The office of the CFO is a busy place in any business conditions. In their challenging, demanding and critical roles, CFOs oversee their companies’ financial operations, managing budgeting, reporting, forecasting, accounting and other responsibilities. Chief financial officers also ensure that their companies comply with applicable financial rules and regulations.
This long list of duties can create high levels of stress and force CFOs to work long hours as they work their way through complex financial situations, regulations and other requirements. In a dream world, these professionals could offload at least some of their day-to-day accounting projects to a reliable, outsourced partner. This frees the CFO up to focus on more important, strategic tasks.
The practice of hiring a third-party accounting firm to handle bookkeeping, accounts payable, payroll, taxes and other activities helps CFOs:
1. Get the support they need on a piecemeal basis.
If you want to bring in controller-level talent, you’ll likely have to pay them for a 40-hour workweek, plus benefits. And if you’re hiring a full-time controller, they’ll likely command a six-figure salary. When you work with an outsourced accounting firm, on the other hand, you won’t take on the risk of hiring a full-time professional; you can pick and choose what type of talent you need and only pay for the hours that you use. This gives CFOs the best of both worlds: they get the high-level talent they need without breaking the bank.
2. Reduce operational and financial risk.
Because outsourced accounting firms use strict internal procedures and controls with all of their clients, CFOs benefit from the related economies of scale. For example, the provider likely has experienced accountants trained to follow those guidelines, effectively reducing human error, mistakes on financial reports and other issues. Also, your outsourced accounting partner will have internal controls in place to protect data and stay up-to-date on the latest accounting best practices, rules and regulations.
3. Scale up or down quickly.
Companies are laying off workers in today’s uncertain business environment, while others need help finding suitable candidates in a persistently-tight job market. When CFOs outsource accounting responsibilities to a reliable third party, they can scale up or down quickly regardless of what’s happening in the job market. This is especially important for a department that needs highly-skilled and highly-educated team members. If a company is doing its own hiring, on the other hand, it often means at least one month of job postings, resume reviews and interviewing before a single new hire can even be onboarded. At ScaleNorth, we’re able to provide the fractional staff needed much faster than the typical onboarding of full-time staff, helping our clients adjust at a moment’s notice.
4. Add new expertise to their tech stacks.
With technology in their corners, CFOs have been able to automate many of the tasks they used to do manually, including data entry, budgeting, forecasting and basic communications. This frees up the CFO’s time, improves accuracy and saves money. With ScaleNorth’s business process outsourcing (BPO) services, CFOs get tech-savvy team members who are well-versed in the NetSuite Enterprise Resource Planning (ERP) platform—something that’s not always easy to come by in the current job market. The company that just switched from QuickBooks to NetSuite, and whose current accountant has never used the ERP before, can be up and running quickly with ScaleNorth. Being able to onboard specialists who live and breathe technology goes a long way, as does having an experienced talent pool right at your fingertips.
Tips for Success
Before outsourcing day-to-day accounting projects to a third party, do the legwork and find a partner with a proven track record of success and a good reputation in the industry. Set clear expectations right from the start, including the level of service that you expect, communication channels that will be used and turnaround times for deliverables. Monitor performance over time and adjust as needed, just as you would for any critical internal or external business function.