams knowledgeable in the latest accounting, tax, and technology trends. You enjoy their deep knowledge without needing to manage it all yourself.
How Common Is Outsourcing in Finance and Accounting?
Outsourcing finance and accounting is common for cost-efficiency and specialized skills. These functions were usually managed in-house by qualified accountants. The need for lower costs and higher productivity has led many companies to seek external support. According to a Fortune report, 54% of all companies use third-party support for customer interactions. Additionally, 71% of financial service executives outsource or offshore parts of their operations. The primary causes for this shift are cost savings, specialized expertise, better data security, and more emphasis on main operations. Industries like consumer goods, food, and beverages favor this model.
A growing trend within this shift is selective outsourcing. TechTarget defines it as outsourcing certain functions while keeping others in-house for better control and alignment. This differs from staff augmentation, where temporary external professionals fill skill gaps. Toptal defines staff augmentation as using temporary external personnel. Selective outsourcing, but, transfers specific processes to a third party for strategic purposes.
Selective outsourcing is gaining strong traction globally. A study by P. Everaert at Ghent University found that 53% of Belgian SMEs use selective outsourcing for accounting services. In the United States, this trend has also grown, especially post-COVID-19. The pandemic accelerated remote work and led many small businesses to adopt outsourced accounting solutions. Research cited by Newswire from Global Industry Analysts Inc. the U.S. finance and accounting outsourcing market reached $18.3 billion in 2021, making up 45.7% of the global market.
Today, outsourcing is more than a cost-saving tactic, it’s becoming the norm. Remote work, diversity, and global talent drive co-sourcing and offshoring strategies. Still, businesses must proceed with caution. Outsourcing offers great benefits if the partner is well-chosen and the arrangement is organized. A wrong selection can lead to inefficiencies and extra expenses, highlighting the demand for strategic planning.
Steps to Choosing the Right Outsourced Accounting Partner
1. Know Your Business Needs
Before selecting an accounting company, think about what you require help with. Ask yourself: Do I need basic bookkeeping or full financial planning? Will I need payroll or tax support? How often do I need reports weekly, monthly, or quarterly? Do I want advice from a CFO? Knowing what you need will help you find the right partner.
2. Check Technology and Software Compatibility
A modern accounting firm should master QuickBooks, Xero, or NetSuite, or help you switch. Make sure their tech matches your existing setup or improves it.
3. Look for Experience and Reputation
Reputation matters. Ask for client references, read online reviews, and check how long their clients stay with them. A high client retention rate usually means reliable service and strong relationships.
4. Assess Their Communication Style
Regular, clear communication is essential. Ask how often they’ll update you and who your main point of contact will be. Do they assign an account manager or a team? Make sure their communication style fits yours.
5. Understand Their Pricing Model
Accounting firms usually offer different pricing options:
- Hourly Billing: You pay based on time spent, but costs can vary from month to month.
- Fixed Monthly Fees: A flat rate for agreed services—easier to budget and plan around.
Choose a pricing model that fits your budget and offers transparency.
6. Ask About Security and Compliance
Your accounting partner will handle sensitive financial data. They should use secure systems, and encrypted platforms, and have clear privacy policies. Ensure they follow regulations and have checks to prevent errors or fraud.
7. Look for Long-Term Support and Strategy
Beyond day-to-day bookkeeping, a great accounting partner offers long-term financial guidance. Services like forecasting, budgeting, and CFO insights help plan investments and manage growth.
8. Check the Cultural Fit
This may seem small, but it matters. The firm should align with your company’s values, work style, and communication habits. A great cultural fit means smoother teamwork and better results. Pick a bold, dedicated partner committed to your business’s success.
How to Choose the Right Outsourcing Partner
Ensure the outsourcing partner is the right fit for your business before choosing. Start by checking if they can match or even exceed the skills and quality of your in-house team. Their terms should be fair and offer value for both sides. A strong reputation and experienced leadership are key signs of reliability. Choose partners with specialized expertise to enhance your operations. It also helps if they can show a history of successful projects like yours. Another important factor is cost. Will they help you save on payroll and operations? Lastly, make sure they provide consistent quality and ongoing support. Proceed if outsourcing offers clear benefits and the provider meets all criteria.
Conclusion
Choosing the right outsourced accounting firm supports your success, not only saves time. The right fit will manage your books and help you grow with confidence and smart planning.
Expertise Accelerated (EA) in Greenwich offers outsourcing and co-sourcing/staff augmentation services. Led by U.S. veterans and global talent, helps businesses save up to 60% on payroll costs without compromising quality. EA’s CEO, Haroon Jafree, CPA, has achieved great results for Sabra Hummus, Safford Roads, and Hillshire Brands. Their hybrid model combines on-site guidance with remote finance solutions. We specialize in customized accounting services that grow with your business. From bookkeeping to CFO guidance, we’re here to help make accounting simple, secure, and scalable. Let’s talk about your goals. Contact us today to see if we’re the right fit for your business.