Tough Times, Tough Decisions
Companies are downsizing, positions are being consolidated, but what does a company do with their accounting department? Accounting positions are an integral part of every organization. If a company downsizes and is still in business, they will continue to need accountants. So what is a business owner or non-profit organization to do? One common solution is to outsource.
Skeptics of outsourcing say “Well I don’t get to have full-time access to my in-house accountant”. While that is true, what most business owners don’t realize is that with the right process in place and a joint commitment, outsourcing can be a winning proposition. Most clients who outsource see on average a 40 to 60% reduction in their labor costs and more importantly see an improvement in their accounting reporting. This process also isolates the company from employee turnover, personnel issues, breaches in confidential matters and potentially theft.
Here is an example of how outsourcing can benefit a company: A company has a 15-year accountant on staff. They do filing, pay bills, call in payroll hours, check their Facebook account, take calls from their family, reconcile bank statements, take vendor calls and produce the monthly financial statements for the organization. With proper outsourcing, a team comes in and restructures the accounting department, sets up standard work papers, establishes a standard month end process and maintains the books going forward. Also as part of the process, the CPA evaluates tasks that are non-accounting in nature, such as filing and vendor phone calls, evaluates low level accounting tasks such as paying bills, and asks that the company to continue to do those tasks internally. At the end, what the CPA and company have done is stripped off the low level tasks that can be done internally and outsourced the tasks that are higher level in nature. Most outsourcing companies don’t offer or suggest that the tasks be shared between both organizations. This step is very important to the success of outsourcing.
The outsourcing process has worked for many local businesses and clients of Cover & Rossiter. If you are interested in learning more about the process and how it can save your company or non-profit money and possibly headaches, please contact Loretta Manning at 302-691-2219.