Outsourcing can be a smart move for many companies, but it’s important to know what you’re getting into.
Specifically, understanding the roles that outsourced accountants play within the broader finance function of a business is crucial.
This helps ensure you’re making the most informed decisions for your company’s financial health.
In this article, you’ll learn about the different financial tasks that outsourced accountants can handle.
From general accounting duties to more specialized roles in areas like Financial Planning and Analysis (FP&A), tax planning, and even audit preparation.
So, whether you’re a small business owner, CEO, a manager in a larger corporation, or just someone interested in the world of finance, read on to find out what outsourced accountants can do for your organization.
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Understanding The Broader Finance Function
Before diving into the specifics of what outsourced accountants do, let’s first look at the broader finance function within a company.
This function includes several key areas like Financial Planning and analysis (FP&A), Treasury and Cash Management, Tax, Audit, and of course, Accounting.
Each of these areas serves a unique but interconnected role in helping the company maintain financial health.
So, where do outsourced accountants come into play? Well, they can serve in one or more of these areas, depending on your business needs.
These professionals bring specialized skills and technology to the table, allowing your company to benefit from top-level expertise without the need for a full-time in-house team.
Now, let’s break down exactly what outsourced accountants do for your business.
1. Financial Planning and Analysis (FP&A)
FP&A involves creating budgets, analyzing cash flows, and making projections for the future. It’s like creating a financial roadmap for your company.
For this, FP&A teams need precise and timely data, and that’s where accounting comes in.
Outsourced accountants contribute to FP&A by providing the critical data needed for these analyses.
They can compile data on revenues, expenses, and cash flows, making sure that the FP&A team has all the necessary information to guide the company’s strategic planning.
2. Treasury and Cash Management
Treasury and Cash Management is all about overseeing the company’s money.
This includes making sure there’s enough cash on hand for day-to-day operations, as well as optimizing cash reserves for the long term.
Outsourced accountants can assist in this by helping to track cash inflows and outflows.
They can also help with optimizing cash reserves, ensuring that the company’s money is placed where it can generate the best returns while minimizing risk.
Every company has to deal with taxes, and it’s often more complicated than simply filling out a few forms.
The tax function involves understanding and complying with federal, state, and even local tax laws.
Outsourced accountants can be invaluable here.
They can prepare and file tax returns, identify tax-saving opportunities, and help with tax planning to ensure that the company minimizes its tax burden while staying compliant with the law.
Both internal and external audits are crucial for evaluating the financial health of a company and identifying any potential risks.
These audits rely heavily on accurate accounting data and processes.
Outsourced accountants can aid in audit preparation by ensuring that all financial data is accurate and up-to-date.
They can also help identify potential areas of risk and suggest ways to improve internal controls, thereby aiding in risk mitigation.
By understanding these different areas of the finance function, you’ll have a clearer idea of how outsourced accountants can fit into your organization.
Core Components of Accounting
After exploring the wide-ranging roles that outsourced accountants play in the broader financial landscape, it’s time to focus on the specific tasks within the accounting department.
Think of this department as the financial engine of your company, where each component has a specialized role, all working in unison to keep your business financially healthy.
Now, let’s break down these core areas to understand how outsourced professionals can make a meaningful contribution.
1. Accounts Payable
Accounts payable is all about managing the money you owe.
From utility bills to vendor invoices, these payments need to be tracked and processed.
Outsourced accountants can manage your accounts payable efficiently, making sure bills are paid on time to maintain good vendor relationships.
2. Accounts Receivable
On the flip side, accounts receivable focuses on the money coming into your business.
This includes everything from invoices to customers to tracking payments.
Outsourced accountants can handle this by sending invoices, following up on late payments, and recording received payments into your accounting system.
Managing payroll is not just cutting checks.
It’s also about keeping track of employee hours, calculating taxes, and even managing benefits.
Outsourced accountants can manage all aspects of payroll, ensuring that employees are paid accurately and on time, while also making sure that all payroll taxes and reports are filed correctly.
4. General Ledger Accounting and Accruals
The general ledger is like your company’s financial diary, recording every transaction.
Accruals are adjustments made to reflect revenue and expenses that haven’t been processed yet.
Outsourced accountants can help by managing these entries, ensuring that your financial statements are accurate and up to date.
5. Fixed Asset/Inventory Management
Managing fixed assets like equipment and inventory is crucial for accurate financial reporting and tax calculations.
Outsourced accountants can track these assets, calculate depreciation, and even help with inventory counts to make sure everything aligns with your financial records.
6. Balance Sheet Account Reconciliations
Reconciling your balance sheet means ensuring all your accounting entries match up with your actual financial assets and liabilities.
This is vital for accurate financial reporting.
Outsourced accountants can perform these reconciliations regularly, identifying any discrepancies and correcting them.
7. Revenue and Expense Accounting
Properly recording revenue and expenses is key to understanding your business’s financial health.
Outsourced accountants can help by accurately categorizing and recording these transactions, allowing for better tracking and analysis.
8. Financial Reporting
Finally, the ability to produce accurate financial reports is vital for any business.
These reports help stakeholders understand the company’s financial position and performance.
Outsourced accountants can compile this data and generate comprehensive reports like profit and loss statements, balance sheets, and cash flow statements.
By outsourcing some or all of these core accounting tasks, companies can free up valuable time and resources.
This allows for a greater focus on strategy and growth, while also benefiting from the specialized skills and tools that professional accountants bring to the table.
Benefits of Outsourcing Accounting Services
So, we’ve gone over the different ways outsourced accountants can play a vital role in both the broader financial functions and specific accounting tasks.
But what are the advantages of outsourcing accountants?
Let’s break it down:
- Cost Savings: One of the most apparent benefits is the money you can save. When you outsource, you cut down on the costs that come with full-time employees, like benefits, office space, and training. You pay only for the services you need, when you need them.
- Expertise: Outsourced accounting firms specialize in what they do. This means they bring a high level of expertise to the table. They stay updated on the latest industry practices, tax codes, and software, offering you the kind of specialized knowledge that would be expensive to develop in-house.
- Time: Time is a resource you can’t make more of. Outsourcing your accounting frees up your time so you can focus on growing your business. No more getting lost in spreadsheets or tax forms. Leave that to the experts.
- Flexibility: Every business is unique, and outsourcing offers the flexibility to choose which functions to delegate. Whether you need help with payroll, tax preparation, or full-scale financial management, you can find a service tailored to your specific needs.
By weighing these benefits, companies can make an informed decision on what aspects of accounting and financial management to outsource.
This allows them to focus their in-house resources on strategic goals, confident that their accounting is in expert hands.
We’ve explored how outsourced accountants can significantly contribute to both the broader financial functions and the specialized tasks within the accounting department.
Their expertise spans areas like Financial Planning and Analysis, Treasury and Cash Management, and various core accounting responsibilities such as payroll and tax planning.
Outsourcing provides companies with a practical way to save money, gain expertise, and free up valuable time.
Organizations can tailor their outsourcing choices based on budget, available resources, and specific needs, allowing them to focus more on core business activities.
The flexibility to pick and choose what to outsource makes it a strategic choice, enabling companies to direct their efforts towards growth and long-term success.
Considering outsourcing your accounting needs? Get in touch with us today.