Concerns about inflation, rising interest rates and the U.S. economy in general have created much uncertainty for specific business segments in 2023. The latest AICPA & CIMA Economic Outlook Survey found that just 14% of business executives are optimistic about the domestic economy’s prospects over the next 12 months (down from 23% last quarter).
“There’s a lot of noise in the system right now – inflation, higher borrowing costs, recession worries and concern about a potential U.S. default,” Tom Hood, the AICPA & CIMA’s executive vice president for business engagement and growth, told CPA Practice Advisor. “Hiring demand is still strong but we’re starting to see companies holding back on filling positions, essentially taking a wait-and-see attitude until economic conditions become clearer.”
While inflation remained the top concern for the executives who were surveyed, those leaders are also more pessimistic about their organizations’ prospects over the next 12 months (35% vs. 47% last quarter), CPA Practice Advisor reports, “but they still see brighter prospects for their organizations than the economy as a whole.”
5 Reasons to Outsource Accounting Now
In these uncertain times, smart companies are protecting their bottom lines, improving their competitive positions, preserving cash flow and managing their finances responsibly. In lieu of hiring employees and building out their internal teams to manage these processes, some organizations are outsourcing the responsibilities to business process outsourcing (BPO) partners like ScaleNorth.
Here are five great reasons companies are making this move and the benefits that they’re getting in return:
1. Flexible costs
Because outsourcing providers like ScaleNorth have the resources to handle fluctuating demand—something that’s difficult for in-house teams to attain—outsourced accounting can help organizations quickly scale up or down as needed. When you’re not committed to the fixed costs, or struggling to find qualified candidates in a tight job market, you can spend that money and time on more important, strategic projects.
2. Right-size your team to meet your needs
Layoffs began making news headlines in 2023 as companies in some industries took steps to right-size their payrolls. This is a difficult move for accounting departments to make, and replacing those individuals when business picks back up isn’t easy. Accounting and financial professionals require education, experience and certifications that don’t just emerge overnight. Using ScaleNorth’s BPO services, companies can right-size and then rebuild their teams quickly and without the stress of recruiting, interviewing, hiring and onboarding.
3. React quickly in a dynamic business environment
Outsourced accounting helps companies react quickly in a changing business environment. When they have the resources, expertise and scalability they need to adapt to changing market conditions, organizations can make the quick pivots needed to stay competitive and viable. For example, when the U.S. economy hit a rough spot in 2008, outsourcing providers helped companies reduce their costs and risk by managing their non-core functions and allowing them to focus on more important projects.
4. Fill positions a la carte
Hiring full-time accounting professionals usually means committing to a 40-hour workweek paid for in salary and benefits. But what if you don’t need the full 40 hours? Or, what if you’d rather have a CPA or Controller on staff on a fractional or as-needed basis? These are questions that can be easily addressed through outsourced accounting, whereby positions are filled a la carte—much like you’d order separate food items from a restaurant menu. For example, you may want access to a team of general accountants to do accounts payable/accounts receivable work 20 hours a week, and then augment that with 20 hours per month of Controller-level work. This will give you the flexibility and efficiency you need while still being able to leverage the skillsets and expertise of an experienced staff.
5. Get faster insights and improved decision-making
In this uncertain business environment, organizations across all industry sectors need faster insights for better decision-making. To stay ahead of the competition and maintain market share, these companies have to make decisions quickly based on the latest information. If your forecasts are outdated as soon as they’re put together, they won’t be of any use. The faster your accounting team can close the books at the end of the period, the faster the financial information can be shared with leaders, executives and other shareholders. ScaleNorth has the talent that you need to be able to build out models, create reports and develop forecasts that ensure your company is never caught off guard by unexpected economic pivots and shifts.
We’re in Your Corner
We’re all in the same boat right now as inflation, interest rates, rising business costs and overall economic uncertainty impact most corners of the business world. In these periods of struggle and uncertainty, the companies that have accurate reports and forecasts can often “reclaim” some market share left behind by competitors who might not be adjusting as well. With ScaleNorth’s outsourced accounting services in your corner, you’ll be able to act swiftly when opportunity comes knocking.