Tag Archives | outsourcing

When to Outsource or Why Outsource at All?

As a financial leader of your organization, it’s important that you understand how your time works and what you are spending your time on. In today’s blog, we’re taking a look at when to outsource accounting or specific tasks and services and why outsource at all. Before we go into when, first, let’s understand, what is outsourcing? Many of you have heard the term, but don’t really know what it means.

Outsourcing is simply delegating and paying someone outside of your organization to do a service for you that you cannot do or do not have time to do.

Examining Your Daily Routines

For example, think about your daily routines. Think about what you currently do. The list may add up quickly if you’re like me and wear many hats.

Put a star next to the things that you struggle to find time to do in the first place.

In your personal lives, it could be mowing the lawn or changing your car’s oil or cooking yourself.

For example, I find myself as a business owner operating a franchise struggling to find time to really prep and cook dinner each night. So what we do often is go out and pick up food – essentially paying someone to cook our food for us. We could either dine there or take it home.

Time Value

It’s all about time value. Are you spending your time on what you or your company values most?

When examining your daily routines, do you catch yourself saying “I don’t have time…”?

“I don’t have time to mow the lawn.”

“There’s no time to clean my house.”

“I don’t have time to close the books because I’m out there running my business.”

Whatever those time consuming tasks are, it may be worth outsourcing to another person or agency. 

By freeing up your time as a CFO, you can reallocate that time to more important tasks – such as being your CEO’s trusted advisor. Learn how to become the trusted advisor your CEO needs.

When to Outsource Accounting

For example, you might have to hire a bookkeeper in your organization for them to come out and enter the transactions on a daily basis. For me, that’s important to outsource because I need to be thinking at a higher level as a Controller/CFO – not entering transactions. There will always be someone less expensive to do that. 

So really when we say we don’t have time, it is because of one of several reasons. We don’t want to spend our time on something else if someone else can do it for cheaper (and if it energizes them more). Plus, it may be time to start outsourcing accounting when you want to:

  • Make more money for you
  • Bring you more value
  • Do what you enjoy doing more

For example, entering transactions for month close is dry work and it wears on me. But I love coaching leaders how to be more effective in their roles and make their decisions more impactful. If I’m bombarded with transactions, I cannot coach leaders – which is more valuable to me and the bottom line.

On a personal note, when I do not have to cook dinner, I have an opportunity to spend more time with my kids. It also frees up my time to help my kids with homework and build memories with them. I can also read a book for personal growth or enjoyment. There’s so many opportunities out there for you to actually do things that you actually enjoy. 

Outsourcing accounting is just one area where you may add value to your company. Continue to do things that add value or free up your time so that you may add value. Click here to download our guide on how to be a trusted advisor to your CEO to help them improve your company’s value.

When to Outsource, When to Outsource Accounting, Why Outsource

Why Outsource At All

One of the top reasons why companies outsource at all is that they may be more efficient. When I outsource, I am hiring someone that might be more knowledgeable. If I am a business owner who does not know how to record certain transactions, then consider the time it will take to learn that skill (and the time you are not spending on improving profits and cash flow). Even if you wanted to implement Quickbooks so that you can start recording transactions (a one-time set up), it may be worth handing that off to someone more knowledgeable in Quickbooks so that you can focus on other things you are more knowledgeable in. 

Those are things you consider when to start outsourcing.

The goal is to create more time, more energy, and free you up to do something that can potentially make you more money.

Examples When Considering Outsourcing

To further explain the need to outsource, it’s important to consider roles outside of the accounting and finance departments.

If you are a good sales person for your organization, then you don’t want to spend your time behind a desk all day trying to enter your transactions. If you don’t have a lot of transactions, then that’s a perfect sign that you need to get out there and start making those sales for increased transactions for your business to actually record.

Outsourcing is a Key to Growing

I think that outsourcing is a key to growing. It is no different from a leader wanting to delegate the tasks that…

  • You just don’t have any time to do
  • You need others to do so that you can focus on what you are great at doing from a very high level

Now, at The Strategic CFO, we have several ways for you to tap into or start outsourcing individuals so that you can actually build on your business.

Consulting

We have accounting managers, controllers, and CFOs that are ready to deploy and add real value where it’s not currently being optimized. In our consulting practice, we work in several capacities, whether it be an Interim CFO role, financial and operational reporting, mergers and acquisitions, pre-audit preparation, etc. Click here to learn more about our consulting practice.

For example, your accounting manager, controller, or CFO may

  • Not exist yet (brand new hire)
  • Be on maternity leave
  • Take 3 months off to travel through Europe (I wish!)
  • Need extra help because your company is going through an audit for the very first time

Life happens regardless of what you plan for. That’s why we’re here to step in when you need it. We will come in and help you with getting the helping hand you need to be more efficient with your current team. Need hiring and training? We do that too. These are all different reasons why you may need to outsource. We are here as a boutique firm to help you.

