Is outsourced accounting right for your business?

Many local and international companies in Australia have realised that investing in an in-house accounting department does not make dollars and sense. An increasing number are transferring their accounting to outsourcers with superior expertise and software to achieve higher quality results at a lower cost. Is outsourced accounting right for your business?

Outsourced accounting typically involves transferring procedure-driven services – such as accounts payable and receivable, general ledger, billing, payroll and month end reporting – to a specialist provider. Outsourcing these functions produces productivity gains, cost savings and reduces risk.

Increasingly, small businesses are also accessing outsourced or ‘virtual CFO’ strategic-level skills to take their company to the next phase of development.

What are the benefits of outsourced accounting?

A simple transfer of work can add up to a lot of benefits for fast-growing local and multinational companies in Australia. Here are six reasons to consider it:

  1. Cost reductions
    Outsourced accounting reduces costs due to the need for fewer employees and less capital investment. There is no need to recruit, train and manage an in-house accounting department. There’s also no need to invest in office space, equipment and accounting software. In terms of savings, outsourcing your accounting should cost at least 30% less. However, the true value of outsourcing is not just saving money.
  2. Managing capacity fluctuations
    Outsourcing your accounting allows you to more efficiently handle surges in activity, making it ideal for businesses with seasonal cycles. Businesses can access numerous finance staff when they need extra help and there is no need to deal with employees taking holidays or sick days at busy times.
  3. Higher quality work with less risk
    Outsourcing means having an experienced and qualified team of accountants on your side with greater financial skills, software and expertise at various levels. As a business director, you can be assured that your work is being done in accordance with the latest regulations and best practices, and not at risk of penalties due to inaccurate work or underpayments.
  4. Freeing up time and resources
    Entrepreneurs, country managers and their staff often wear many hats. Outsourcing tasks that cost time and money – especially if they’re not core competencies and you lose sales while carrying them out – frees up valuable time to focus on the aspects of your business that drive sales, service and success.
  5. Scaleable solutions, service and efficiencies
    An experienced outsourcer can implement a finance function for your business that provides scalability, is easy to manage and tailored to your specific reporting requirements in Australia or overseas. That translates to up-to-date accounts, good cashflow forecasts, your payroll done on time, meaningful reports delivered faster – and a strong foundation for growth.
  6. Affordable strategic CFO/Controller level support
    Most small businesses don’t require a CFO on a full-time basis. However, they do need high level interpretation and analysis to identify key issues causing problems, as well as strategic business advice. Outsourcing this role costs a fraction of hiring an in-house person and gives you access to financial skills that match the big end of town.

When to outsource your accounting

If your business is entering the growth stage or starting up in a new country, your financial needs will go beyond basic financial reporting, compliance and accounts. You’ll need management reporting to make business decisions (or report to investors, headquarters etc) backed by real-time data and key performance indicators. This is often where the true value of outsourced accounting lies.

We recommend considering outsourcing if your business is:

  • Funded by investor capital
  • Entering an accelerated growth stage of its business lifecycle
  • Requiring more sophisticated financial reporting for decision-making
  • Part of an international group entering Australia

Accru Felsers has a long track record of developing customised reporting systems and providing outsourced accounting services to Australian and international businesses (especially from Germany & Europe, UK & USA).

We have seen that those with strong management systems in place from the start are more likely to thrive in the Australian marketplace. Please get in touch if you would like to discuss how we could assist your business.

About the Author
Rebecca Beitzel
Rebecca has worked on diverse consulting assignments ranging from ASX listings, business acquisitions and business process outsourcing. She also has international experience working in New York with multi-national retailers and retail property groups.
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