Should You Outsource, Insource, or Co-Source Your Accounting?
Many midsize businesses are debating whether to outsource, insource, or co-source their accounting functions. Here, we define those terms and offer three strategies that might help your business reduce costs and operate more efficiently, even during periods of transition and growth.
Traditionally, accounting functions like internal audits were nearly always performed by internal employees. Now, though, you have three distinct models to choose from:
- Outsourcing: You hire an outside contractor or organization to complete specific accounting tasks for you on an as-needed or contract basis.
- Insourcing: You have one or more employees take care of all your accounting tasks (the traditional model).
- Co-sourcing: You split the difference, with internal staff working with an external organization to complete tasks.
Let’s look at three ways you can use these different approaches to solve specific business needs.
Outsource during transitions
We often see companies opting to fully outsource their accounting functions when the business is in transition. In turbulent times, with many resources being pulled in different directions, it makes a lot of sense to have an experienced outsourcing provider take care of everything from daily transactions to CFO functions.
Outsourcing all of your accounting responsibilities enables your internal personnel to focus their time and energy on more pressing concerns.
Co-source a CFO
Many midsize companies prefer to insource because they’re happy with their existing bookkeeping and accounting team. But when the business needs leadership, experience, and insights not available from the internal team, it can make sense to bring in external CFO services.
With this co-sourcing model, you pay only for the time you need from the CFO, benefiting from their expertise without committing to a full-time hire.
Co-source day-to-day functions
Another option is basically the inverse of the previous one: Maybe you have great leadership in the form of an experienced controller or CFO, but you’re struggling with staffing and coverage of day-to-day functions. That’s a common situation, especially for growing businesses.
Outsourcing firms can help you cover the specific accounting functions you need, from month-end closes to end-of-year reports. They can also implement the latest systems, processes, and automation to help ensure that you’re building efficiency from the bottom up.
Insero & Co. is a public accounting firm with decades of experience working with both small and large businesses. Our experts deliver customized consulting services, including serving as an extension of our clients’ accounting departments or filling specific positions to meet immediate needs.