For financial professionals, it can be hard to imagine outsourcing your accounting and tax services to an outside vendor. Despite the challenges you may face with hiring and retaining staff and meeting work demands in limited time frames, you may be reluctant to consider outsourcing.
Many myths persist about outsourcing, especially in the accounting ecosystem. Let’s take a look at the truths behind these common myths, so you can decide if using outsourcing accounting services would ultimately work for your business.
1. Outsourcing means I’ll lose control over my company’s financial operations.
It can be tough to hand over any aspect of your operation, especially when you’re in the accounting and finance industry. You may be concerned about the possibility of losing a say in your company’s most critical asset: its finances. However, most outsourcing vendors want to partner with your business – involving you in the process as much as you choose. You will receive regular communication, updates, and reports from the company.
The level of services you choose to outsource is also up to you. For example, many firms struggle during tax season, while others experience the most challenges during month-end close. You’ll ultimately be able to approve the work that the outsourcing partner completes for you. And instead of losing control, you will free up time spent on time-intensive administrative tasks and leverage the more accurate data and reporting to make better business decisions.
2. If I outsource my accounting and tax services, our clients’ data could be at risk of a data breach.
Many tax and accounting firms worry about the possible lack of data security if they outsource any part of their accounting and tax services to an outside firm. Since you’ll be sharing some of your most sensitive client data, it’s normal to feel concerned about the possible cybersecurity dangers. The good news is that a best-in-class outsourcing vendor will either match or surpass your firm’s current data security protocols. Their job is to perform your outsourced tasks with specialized expertise — and keeping your data secure in the process is a huge part of that undertaking.
An outsourcing vendor should be compliant with the global standards for data security, such as ISO 9001 and 27001. When vetting a potential vendor, be sure to ask how your data will be protected and stored. A potential vendor should be happy to share their security practices and tools to protect client data so that you can have the utmost confidence with your outsourcing arrangement.
3. Outsourcing will result in lower quality of our firm’s accounting and tax services.
This is a common myth in the accounting space about outsourcing accounting and tax services. After all, you’re an expert in this field and might wonder about the level of expertise an outsourcing vendor can provide. The good news is that outsourcing vendors in the accounting and tax industry provide highly trained professionals with the necessary experience and credentials to deliver superior results. A high-quality outsourcing vendor provides you with affordable, experienced staff resources you need as your business grows.
Outsourcing accounting and tax services can also result in other advantages. According to this report, 30% of companies outsourcing accounting have received advice from their outsourcing partners that enabled them to increase profit and make better business decisions.
4. I’ll have to lay off my staff if I outsource.
Many people fear the loss of jobs for their experienced and dedicated staff members. Outsourcing, after all, can free up a lot of time that your staff would be spending on time-intensive tasks. The reality, though, is that outsourcing won’t take away your valued employees’ jobs. It will simply enable them to devote more time to their most important responsibilities without becoming overloaded. Outsourced accounting firms can also help your staff deal with ongoing challenges, such as month-end close, or keep up with constantly changing tax laws and the complexities associated with this tax season’s COVID-19-related relief.