When to Outsource, When to Outsource Accounting, Why Outsource

Coaching Workshops

There are also opportunities for you to come in and take workshops at our office, in an online setting, or at your office. For example, you can learn about what your leadership style is. Are you a Type A person that can’t just let go of doing the little tasks? By learning about yourself, you start to outsource or delegate what you are not strong at and focus on what you are great at. As a result, you can continue to grow the business.

We offer a variety of workshops to…

Your CEO needs an advisor they can trust. Learn what they expect from their CFO and how to become the trusted advisor your CEO needs in this whitepaper.

When to Outsource, When to Outsource Accounting, Why Outsource

When to Outsource, When to Outsource Accounting, Why Outsource

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Transform Your Accounting Department By Outsourcing

Many businesses owners and CEOs come to us because they are experiencing frustration with their business’s bookkeeping and accounting. Whether they have severe inefficiencies in their systems and processes, have continuous cash flow issues, or that they’ve been a victim of fraud… Each one negatively impacts the success of their business. They find themselves being tethered to closely managing their bookkeeping and accounting back office. As a result, this prevents them from dedicating their time and energy to leading and growing their business. If this sounds like you, then it’s time to transform your accounting department by outsourcing your bookkeeping and accounting to an outsourced full-service accounting department.

Past Bookkeeping and Accounting Options

In the past, the only bookkeeping and accounting options for business owners were one of the following:

  • To handle the back office themselves or with a part-time in-house hire.
  • Ask their CPA that files their taxes to help with daily bookkeeping functions.
  • Try building an in-house accounting department, hiring one or more full-time employees to manage the back office

But thanks to recent technologies, like cloud-based software and platforms, small businesses now have a better option when it comes to managing the back office.

So, how does outsourced bookkeeping and accounting compare to having in-house staff? What are the challenges and benefits, and how do you choose the right partner?


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


Compare In-House vs Outsourced Bookkeeping and Accounting

Building an in-house accounting department brings many challenges. Likely, it will not yield the results expected or desired in order for the business to grow.

The costs of having in-house staff is a major concern, not just with salaries, but also the costs of overhead, IT, and employee turnover. Other hidden costs that inevitably begin to surface, such as:

  • Bookkeeping mistakes
  • Continued education
  • Unfortunate costs and risks of fraud

Businesses with internal back offices also do not typically have back up plans to cover/replace employees in the event of illness, vacation, or employee loss.

Outsourcing your back office with a fractional share of a full-service accounting department provides many of the same benefits and functions of having in-house staff. But it’s a fraction of the cost.

By outsourcing your bookkeeping and accounting functions, you will see a return on investment in the form of streamlined operations and risk mitigation. Relying on a purely compliance oriented back office will not help your business grow.

Outsourcing to the right partner will help your business gain a competitive edge with optimized systems, improvements in your cash flow, increased profits, and the ability to have management reporting delivering actionable financial intelligence for making data-driven business decisions.

How to Recognize When Your Business is Ready to Outsource

Outsourcing will bolster your business’s back office at an affordable price. Many business owners and CEOs do not know when the time is right. The following are common signs that it is time for you to consider outsourcing:

  • Vision and goals are delayed because you spend more time functioning as a bookkeeper than you do as CEO
  • Back office has no separation of duties, exposing your business to risk
  • No contingency plan for the loss of your in-house bookkeeper
  • Financial reports are geared toward compliance and tax compliance, but not managing your business
  • Base business decisions on gut feelings, rather than data
  • Business is growing
  • Cash flow concerns

Your business can begin outsourcing some or all of its back office functions at any time or size. A strong outsourced accounting partner will work with you to provide the services you need at the right time. In addition, it will set your back office processes up in the beginning to accommodate growth in the future.

Best Time to Outsource Your Back Office Function

You can transfer your bookkeeping and accounting functions from in-house to outsourced whenever you are ready.

Many businesses think that it would be better to begin outsourcing at quarter-end or after this year’s taxes have been filed. Waiting for these timelines, however, just delays receiving priceless data, saved money, and extra time that comes from having a smart back office that combines the tools, technology, and expertise necessary for a solid financial foundation.

Common Outsourcing Pitfalls to Avoid

If you decide outsourcing some or all of your back office functions is right for your business, then careful discern who you want to partner with.

Outsourcing your bookkeeping and accounting can do wonders for your business and its future. Choosing the wrong provider can be costly. Be on the look-out for the following when selecting services.

Hidden Costs

Be very clear about your expectations of service. Ask questions about what your scope of service includes up-front to avoid unexpected costs appearing on your invoice.

