Tag Archives | bookkeeping

Burned by Outsourcing Accounting

Making the decision to enlist an outside company to handle any portion of your business is a big choice, and you should not take it lightly. With the right outsourced professionals, your business stands to improve leaps and bounds. However, we have heard so many stories of companies being burned by outsourcing accounting and bookkeeping. If you select the wrong outsourced service provider, you risk causing irreversible damage to your company with things like:

  • Inefficient and unorganized systems
  • Poor communication
  • Lowered standards
  • Unhappy customers

So, before you select an outsourcing company, be sure you understand their strengths, expertise and service model, and the types of pitfalls to avoid. When you select the right company to partner with, your business will work smarter, your systems will improve. You and your employees will have more time and resources to dedicate to your company’s primary functions. Then, your business will flourish.

4 Common Mistakes to Avoid Being Burned by Outsourcing Accounting

Like almost any choice you make in business, outsourcing your company’s bookkeeping, accounting, controller and/or CFO has both pros and cons. While outsourcing frees up your time, saves company dollars on benefits and payroll, secures an unbiased perspective on business finances, and can potentially increase profitability, choosing the wrong company outsourcing can be detrimental to your business. Before you decide to partner with an outsourcing company, take precautions to avoid the following 2 things:

  • Being burned by outsourced accounting
  • Running into these all-too-common problems with outsourced accounting and bookkeeping services

1. Inefficiency

We often have new clients approach us because, in spite of having a complete outsourced accounting department, their businesses continues to run into cash flow issues. When our representatives look into their back office practices, we find extreme inefficiencies. When evaluating the bookkeeping practices established by other outsourced providers, we have seen everything including the following:

Facing these types of concerns, companies have no chance of leveraging the numbers reported by their back offices for strategic planning, cash flow improvement, or revenue generation. They also face audits and paying potential fees and penalties due to non-compliance and tax errors. In these cases, extremely inefficient outsourced bookkeeping severely curtail the potential for business growth.

2. Hidden Costs or Prices Which Seem Too Low to Be True

Many outsourced services advertise prices way below average. They collect the true value of their services in additional fees and hidden costs. In the end, clients are not happily surprised when the bill arrives. Outsourcing providers will also sometimes charge well below average. They will consequently deliver well below average quality service with copious mistakes and a disregard for timeliness. It is also a good idea to be wary of rigid, all-or-nothing service options. Most reputable companies offer a range of flexible, customizable service plans.

A truly professional bookkeeping provider will openly disclose the cost of service, additional fees for add-ons, and offer clients a range of pricing and subscription options.

3. Lack of Communication, Expertise, and Professionalism

We group these outsourcing concerns together because they often occur together. Below-average outsourced accounting and bookkeeping providers hire self-taught bookkeepers. They often do not keep enough employees on staff to provide consistent service in the event of an employee’s illness, vacation, or decision to leave their company. In addition, businesses working with outsourcing companies located overseas might also face a breakdown in communication due to cultural differences and time zones. All of these concerns can lead to a lack of communication, expertise, and professionalism.

These providers often operate without a written set of policies or established procedures for their own business operations, nor do they apply these sorts of high standards to their clients’ operations. A low quality outsourcing provider leads to the following:

  • Inaccurate work
  • Non-compliance
  • Regulatory concerns
  • Communication issues
  • A lack of transparency

4. Threats to Your Company’s Confidentiality and/or Security

Poorly run, mismanaged outsourcing service providers can also pose a threat to the security and confidentiality of their clients’ personal or proprietary information. Outsourced accounting providers receive lots of confidential information pertaining to their clients’ employees and businesses. Whether an outsourcing provider has a poor vetting process for bringing in new hires or lacks information technology security, these oversights put their clients’ confidential information at risk.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


Top 3 Outsourcing Best Practices

If you conduct some research on professional outsourced bookkeeping companies, then you can avoid many of the problems faced when partnered with undesirable outsourcing providers.

