Finance and accounting is the most essential and sensitive internal function at any company. Every other team’s operations run through it and rely on it. Investors, consumers, and government regulators depend on the accuracy and quality of the work done by accounting and finance teams. So why would today’s CFOs be so willing rely on outsourced accounting and entrust these critical business functions to a partner?
According to our recent survey of investor-backed CFOs, roughly 80% are already working with an F&A partner. Those CFOs report the top benefits of outsourcing accounting include better financial reporting accuracy and consistency, time savings from not needing to manage the finance department, ease of finding the right financial expertise, cost savings, and improved ability to gauge performance against competitors and industry benchmarks.
If you’re unsure if outsourcing the finance and accounting function is right for your business, we’ll explore all these benefits and more in detail below.
1. Better financial reporting
Many growing businesses struggle to consistently produce timely, accurate, and actionable financial data that can impact decision-making, financial management, and relationships with investors.
With respect to timeliness, Consero’s annual CFO survey found that roughly half of companies without an F&A partner take at least 21 days to complete financial close.
These reporting challenges are usually caused by some combination of not having enough accounting talent, inadequate processes, or teams operating on disparate and outdated accounting software.
The best outsourced accounting partners come equipped with talent and software solutions and to more reliably produce board-level reporting. For example, Consero’s Finance as a Service (FaaS) model includes a full team working from our cloud-based SIMPL dashboard, which provides an easy way to look at your complete financial position and generate custom financial reports.
By receiving financial information in easy-to-read formats from your outsourcing partners, you can expect to spend significantly less time reviewing financial information. In fact, 35% of CFOs with a partner take 21 days or more to complete financial close, with many taking as little as 10 days.
With a full third-party reviewing the integrity of the financial information, you can also rest assured that the information’s accuracy will be impeccable.
2. Access to the best financial expertise
The war for accounting talent shows no signs of slowing down. In the US, 81% of CFOs reported having trouble finding accounting expertise last year, while 49% struggle to recruit Financial Planning and Analysis (FP&A) staff.
It can take months to recruit and hire even a single talented and experienced full-time accountant, controller or fractional CFO. Even once they are found, the high cost of retaining them rarely matches up with the value they bring to the table.
Access to top-tier accounting and finance expertise is among the most frequently cited reasons for signing onto an outsourced accounting solution as a sure way to alleviate staffing challenges. In fact, CFOs working with finance partners are about half as likely to experience hiring challenges compared to those without a partner.
Outsourced accounting firms can be brought onboard quickly to fulfill any number of requirements, including bookkeeping and back-office support, controller services, FP&A, or general ledger clean-up.
With no training required, the third party can immediately begin implementing more efficient controls and processes. At the same time, business leaders benefit from greater cost controls with a contract-based outsourcing arrangement.
3. Rapid time-to-market deployment
Investor-backed companies and their sponsors want to grow the business as quickly as possible, but the finance and accounting department can hinder growth if it doesn’t have the right processes or systems to scale with the business
When there is a problem in this department, many organizations try to upgrade their existing systems – which typically takes between 18-24 months to select, configure, implement, and train in-house staff to use.
Outsourcing can rapidly accelerate the timeline for upgrading accounting software systems. Under Consero’s FaaS model, you can optimize your finance function in as little as 30 days with the finance processes and systems fully implemented.
4. Cost savings and efficiencies
Between keeping pace with rising accounting salaries and software costs, building and maintaining an in-house accounting function can be a burden for growing companies. Outsourced accounting services cost roughly 20-50% less than building in-house depending on your needs.
For example, instead of hiring a single full-time controller, Consero’s model includes a full accounting from the VP of Finance-level down, with the benefit of a more predictable cost structure as you scale.
On the technology side, one of the biggest advantages of outsourced accounting is the access to advanced tech solutions you would otherwise have to acquire exclusively for your company.
Whereas 88% of CFOs struggle to derive value from their in-house technology investments, providers like Consero can have your financials consolidated and running through a proven AI-enabled, cloud-based solution like SIMPL.