Availability

Consider how much involvement you want to have with your bookkeeping and accounting. Be sure you choose a provider and service level that will include enough availability to meet your needs. While some will only communicate on a weekly basis, on a different plan, other providers will be available whenever you call.

Small Firms

Although a small firm might be full of amazing individuals, they might not have a plan if someone quits or goes on vacation. Ask your potential Client Accounting Services (CAS) providers how many team members will be dedicated to your account and what will happen in the event someone leaves their firm.

Offshore Firms

These CAS providers often come at a much lower price, but they also have many drawbacks. They often operate in different time zones than your business, making their availability difficult. Communication, skill sets, expertise and processes can be a challenge when being serviced by firms in other countries.

Transform Your Accounting Department By Outsourcing

There are scalable solutions that grow with your business. With a highly personalized touch, GrowthForce dedicates an entire 3-person team to each of its clients. We offer a range of outsourced bookkeeping and accounting service options designed to grow with your business, as its back office needs expand and change with growth.

With the right outsourced bookkeeping and accounting partner, you can transform your standard back office (performing housekeeping duties) into a solid financial foundation for your business (providing actionable data and management accounting to grow your business).

If you would like to learn more about the process and reasons to outsource your back office’s bookkeeping and accounting functions, we encourage you to speak with a GrowthForce specialist today or take a look at our latest resource, The Guide to Outsourcing Your Bookkeeping and Accounting.

Transform Your Accounting Department By Outsourcing


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.


Transform Your Accounting Department By Outsourcing

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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.


Burned by Outsourcing Accounting

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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.


Problems with In-House Accounting

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Outsource Definition

See Also:
Administration Expenses

Outsource Definition

The outsource definition is the practice of transferring business activities to an external organization instead of performing the activities internally.

Outsourcing Criteria

Companies may outsource business activities if they feel an external organization can perform the activities better or at a lower cast than if the company were to perform the activities itself. Outsourcing typically involves a contract between the company and the external organization that stipulates the costs, quality standards, and other conditions regarding the performance of the business activity.


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


Insourcing

The decision to outsource instead of insource depends on the nature of the business. Typically, companies want to focus on their core business activities and outsource peripheral activities. Value chain analysis may help a company discover which activities to perform internally and which to consider outsourcing.

Activities that are commonly outsourced include bookkeeping, legal services, transportation, security, and other business activities. When deciding whether to outsource an activity or perform the activity internally, it is necessary to consider the advantages and disadvantages of outsourcing.

Outsourcing vs Insourcing

It may be advantageous to outsource an activity if doing so is cheaper than performing the activity internally. It may also be useful if the external organization has superior expertise in the activity. Outsourcing also allows a company to focus its attention on its core business activities.

There are also disadvantages to outsourcing. Outsourcing customer service operations may cause customers to feel disaffected when they find out they are not dealing with the company they are trying to reach. Also, if the external organization has access to sensitive information, then there may be a risk of information leaking to competitors or other parties. Outsourcing certain operational activities may cause the company to give up valuable customer data used for marketing purposes. And finally, outsourcing may require the company to incur the costs of monitoring and auditing the performance of the external organization.

Outsourcing Overseas

In today’s global economy, more and more companies are outsourcing business activities to external operations in other countries. Labor and operational costs may be significantly lower than in the company’s home country.

Guide to Outsourcing Your Business's Bookkeeping and Accounting


Before you decide to outsource, determine what your core competencies are. Check out our free Internal Analysis whitepaper to assist your leadership decisions and create the roadmap for your company’s success!

Outsource Definition
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Outsource Definition

Originally posted by Jim Wilkinson on July 24, 2013. 

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Outsourced Workers: Do You Need More Hats or More People?

Outsourcing is something that has always existed, but has seemed to become the “norm” for most companies. outsourced workersRightly so, outsourced workers are an easy solution for financial leaders to mitigate costs.

The big question we’re asking is: Do You Need More Hats or More People?

If you’re looking at outsourcing, the first step is to complete an internal analysis to study your strengths and weaknesses. Need guidance in conducting an internal analysis? Download the free Internal Analysis Worksheet now. 

This is our third and final blog of our “are you wearing too many hats?” blog series. Initially, we started with the concept of having “too many hats“… meaning you as a financial leader have been given additional roles that go outside of what you thought you signed up for.

In our last blog, we discussed how millennials transition our CFO roles from traditional “CFO hats” using more innovative tactics. We also analyzed how technology may be able to help you complete the unfinished tasks in your company.

CFOs are currently struggling because of their many hats. What do you do when the weight of responsibility is too much?