1. Understand Your Scope of Services

Before signing the dotted line to a particular deal, understand every aspect of your contract. Understand which services they include, what might cost extra, and how flexible you are to downgrade, upgrade, or otherwise modify your level of service before your contract has ended. Be sure to ask questions so you completed understand the process, policies, and procedures involved.

2. Find Out about Industry Experience

Your back office has the power to drive your business to success or failure. As a result, it is extremely important to ask about industry experience when looking to outsource your company’s bookkeeping, accounting, controller and, maybe even, CFO functions. You should choose a company that understands the ins, outs, and intricacies of your business’s industry. You would be best partnered with an outsourcing company that has employees with plenty of experience working with other clients in your industry.

3. Ask about the Team and Technology

Consistency and efficiency of service are essential to choosing a strong outsourced accounting company. Before making your decision, find out how many people they have on their team. Then, find out how many members will be dedicated to your account. You should also ask about their policies, procedures and contingency plans for employee loss.

In addition, ask them what technologies they offer to improve efficiency, accuracy, and compliance in your financial department. Find out what type of technology support they provide. And learn how they will help you streamline your financial department’s software integration to best partner with them and grow your business.

When it comes to outsourced accounting services, your company should get everything it needs from the company you choose. Look for a company who provides the experienced team and robust technology your business needs for an efficient, smart, and strategic back office. It should not only accurately records your financial history, but it should also leverage the information to accelerate your company’s growth well into the future.

GrowthForce: Outsourced Accounting & Bookkeeping Services

“The GrowthForce methodology and management accounting practices, combined with the fact that you understood my needs for the business, established the P & L the way that I needed to have it set up to run the business, was very beneficial to me. We were profitable the first month, and I knew it because my accounts and books were clean and I could understand where the money was coming from and going to.”

~ President, JTAM Engineering

GrowthForce is one of the original U.S. based outsourced bookkeeping and accounting leaders in the industry! Tap into over 20 years of expert bookkeeping and accounting experience.

To learn more about how our reliable and professional teams can assist you with our online accounting services, get the Guide to Outsourcing Your Bookkeeping and Accounting. Avoid being burned by outsourcing accounting again!

Burned by Outsourcing Accounting


Stephen King is a guest blogger at The Strategic CFO. He is the President and CEO of GrowthForce – an outsourced bookkeeping firm based in Houston, TX.

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Role of a Company Back Office

When customers, clients and entrepreneurs visualize any business, they usually imagine the operation’s storefront, logo, products, services, or marketing campaigns. In other words, most people choose to define businesses by their brands, products, services, ideas, and messages. Behind the attractive exterior and desirable offerings, however, the heart of most successful businesses is a well-functioning back office that provides the platform for organizational growth. In essence, your company’s back office is the lifeblood of everything your business does and will do. This article will look at the role of a company back office and how to optimize it.

The efficiency and reliability of the back office ensures the health of your business… It allows you to continue to do what you do best – focus on your core competencies.

The Role of a Company Back Office: Foundation for Financial and Operational Success

Your small or medium sized company’s complete back office may consist of HR, Operations, IT, and Accounting and Compliance. The back office should stay abreast of ever-changing federal regulations, safety laws, and employment standards. In addition, it should also maintain up-to-date information systems and bookkeeping records.

The role of a company back office should help strengthen the infrastructure of your business by establishing and maintaining efficient business operations. In this article, we focus mainly on the accounting and compliance functions of your back office.

Layers That Build The Accounting Foundation Of Your Back Office

There are 4 layers that build the accounting foundation of your back office.

Accounting Systems Design and Optimization

A fully integrated accounting system maintains and manages all of your company’s bookkeeping, payroll, and accounting functions; thus streamlining financial operations and reporting.

Policies and Procedures

The design and implementation of your company’s policies and procedures covers everything from daily financial operations, weekly and monthly reporting, due diligence, and bookkeeping and accounting best practices.

