(Updated on May 2023)
Outsourcing accounting services is becoming a common practice for CPA, EA, and accounting firms across the states. There are many benefits of outsourcing accounting services such as reducing cost, saving time, getting flexibility, gaining expertise, and managing risk.
However, the majority of CPA firms are unsure of how to get better outcomes from outsourced accounting firms to develop their business.
If you aren’t getting the expected results after using outsourced accounting services for your accounting firm, take a step back and make sure you aren’t making any of the following mistakes. It is also useful if you still haven’t outsourced and are planning to outsource accounting services.
1. Not setting clear expectations and goals
A lack of clarity in the requirements and scope is the primary reason for outsourcing failure. It is important to set clear expectations and goals for the outsourcing relationship, including timelines, deliverables, and performance metrics. This will help to ensure that both you and the outsourcing provider are working towards the same objectives and that the relationship is productive and successful.
2. Not checking the technical expertise
It is important to check the outsourcing provider’s technical expertise when outsourcing accounting functions because it’s crucial that the provider has the necessary knowledge and skills to complete the work accurately and efficiently. Without proper technical expertise, the firm may not be able to complete the work to your satisfaction or may make mistakes that could impact your business.
For example, if you’re outsourcing tax preparation and the outsourcing provider lacks the necessary technical expertise, they may not be able to accurately prepare and file your clients’ tax returns, which could lead to issues with the IRS or result in your clients paying more in taxes than necessary. Similarly, if you’re outsourcing bookkeeping and the outsourcing provider lacks the necessary technical expertise, they may not be able to properly record and organize your financial transactions, which could lead to issues with financial reporting and decision-making.
3. Focusing Solely on Cost
While outsourcing can help you save money, it should not be the only factor you consider. A focus solely on cost can lead to choosing a partner based on the lowest price, rather than the best value. You should also take into account the quality of work, experience, and expertise of the outsourcing partner. The right outsourcing partner can help you achieve your goals, reduce costs, and increase efficiency, but it is very important to look beyond the price tag.
4. Neglecting to establish clear communication channels
Communication is key to the success of any outsourcing relationship. Be sure to establish clear channels of communication, including a designated point of contact and regular check-ins, to ensure that there are no misunderstandings or miscommunications. This can help to prevent problems from arising and ensure that you both are on the same page.
5. Not considering the long-term implications
Outsourcing is a long-term commitment, and it is important to consider the long-term implications of the relationship. This includes things like the potential for cost increases, the impact on your company’s culture, and the potential for changes in the provider’s business. Be sure to consider these factors before entering into an outsourcing arrangement.
6. Not establishing a process for monitoring and reviewing the relationship
Regular monitoring and review of the outsourcing relationship is important to ensure that it is meeting your needs and goals. Be sure to establish a process for reviewing the relationship, including setting up regular check-ins and performance evaluations. This will help to identify any issues or areas for improvement and ensure that the relationship is productive and successful.
7. Failing to consider time zone differences
Time zone differences can also be a challenge in an outsourcing relationship. Be sure to consider the potential impact of time zone differences and take steps to address them, such as setting up regular calls at a time that is convenient for both parties. This can be especially problematic if the time difference is significant, as it may be difficult for people in different time zones to find a mutually convenient time to meet or communicate.
8. Choosing the Wrong Partner
Choosing the wrong outsourcing partner can lead to subpar work quality, missed deadlines, and even legal complications. It is crucial to do your due diligence before choosing an outsourcing partner. Investigate the company’s reputation, experience, and expertise in accounting. Ask for references and testimonials from previous clients. Evaluate the quality of their communication, responsiveness, and the level of support they offer.
In conclusion, outsourcing can be a valuable strategy for accounting firms looking to increase efficiency, access specialized skills, and reduce costs. However, it’s important to avoid common mistakes when outsourcing, such as failing to properly research and vet potential outsourcing partners, not clearly defining roles and responsibilities, and failing to establish effective communication and collaboration channels. By avoiding these mistakes and carefully considering the potential benefits and risks of outsourcing, accounting firms can successfully leverage outsourcing to improve their operations and better serve their clients.
Infinity Globus specializes in providing top-quality outsourcing services to accounting firms. With years of experience and a team of highly skilled professionals, we are well-equipped to handle a wide range of accounting tasks and functions. Contact us today to learn more about how we can help your firm succeed.