As the complexity of financial management increases, many small businesses are missing a higher level of accounting knowledge and practice. In some cases, the owner is trying to “do it all,” and in others, controllers or CFOs have not remained current with the rapid changes in accounting technology and practice. For business owners, the resulting lack of financial data needed for good decision-making can lead to missed opportunities.
Outsourcing your controller or CFO functions provides a solution that allows owners to get real-time feedback and information about your businesses, which enables better decision-making and rapid response to changing marketplace conditions.
Most importantly, outsourcing these high-level finance functions means you can do what you are passionate about – run your businesses.
Outsourcing: A Growing Trend
Outsourcing of finance functions is an increasing trend, both in the business and nonprofit markets. Driven by several factors, outsourcing is a confluence of trends such as the availability of technology integrations, the growing complexity of financial management, and the growth of virtual services.
Technology today allows us to deliver services remotely, with client financial data residing in cloud-based platforms such as QuickBooks Online or Sage Intacct. That means outsourced professionals can provide on-demand CFO and controller services customized to a client’s needs.
For smaller businesses, that often means a full-time CFO or controller who has retired can be replaced by fractional outsourced services at a cost savings. The company no longer needs to employ a full-time professional and provide office space or pay full-time compensation and benefits. A business may need only 30 hours a month of CFO-level services or 20 hours a week of controller-level services. The exact service level is determined by the business owner in consultation with our practitioners. The services are provided by specialists who are experienced with cloud-based accounting platforms, as well as CPAs with technical knowledge and experience in business accounting.
Cloud-based accounting platforms provide banking tools, forecasting, benchmarking, and other features – in addition to bookkeeping and general ledger functions – producing up-to-the-minute data that owners need to make good business decisions. For some businesses, a financial statement can be produced right out of QuickBooks Online. The value happens when we sit down with you for a couple of hours and provide analysis, discuss ways to improve, and look at how you’re doing against budget.
Some platforms are even offering functionality powered by artificial intelligence (AI), enabling us to “teach” the software to do certain transactional work. That allows the user to focus on higher-level functions.
People are retiring and leaving jobs at a high rate these days, and a shortage of high-level finance professionals makes recruiting and hiring new CFOs and controllers difficult or impossible.
Outsourcing can provide temporary support during the transition if a company is committed to hiring a new full-time professional, or it can provide a permanent solution.
Once you decide to outsource, our accountants and bookkeepers work with you to determine the best combination of services, the number of hours per month needed, and which level of professional support is required, such as bookkeeper level, controller level, or CFO level. The ramp-up period is usually about one month.
The Outsourcing Experience
When we provide outsourced finance services for a client, we meet with them to discuss their needs and goals. Often, they are losing a high-level finance professional such as a controller or CFO to retirement. It’s been so long since they hired that person, they realize the marketplace has changed and it will be difficult or impossible to replace them. Outsourcing is the solution.
During the ramp-up period, we get to know the client’s company and processes, and we identify where greater efficiencies can be achieved. Once the outsourcing relationship is in full swing, we meet with clients monthly, to sum up their performance and exchange feedback.
The consistency of having an outsourced team with a manager who oversees everything allows owners to focus on running their businesses without the hassle of constantly rehiring finance professionals.
Is It Time to Outsource?
Most organizations turn to outsourcing their accounting, bookkeeping, and finance functions at certain times of need:
- When a CFO or controller either retires or leaves the company.
- When the owner realizes the complexity of finance functions is increasing and the company isn’t keeping up.
- Complex marketplace conditions require rapid analysis and decision making that is beyond the owner’s capability because the company has no real-time financial data.
It’s common for businesses to start outsourcing relationships with one function – for example, controller services – then move on to more functions as they recognize the value of working with an outsourced team of professionals.
Contact your Rea advisor for a conversation about how outsourcing your accounting, bookkeeping and high-level finance functions may benefit your business.
By: Michelle Thompson, CPA (Dublin Office)