Over the course of hundreds (if not thousands) of conversations with prospective clients and referral sources – I have heard nearly every excuse in the book as to why someone might choose not to outsource their back office accounting function. I recognize and respect that business process outsourcing is not for everyone. However, I compiled a list of the most common reasons that I have heard over that past few years and added some commentary as to why the stated reason not to outsource might not be relevant.
It’s not the right time.
To me this is like having children- is there ever a right time to have a child? Is there ever a right time to move forward with a major change to your business? Often we are forced to adapt because of an aging workforce, competition, technological advances, or a host of other external pressures. Outsourcing your accounting is not something you will ever be forced to do. On the other hand, choosing not to do it because of timing is not a good reason. If you have at considered outsourcing in the past, then it’s likely that the accounting function is no longer meeting your basic requirements. The longer you wait, the further your business will fall behind.
Fear of losing control over the accounting function is a normal response to have when confronted with the decision to outsource. As the Director of an outsourced accounting practice – I can assure you that our company was designed with segregation of task centric duties in mind, and we employ a diverse team to execute those duties. When considering long-term needs such as accounting, our business is built on creating processes to manage each client’s overall accounting function. It is those repeatable processes that also provide quality control. We have the procedures, technology, and a structure that envelops the entire process so that the service delivery is consistent, efficient, and accurate.
Many business owners delegate way too much responsibility to lower level team members. The Association of Certified Fraud Examiners estimates that an average company loses 5% of its revenues each year due to fraud. If you are not outsourcing, then you are sharing your banking credentials, payroll information, and check signing authority with staff members who are most likely reconciling your bank statement. I think that it is easy to see the correlation here.
When you outsource with us, you can expect to work with qualified professionals with clear segregation of duties and internal controls over accessing your data. The most important piece is that you still maintain control and access to your most sensitive information while being able to leverage cloud-based data protection.
My team knows my business…
That may very well be the case, but let me just be frank: they don’t know accounting like we do. Much of the accounting function is made up of transactional processing tasks, and data entry specialists do not need to know your business inside and out in order to perform these tasks. Depending on the complexity of your business – your team might be faced with specialized tasks or even transactions that are beyond their skillset. When that’s the case one of two things happens:
- • They must reach out to someone who does have the knowledge (typically your CPA that is billing by the hour) to ensure the transaction is recorded correctly, OR
- • They go ahead and record the transaction incorrectly and the CPA that you are paying by the hour must untangle the mess at the end of the year.
You can avoid the two scenarios above by choosing to outsource your accounting.
It costs too much
Most outsourcing relationships that are based purely on cost tend to fail. If you believe that business process outsourcing is too costly, then perhaps you have not considered all the costs you can potentially replace. Additionally, you must consider the potential value that your current team members might add by reallocating their talents to value-added activities. When we present prospective clients with the comparison of costs they are often surprised at the numbers. If the notion of outsourcing being too costly is preventing you from making the change, then you should consider speaking with a reputable firm like us so that we can walk you through that analysis.