Working Smarter with Outsourced Accounting

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1 Working Smarter with Outsourced Accounting Leveraging economies of scale to offer lower cost and higher quality of service

2 Working Smarter with Outsourced Accounting Outsourcing your back-office accounting processes to free up your time Outsourced Accounting is a very broad topic, and there are many different outsourcing options and services to choose from. Companies need a clear picture of outsourcing and what benefits it provides. They want advice on whether outsourcing is right for them. This white paper will answer those questions. Start with the Vision The core of your business is your vision. You must focus on where you re going and the ongoing needs of your customers in a continually evolving marketplace. You must also keep your attention on your unique value proposition and your ability to deliver. Your core business is made up of two key areas, the front-office and the back-office. The front-office is the fuel that propels the vision and is comprised of marketing, sales, business development and customer service. These are the business drivers that move your vision forward. The back-office, including HR, payroll, benefits, accounting, finance, IT and tax make up the foundation that supports your vision. These supporting business functions stabilize the vision and create a platform for growth. Core Business vs. Back-Office The front-office is the core business. It s a profit center requiring core competencies that are usually natural to the team. The more time the management team can use to focus on the core business, the better off the business is. The back-office supports the vision. It s a cost center, typically needing expertise totally unrelated to your core business. The back-office can inhibit or enable grown and is the primary place to look for business process improvements and cost reduction. Outsourcing back-office processes can reduce costs while significantly increasing quality and efficiency. Business owners acting as Controllers, CFO s acting as bookkeepers, Accountants acting as HR managers, all create inefficiencies and risks. When business owners wear multiple hats and handle lower level tasks, they can t focus on growing their business. Often the answer is hiring people over qualified to handle basic needs which increases the cost of doing business. Worse yet is asking under qualified staff to take on tasks which they are not trained to handle which increases the time to accomplish tasks and provides delayed, inadequate or inaccurate results. 1

3 Developing Business vs. Managing Processes Many companies do not need a full-time Chief Financial Officer (CFO) or Controller. What companies often do is place the CFO/ Controller responsibilities with the CEO/ owner or with the most senior finance/ accounting executive on staff. The problem with this approach is that the person placed in charge may not have the right skill set or experience to fulfill the role of CFO. Outsourcing the accounting functions bridges the gap from the back-office to the front-office without having to hire over qualified or under qualified people. Outsourcing back-office processes can reduce your costs, while significantly increasing quality and efficiency. Reducing Costs through Business Process Optimization (BPO) The financial accounting outsourcing value proposition shifts with BPO. With a thorough assessment and analysis of your back-office operations and the reengineering of how processes are transacted, costs will be reduced. Additionally, service levels of your accounting functions will be increased by improving the quality of the people handling each part of the back-office. Outsourced accounting will: Significantly reduce overhead - The finance and accounting back-office is a cost center and does not generate income. Optimize processes and improve workflow. Allow management to focus on the critical core business. Improve back-office operational efficiencies that impact the front office. Re-direct Finance and Accounting expenses to finance corporate growth strategies. When is Outsourced Accounting a Smart Business Strategy? As companies continue to operate on leaner budgets, some have found that outsourcing certain functions is a good way to keep quality up and costs down. Outsourcing is not a new concept. For many years, businesses have transferred projects such as accounting, finance and bookkeeping to third-party firms. A recent trend has seen more companies outsourcing their accounting processes. What used to be viewed as a strictly internal management function is now routinely outsourced. Outsourcing is much more than a preference for having someone else perform your detailed, routine tasks. It s much more than saving money and cutting operating costs. It s a strategic business tool that can generate broad business 2

4 benefits. According to analysts, nearly $4 billion will be spent on finance and accounting outsourcing this year as services spending reverts to pre-recession levels. So, when should a company outsource accounting? When accounting needs to be done better by qualified personnel, faster, and cheaper than the in-house staff resources can do it. To simply state it, accounting transactions have to be done correctly, quickly and within certain time constraints, all the time. Having an outsourced team dedicated solely to your accounting functions, rather than in-house staff that may have several duties competing for priority, increases the likelihood that your accounting will be done undistracted, and by people who are qualified to complete the transaction efficiently. Resources and Skills Properly Leveraged to Economies of Scale Many small businesses don t have access to a CFO and the requirements for someone with that level of talent might only demand 5-10 hours per month. Small businesses also don t need a full time Controller but could benefit from the expertise of a Controller at times throughout the year. Most companies end up spreading these functions throughout the organization to either under or over qualified personnel. The typical small business back-office no longer leverages the economies of scale. In order to justify having a full time Controller and CFO the company must be much larger. By outsourcing these functions companies are able to tap into all of the CFO and Controller skill sets, tailor fit to the amount they need them. The outsourced accounting firm can scale these functions across their business, passing on the value to their clients. 3

5 About SystemLink s TotalAccounting Service SystemLink s TotalAccounting Service provides back-office accounting resources with proper qualifications and skills to reduce your cost and free up your time. TotalAccounting means that the details of your company will be overseen by a qualified CFO level professional. Your accounting professional will meet with you at appropriate times to review financial statements, attend board meetings, and talk to you about strategic issues and budgeting. Additionally, experienced corporate Controllers will oversee all of the details of the monthly close and transactional processing and a team of transaction processors will process all of the day-to-day accounting. Back-office accounting resources equipped with the proper skills makes SystemLink s TotalAccounting the RIGHT choice by providing businesses with the ability to focus on what makes their organization unique and valuable to clients by reducing the cost and effort to maintain their necessary back-office processing. SystemLink is able to provide the right resources to do the right job at the right time, at a scalable cost based on your ever changing requirements. SystemLink s TotalAccounting service offers lower cost bundled with higher quality of service leveraging economies of scale. 4

6 Baltimore, Maryland Office 1122 Kenilworth Drive Suite 211 Baltimore, Maryland Telephone: (410) Philadelphia, Pennsylvania Office 630 Freedom Business Centre King of Prussia, Pennsylvania Telephone: (610) Washington, D.C. Office 447 Carlisle Drive Suite A Herndon, Virginia Telephone: (703) info@systemlinkonline.com