The Comprehensive Guide to Outsourced Finance Departments: Benefits, Costs, and Best Practices

Depending on whether you choose an onshore or offshore outsourcing provider, you could even be in an entirely different timezone from your finance team. Instead of spending tons of time and money on finding the right employees, hiring an outsourced team allows you to get started immediately. By outsourcing complex finance tasks, you can dedicate your time and resources to your core business activities instead. Companies outsource their financial management functions for several reasons, which we’ll discuss in the next section. If an organization wants to scale, it will need to ensure its current employees can keep up with the demands of expansion. However, if they are bogged down with tedious, manual tasks, there is little time and energy to train and develop their skills for growth.

1. Thanks to the availability of full-integrated accounting platforms, accountants can help update your books every time a transaction occurs.
2. By outsourcing these services, you can take advantage of the multiple layers of review built into your provider’s processes, which allows them to detect most errors on time.
3. You can even set goals, milestones, and also ensure smooth task collaboration between your in-house and outsourced teams.
4. With many aspects of finance and accounting fitting the bill as transactional and/or rules-based, such jobs lend themselves to outsourcing and, in turn, ease the pressure on small and medium-sized businesses.

The right outsourced accounting firm and Finance as a Service provider should not only understand the financial side of your business but also have the knowledge and insight into your industry. They should be able to fill your finance and accounting gaps with modern software solutions and best practices. They should also be prepared to learn the complexities and uniqueness of your business, along with its specific financial goals.

What Are the Benefits of Outsourcing Finance?

Even if you at account have the numbers, not being able to interpret and understand them also calls for an outsourced financial backup to ensure that your business is heading in the right direction. Access to tax and wealth advisors can assist in building an efficient financial roadmap for your business. They can help you with individual tax planning, business continuity, disaster recovery and risk management, risk mitigation, and other aspects of financial planning.

Productivity management

To discuss outsourcing your finance and accounting, as well as our customizable solutions, request a demo today. Once the trial project is done and analyzed, you should have a clear picture of how well an outsourcing provider fits your financial and accounting needs. If errors in your books keep appearing, that means the person taking care of your books is not doing the right job. By outsourcing these services, you can take advantage of the multiple layers subcontractor billing requirement of review built into your provider’s processes, which allows them to detect most errors on time.

How To Choose The Right Outsourced Service Provider

First of all, building and managing in-house finance and accounting departments can be costly. From the hiring, onboarding, and training costs to salary and benefits to office space and equipment, you will have to spend thousands of dollars to handle your financial and accounting needs. In the past, when the outsourcing industry was getting momentum, companies would hire an accountant that would come into their office on a regular basis.

Turnover, outdated systems, lack of talented in-house finance staff and inadequate budget to hire a strategic CFO can put the companies valuation at risk. Outsourced accounting service providers can customize their services, providing companies with only the financial services they need to fill their gaps. Recognizing the right moment to switch to outsourced finance and accounting services is crucial for the seamless growth of your startup. Typically, this decision comes into play when the complexity and volume of financial tasks begin to overshadow your ability to focus on business growth.

Finance professionals do not usually take on accounting functions, which is a critical distinction to keep in mind when outsourcing your finance roles. This approach involves delegating financial tasks — from routine bookkeeping to complex tax planning — to external professionals. These specialists bring a wealth of experience and specialized knowledge, ensuring high-quality financial management that aligns with industry standards and regulatory requirements. Are you looking for complete financial service outsourcing, or do you need to outsource specific tasks? What kind of privacy or security measures does your business require (depending on the operations and data that you will share with the outsourced team)?

Fractional CFO services provide startups with the expertise of a chief financial officer on a part-time or as-needed basis. An outsourced CFO brings an arsenal of high-level financial acumen, offering insights into cash flow management, financial forecasting, risk mitigation, budgeting, and investment strategies. This role is exceptionally significant during pivotal phases such as fundraising rounds, market expansion, financial restructuring, or the significant reduction of operating expenses. Outsourcing finance and accounting refers to the practice of hiring an external team or company to handle all or part of your financial operations. This could include bookkeeping, tax preparation, payroll, budgeting, financial reporting, and more. The most obvious red flag telling you breakeven point bep definition that it’s time to outsource is not having the critical numbers you need to make the right business decisions.