Our Answer is Delegation

I recently moderated a Q & A panel of three CFOs, and heard very different answers from all three when discussing how to handle their “too many hats.” An interesting response was delegation, and handling too many tasks. How do you delegate these tasks, and who do you delegate them to?

One solution is outsourcing.

How Technology Connects You to Outsourced Workers

As discussed in our last blog, technology impacts a company by relieving some of the responsibilities on individuals.  Routine tasks can often be performed by computers, freeing up workers to spend their time on more value-added tasks.

Due to cloud computing and improved applications, outsourcing your work is a lot easier and cheaper. 

How Much Does Outsourcing Save You?

I know what you’re thinking… “Why don’t we just polish what we’re lacking on and allocate our budget to that?”

Some projects are more costly than others. For perspective, let’s say you were starting a new company and needed to design the website. The costs of hiring programmers and engineers in house would be tens, maybe hundreds of thousands of dollars. Compare this to a few thousand you can pay to workers outside of your company.

When starting your own company, you should also consider outsourcing projects that you are unfamiliar with. Although it is important to learn all aspects of a company, you don’t need to do it all at once. Having outsourced workers saves you money and time and provides expertise that you may currently lack.

In my own company, we outsource a lot of projects nationally and internationally (particularly with the one-time deals). We even outsource the projects to other companies, not just freelanced workers. Because our current staff is not as familiar with graphic design, we hire freelancers to do our designs and white-papers. We come up with the content, however, which reflects how employees provide the value-added information in a company.

What Should You Outsource?

We want to make sure that the tasks we delegate are the tasks that don’t necessarily make us money. What does that mean? Here are a few that we recommend you consider outsourcing:

A better question would be, what can you not outsource?


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


The Risks of Outsourcing

Although outsourcing is a great solution to get rid of some of your hats, you may want to be wary of what you assign…

Value-Added versus Non-Value-Added Tasks

Often, we have to decide which tasks are more important than others. Even within the office, you have to choose which tasks to hand off to other trusted employees, and which tasks you need to complete yourself.

Typically, you would choose the value-added tasks because you, as a financial leader, are meant to add value to the company. You don’t want to assign important tasks to freelancers or offshore outsourced employees, because (presumably) no one does it as well as you do. Which brings me to my next point…

Do you find yourself gradually outsourcing more tasks for your company, rather than handling them yourself? Download this free Internal Analysis white-paper to find out why.

Laziness to Learn

So you’ve got a good set of employees, as well as outsourced workers. The budget is comfortable and your company is running smoothly. No one wants to change a system if it’s working fine, right?

Wrong.

As a CFO or financial leader, you are meant to be the wingman to the CEO of your company. The company should always seek to grow and adapt to new systems and technologies the business world has to offer. Remember that outsourcing is only meant to take some weight off of your head, not take all of your hats away completely!

The point of outsourcing is to take hats off. If you find that you are outsourcing any of your core competencies, it’s time to conduct an internal analysis.

Cyber-Security Issues

Keep in mind, whoever you outsource your tasks to will need access to some of your company’s information such as passwords, financial account information, etc. There are often cyber-security issues that occur, putting hundreds or thousands of people’s information at risk.

When deciding what information to release to your outsourced parties, the first priority you should protect is the financial information – your company’s and your customer’s information. If you can, avoid giving third party companies access to any financial information. Most platforms allow you to create “moderator,” “contributor,” “editor,” or any other variation that is other than “administrator.”

Government Regulation

Outsourcing government-regulated tasks can be a little tricky, particularly with countries that do not have the same regulations. This issue is industry-specific. Some examples would be insurance, medical, and financial services.

Cultural Barriers

When you outsource to workers who have a language barrier, time difference, or just a generally different way of handling projects, it may be a bit more difficult to execute a task. Companies have to be cautious for the sake of time, because one cannot hand a project to an outsourced worker who needs training constantly.

This is where adaptation comes in… In our company, we freelance our graphics to outsourced workers in the Philippines. We have to prepare our instructions and content a week, sometimes two, in advance. Why? Because of the time difference and the resources available to our contracted worker. We want to make sure his needs are accommodated as well as our own, and we adapted to his way of doing business.

Conclusion of Having “Too Many Hats”

There are always risks in trying new things in your company – in adapting to new business systems and technologies. In this three-part series of “wearing too many hats as a CFO“, we explored solutions such as millennial tactics, technology, and outsourcing.

The drive of a millennial + experience of older generations = success in your company.

Adaptability is key – Technology is created to help you.

Outsourcing can lessen the number of “hats” you wear as a CFO.

Regardless of the functions that you decide to outsource, conducting an internal analysis will help confirm your core competencies and identify areas that could easily be outsourced. Download your free Internal Analysis worksheet to start developing and enhancing your strengths as well as start reducing and resolving your weaknesses.

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