This significantly reduces the risks of pursuing in-house investments, saves time keeping up-to-date on the latest developments in accounting software, and brings your financial tech stack into maturity.
5. Time saved to focus on strategy
The most capable members of any organization can only reach their true potential when they are given the freedom to focus on strategic initiatives, rather than get bogged down in routine tactical work. A recent report from Ernst and Young found that even in the private equity industry, where operational control is paramount, outsourcing key accounting functions has become a primary growth driver.
Consero’s own report found that 51% of CFOs cited the time savings as the greatest value of outsourcing accounting and finance tasks. The most ideal functions to outsource, according to these finance chiefs, included:
- Accounting and bookkeeping
- Support for M&A transactions
- Financial due diligence
- General ledger cleanup
- Cash management
- Operational and management reporting
With an outsourced accounting partner overseeing these mission critical, yet tedious, back-office functions, leadership and in-house teams can focus on growing and improving the true drivers of the business.
6. Better competitive insights
Outsourced finance and accounting partners have specialized knowledge in the competitive benchmarks for the industries within which they operate.
For example, with nearly two decades of experience in SaaS, eCommerce, healthcare, professional services, and nonprofit industries, Consero has developed standardized reporting packages and KPI dashboards needed to accurately compare your company’s financial performance against industry standards.
By providing you with a pre-integrated software stack and consolidating your financials in one platform, outsourcing with Consero offers a fully managed solution in which you can:
- Access real-time information to see exactly where your business stands
- Easily visualize and communicate how your business is performing with dashboards that simplify complex data
- Track the progress of your KPIs and make data-driven business decisions more efficiently
7. Real scalability
Outsourcing and contract work has always afforded flexibility to businesses that utilize it. By partnering with outsourced accounting firms, executives gain time back from their days spent pouring over reports, while actually gaining more control over their finance and accounting function.
With an outsourced accounting solution, the scaling process is simplified. F&A providers operate on a variable and service-based pricing model that scales up or down as your business changes, so you have a lower, more predictable cost structure.
For example, service providers can allocate more staff, or deduct staff, as needed or directed by the client.
The scalability and flexibility isn’t limited to lower level accounting functions. For M&A opportunities, outsourcing enables you to hire a seasoned fractional CFO to oversee the acquisition process without committing to hiring a full-time CFO.
8. Funding event preparedness
For rapidly growing businesses, a transaction (such as an acquisition) becomes a near certainty. At Consero, we work with hundreds of investor-backed businesses, 97% of whom have undergone a financial transaction in the past year.
However, completing a successful transaction is no guarantee, and any CFO likely has at least one horror story about the due diligence process.
Whether you’re preparing for a strategic acquisition, an exit, or a capital raise, it pays off to have a seasoned third-party expert providing audit and due diligence support to quickly turnaround reporting requests.
According to the CFOs we surveyed, 74% feel fully prepared for their next funding event when working with an F&A partner, compared to 62% without a partner. With an experienced third-party, not only will financials be impeccable and timely, but leadership will be free to focus on driving the business forward instead of exit preparedness.
Is outsourced finance accounting right for you?
If you’ve reached a stage where you need better reporting, accounting talent, transaction support, or a better way to scale your finance function, reputable outsourcing partners like Consero can simplify your accounting process and give you a clear image of your financial position at a more efficient cost structure.
Hundreds of investor-backed CEOs and CFOs have partnered with Consero to streamline their finance and accounting departments because we have flexible, tailored solutions to meet your needs at every stage of growth.
While our proven Finance as a Service (FaaS) model provides the systems, processes, and people to quickly operationalize your finance function, we also have the expertise to work within your existing system and general ledger if you’d like to keep your existing systems.
Through Consero’s FlexFinance service, we can manage the back-office F&A function from end-to-end process, including closing the books. When you need skilled talent, we can supplement your F&A team via our FlexResources.
Get in touch with Consero to learn more about the most tangible benefits of outsourced accounting.