Outsourcing is becoming a more common practice in business. Whether it’s marketing, accounting, sales, or even operations, outsourcing has become easier than ever. But, outsourcing only works if you do. It takes an effort on both sides to get the best results. Here’s how to make outsourced accounting work for your business.
6 Tips to a Successful Outsourced Accounting Partnership:
Outsourcing is meant to take the work off your plate. However, it’s still your business. If you’re outsourcing any function of your business, there will still be decisions that you need to make. If you have decided you want to approve all AP before payments are made to vendors, then you need to respond to the request for approval. Without timely response, vendors get paid late and processes lose efficiency due to multiple follow ups. If your accountant has one question left to close out the month, try to answer quickly so your financials are not hung up.
Regardless of whether you outsource or have in-house staff to perform business tasks, if you don’t communicate your intentions, your needs, or your actions, things aren’t going to get done the way you want. When you sign a contract for a new vendor, send the contract and any details to your accountant. This avoids missing the first payment or coding the new expense to the wrong project or division. If you cancel a contract or lose a customer, let your accountant know ASAP. If you are looking at implementing a new system, your accounting team needs to know about it (and be a part of the selection!). As an entrepreneur, you can get so busy making deals or putting out fires, you forget to communicate decisions you’ve made to the people who need to manage those decisions.
Outsourcing works best when processes are followed. Outsourcing can create extreme efficiencies in your business, but only when the processes that have been developed to create those efficiencies are followed. If a process is put in place for you to add coding information to your bills prior to sending them over to your accountant, doing so alleviates going back and forth to get the information needed. If you agree with your accountant that bills will be paid on Fridays, send all bills in by Thursday to make sure they get paid. Avoid sending in one bill per day for payment, which takes 5 times as much effort as it would take to pay all 5 on Friday. Work with your accountant to develop processes that work best for you, but, once they are in place, do your best follow them.
The best way to stay on the same page with your outsourced provider is to have regularly scheduled touch points. Whether it’s a weekly call, a monthly video conference, or a quarterly in-person meeting, show up to those meetings. If a conflict arises, make sure to reschedule as far in advance as possible. This allows both parties to make the most efficient use of their time.
Listen to your accounting team. If your accountant says not to move forward on a particular project or hire a certain employee because you don’t have the cash to do so, listen. When it’s suggested to follow a different process to create efficiencies for your vendors, your customers, and/or your staff, listen. When your accountant shows you that a certain line of business is not profitable and hasn’t been for some time, listen. It’s possible your accountant may tell you an acquisition does not make sense and would hurt your business, listen. This does not mean your accountant should be making your business decisions for you, but they are a valuable resource. The data doesn’t lie. Listen to what it’s telling you in order to make sound business decisions.
One benefit of outsourcing is that it creates efficiencies. However, many of those efficiencies are created by batch processing. Batch processing is “the bookkeeping or accounting practice of accumulated multiple source documents like employee time sheets and processing them all at once each day, week, or month. In other words, bookkeepers that use batch processing wait to record or input information into the accounting system until several different documents can be input” – My Accounting Course. There are scheduled times for checking emails, processing AP payments, reconciling bank accounts, etc. If you have an urgent need, call your accountant and discuss to ensure it gets handled timely. Otherwise, you may be expecting a response to an email on something you needed ASAP and your accountant doesn’t have plans to check the email until later that day.
If you want to streamline for efficiency, and value accounting data in your business and how it can help you to make better decisions, you should consider outsourcing. There are many benefits to outsourcing – cost savings, redundancy, training, oversight, and more. However while outsourcing your accounting provides many benefits, it also comes with adjustments. Outsourcing is a partnership. If you are looking to partner with your accounting team to create the best outcome for everyone, then outsourcing might be the right path.
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By: Shauna Huntington