I recently stumbled upon the oddest form of outsourcing: Hiring pretend paparazzi. A company provides fake paparazzi to mob a celebrity and yell questions, creating the illusion of importance.
My outsourcing approach veers more toward expertise than ego boost. If I’m leaning on an external resource for help, it’s because that resource has knowledge that I do not. I can grocery shop. However, can I repair the brakes on my car or plan a wedding? Not so much. When businesses outsource, they follow a similar approach. They don’t outsource marketing just to send an occasional email blast. It’s about the significant results — more leads, a higher profile and growth.
The same is valid for outsourcing accounting. When a company entrusts all its accounting to your firm, it expects the accountant to contribute to broader goals and results. It isn’t about taking over payroll; it’s about improving the business.
CAS and the client
There are multiple terms practitioners use for outsourced accounting: client accounting services (CAS), business process outsourcing (BPO) or client accounting advisory services (CAAS). No matter what you call it, it refers to a firm handling all finance and accounting services, as well as back-office support. This includes financial statement preparation, general ledger management, cash flow management, payroll preparation and reporting, accounts payable (AP), accounts receivable (AR), transaction processing, virtual CFO services and controllership.
What benefits do companies that outsource accounting expect? Moreover, how do accountants benefit themselves? The
1. CAS saves clients time
One thing business owners want but never get enough of is time. There are never enough hours on the clock to lead, run, market, staff and grow a company.
However, what if you, as an accountant, could give them this elusive gift? With CAS, you can.
Nearly 80 percent of the respondents polled said that CAS gave them more time to focus on their business. When accountants take over finance and accounting services, as well as back-office support, companies are immediately relieved of time-consuming and often frustrating tasks.
2. Businesses that benefit from CAS say advice from their firms makes accounting easier
What’s the point of outsourcing anything if it doesn’t make things simpler? When an expert is involved, it makes pinpointing bottlenecks and obstacles that much easier. CAS accountants transform responsibilities that were complicated and frustrating into streamlined wonders.
Things get better.
Survey respondents echoed this sentiment, with 68 percent of CAS clients saying that advice from their firms on best practices and processes has made accounting easier and more efficient.
Technology plays a significant role in this part of CAS. The cloud provides automation, mobility and real-time data. It alleviates the paper burden and paper shuffle. In fact, nearly 30 percent of survey respondents said that they have greater financial insight thanks to technology recommendations from their accountants. Of those who do not welcome technology recommendations from their accountants, only 8 percent could say the same.
3. CAS clients report positive hard-dollar results, thanks to help from their accountants
Beyond qualitative results, CAS offers firms the pathway to increased profits. Companies that outsource accounting more often report that advice from their accountants helped them increase profits — 28 percent for those that outsource compared to 16 percent for those that do not outsource.
Why is this?
The advisory component of CAS builds trust between a firm and its client. CAS allows an accountant to fully understand the business and its challenges, performance and goals. Then the accountant can apply the information and expertise needed to guide a client to impactful results.
The big CAS payoff
Businesses benefiting from CAS gain more time, reduce frustration and more often report more profit than those that do not try CAS. As a result, they indicate a higher level of esteem for their accounting firms.
Seventy-nine percent of CAS clients said they “definitely” or “very likely” would refer their accounting firms.
In other words: Of companies which outsource accounting, nearly 80 percent — four out of five — would recommend their accountants to their clients. For companies that don’t outsource accounting, only 65 percent said that same.
As one CAS client wrote: “I have recommended my accountant to at least 20 people, most of whom became clients.”
Launching CAS is, undoubtedly, an undertaking that requires time, training, communications, staffing and technology. But once you invest, the data points to positive CAS perceptions and attributes that can grow your firm and acquire new clients.
Not sure where to start? Here’s a parting gift from the survey: More than half of the companies outsourcing AP and AR are interested in outsourcing all accounting.
If you’d like to read more results from the 2018 Client Accounting Services survey, you can download the special report