Compliance

Compliance is the necessary and legally required responsibilities with respect to financial reporting and record keeping. Efficient bookkeeping and accounting practices involves maintaining accurate financial records essential to tax compliance and for avoiding audits, and enables you to keep track of your company’s financial (and overall) wellbeing.

Staffing and the Cycle of Hiring

Management Reporting will help determine a budget for the number of employees needed for profitable operation. The back office must also be able to synchronize the timing of onboarding and training new employees with the demand created by your growing business.

Transform Your Back Office from Mundane to Miraculous

Establishing a smart back office helps create operation efficiency and build a strong financial foundation for your business. With a streamlined, integrated system, and accurate data, you can leverage a wealth of financial information to optimize every business decision you make. Management accounting and cash flow forecasting can be tailored to accommodate successful strategic planning.


Click here to download: The Smart Back Office for SMBs


System Optimization: Recognizing the Difference Between a Successful or Struggling Back Office

A neglected back office is one that seems to work against you rather than for you. In other words, if you still see your back office as a mundane chore that primarily exists to take up your valuable time, then you are overlooking one of your company’s greatest assets.

For example, business owners often neglect their back offices. They do not take advantage of the financial information at their fingertips. As a result, they find themselves in cash flow crunches. These business owners often become too caught up in doing what they do best… They are focusing on product development, sales, and networking. Without a full accounting department in place, they may not getting the kinds of cash management tools they need to forecast their weekly and monthly needs. As a result, these business owners tend to find themselves reacting to negative cash crunch situations. If they spent more time on the back office, then they could be proactively avoiding cash shortfalls.

What sets a successful back office accounting solution apart from a struggling one is its ability to help business owners foresee cash flow issues and take proactive steps to avoid these sorts of challenges before they occur. In addition to cash flow forecasting, an experienced accounting team will also help you with the following:

  • Pinpoint and correct costly inefficiencies in your business
  • Predict your cycle of hiring
  • Establish policies and procedures that work for your business’s bottom line rather than against it

Next Steps For Improving the Company Back Office

So, what are the next steps for improving the company back office? Outsource back office functions. Then optimize your small business accounting system. Finally, eliminate the burden. The right online accounting and bookkeeping services provider can help you create a smart back office and strong financial foundation to drive growth and success in your company. An outsourced accounting department as part of your back office frees up your time by tackling day to day bookkeeping and accounting tasks. In  addition, an outsourced accounting department could be providing the financial information you need to make data-driven, strategically smart decisions for your company’s future.

With the right mix of team and technology, you can build your company on top of a strong financial foundation.

To learn how your business could benefit from shoring up your financial foundation with outsourced bookkeeping services, download The Smart Back Office below.

With 20+ years of experience providing professional bookkeeping services to businesses like yours, our back office experts can help you eliminate the learning curve by setting up your back office right the first time. We will help you optimize your small business back office efficiency to improve operations, streamline technology, and leverage financial information to accelerate your company’s growth.

Role of a Company Back Office


Stephen King is a guest blogger at The Strategic CFO. He is the President and CEO of GrowthForce, The Strategic CFO’s strategic partner. King has 3 decades of experience in accounting system design, technology development, and management services.

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4 Problems with In-House Accounting

When running a business, the goal is to have good operations and profits. You’re also in a constant state of awareness for ways to protect your business from harm – whether that comes in the form of increased competition, property loss due to theft, or some other factor. Have you considered staffing and managing an in-house accounting department? This is a very important and foundational part of any business, so it’s key that you address accounting. Now, your bookkeeping may be managing its bookkeeping and accounting in-house; however, that may not be the smartest choice. There are 4 problems with in-house accounting that we are going to take a look at in this blog.

4 Problems with In-House Accounting

Whatever your reason for wanting to keep your accounting in-house – control – it’s important to know how those problems with in-house accounting may impact your business.

1. Costly Bookkeeping Mistakes

If you employ a bookkeeper to handle your day-to-day financials, then you’re relying on one single person for this critical function. Since human beings are fallible, it’s not unusual for people to make mistakes. This is especially true when said person is inexperienced and/or tired.

