Most companies consider hiring a virtual accounting/HR/finance team when they're small or are just starting operations. But outsourcing finance, HR and accounting departments can be the right move for larger companies, as well.
If you're a startup or small business, outsourcing is a fantastic solution because it's so much more affordable than trying to hire and retain experienced full-time staff. At this stage of your growth, the bang for your buck is undeniable. It always (yes, always) makes sense to get a team of fractional outsourced talent.
Just don't put it off. One common mistake we see businesses make is getting professional accounting services too late. No matter how small your operation is, you need professional advice from a managerial accountant, not just a tax professional. Bookkeeping is not enough. Entrepreneurial startups that avoid getting professional and/or accrual basis accounting support eventually may need to go back several years and restate their financials, which is both laborious and expensive.
The same holds true for getting support on HR issues, which often involve complicated and admittedly confusing rules. Noncompliance in areas such as payroll overtime can lead to painful regulatory scrutiny (think audits) and costly fines.
Outsourcing is an obvious fit for small businesses, but what about when your revenue surpasses the $25 million mark? In this "middle-market" range, it's a strategic solution.
At this point in your growth, it's time to assess and improve. Outsourcing finance, accounting, and HR expertise allows your company to continue to gradually scale in a variety of ways.
First, your pool of talent often needs an upgrade or specifically augmented skill support. For example, your in-house financial team can be so busy with day-to-day operations that they lack the time for strategic tasks, such as financial projections. It's common for an existing CFO or controller to ask for outsourced help completing these kinds of non-recurring projects. Alternatively, the in-house staff may want to work on strategic projects and employ an outsourced team for the recurring accounting processes.
Second, companies of this size will typically require a process refresh. It's inevitable that certain habits will need to be reviewed and perhaps broken. For instance, any processes that are dependent on paper, outdated software or a particular employee's knowledge will need to be updated. It's time to stop doing things the way they have always been done ― and having access to a team of outside talent will bring fresh ideas and perspectives to the workflow.
Finally, your technology will need a review, as well. Outsourced accounting teams are ideal partners in adopting new technology because they work with many companies and have access to myriad people, processes and procedures. They are highly adaptable and can help champion new systems or initiatives.
So if you're a small or mid-market firm, consider outsourcing. It may be just what you need to dust offthe books and adopt more strategic business processes to support the continued growth of your business.
Want to learn more about outsourced finance, HR and accounting services? Contact our outsourcing experts.