In the best-case scenario, your bookkeeper or accountant will catch any mistakes made themselves before you catch it. Then, they will correct them in a timely manner.

In the worst-case scenario, however, a mistake will go unnoticed. That means it could be used to generate reports or even prepare audit and tax readiness inaccurately — and that’s the last place you want errors. In other words, one single mistake can have far-reaching consequences for your company, both financially and fiscally.

On the other hand, if you outsource your accounting to a reputable firm, then you’re guaranteed that the expert services you receive are accurate. With an entire team looking at your books and handling your reporting, any errors are more likely to quickly be noticed. And the team can address those issues immediately.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


2. Outdated In-House Financial Training

When you hired your accountant, you probably took great care to verify that their certifications were valid and up-to-date. Yet over time, even the best training becomes outdated. Just look at the new revenue recognition updates!

Accounting professionals need to stay current not only about things like new software and integrated apps for greater efficiency, but more importantly about things like amended regulations, changes to tax rules, and other important developments that affect their field.

Unfortunately, especially when your bookkeeper or accountant has a heavy workload, it can be challenging for him or her to stay current with these things. Furthermore, it’s going to be difficult for them to complete any professional development courses. That means that before too long, the quality of your in-house bookkeeping and accounting will suffer.

When you outsource your accounting, the right firm will ensure that its people are up-to-date on all of the latest technology, regulations, tax codes, and other developments. That means you never have to worry about the quality of your accounting.

3. Potential Internal Fraud

On average, organizations lose 5% of revenue to fraud annually. In addition, small businesses are typically more susceptible to fraud. Why? Because they don’t have the resources to perform all of the checks and balances needed to detect and combat fraud. Payroll fraud and skimming are common types of fraud that occur.

In a larger company, you can set up a system of internal controls to ensure that the various financial responsibilities and authorizations are handled by different people. In a small company, this often comes down to one or two people.

No matter how much you trust your bookkeeper or accountant, he or she can miss all the signs of fraud. What’s worse is that they could even be the person committing fraud. And when you know that the average fraud incident for small businesses amounts to $150,000 median loss, then you have to ask yourself, “Can my company afford this kind of risk?”

An outsourced accounting firm provides protection against fraud by ensuring multiple people review your accounts providing separation of duties and follow up on every potential sign of wrongdoing.

The best firms have procedures in place that virtually eliminate the chances of fraud going undetected. If they do detect fraud, then they can follow the trail back to determine which of your employees is the fraudster. Then you can take appropriate action.

4. Higher Costs for In-House Accounting Staff

Hiring a full-time bookkeeper or accountant involves significant costs. First of all, there’s the time and money that goes into recruiting, screening, and onboarding the new employee. If you work with a recruiter to do this quickly, then you’re looking at a bill of between 20-30% of the new employee’s salary. Then, there are the costs of employee salary or wages.

According to GlassDoor, U.S. salaries average $43,874 for a bookkeeper, $55,093 for a staff accountant, and $100,705 for a controller annually. Of course, there are also additional costs such as benefits, paid time off, retirement, overhead, etc. And last but not least, you have a contractual and financial commitment to the employee. You can’t simply let them go without a certain financial obligation.

In contrast, an accountant’s firm will cost between $24k-$60k annually. That range depends on the size of your company and the type of services you require. On average, you can expect to pay around $2,500 per month when you outsource your business’s bookkeeping and accounting. That’s considerably less than hiring a full-time bookkeeper!

If you want to learn more about how outsourcing your accounting can help your business, then contact us at GrowthForce. We’re always happy to learn about your business needs and discuss how we can help you achieve your financial goals. In the meantime, download our free Guide to Outsourcing Your Bookkeeping & Accounting to avoid those problems with in-house accounting.

Problems with In-House Accounting


Stephen King is a guest blogger at The Strategic CFO. He is the President and CEO of Growthforce, an outsourced bookkeeping firm.

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