Tuesday, May 5, 2009

The Future of OutSourced Accounting

I was speaking to one of my competitors, he has turned into a pretty good friend, and the subject of our company’s futures came up. The discussion was lively both of us sharing ideas, coming up with new ways to better serve our clients, but also trying to lay a road map for the next five years. Our decision, the future was pretty bright.

The topic of outsourcing payroll truly spurred this conversation. I can still remember graduating college, and the company I worked for absolutely refused to outsource payroll. It was a violation of privileged company information. What if they sold employee information? What if our competitors were able to get this information and use it against us? Five years later, they were on the band wagon, and would never dream of bringing the processes back in house. What changed? What finally made them realize this was the right thing to do? I think it was time.

Although they could have outsourced payroll processes long before they did, they needed time to make sure the processes truly were secure. To verify that the company was going to be in business now and into the future so once the processes were turned over, they would not need to be concerned their data was sitting in an unstable company. I believe this same test is now happening with outsourced accounting.

Although there has been outsourced accounting companies offering services for many years, companies are just starting to realize there are truly stable, well formed businesses providing a quality service for a reasonable price. And I believe company management is finally starting to see, these businesses have a true investment in providing a professional, quality based service. Business owners are getting a taste of how outsourced accounting companies provide a true team based accounting process.

There are many quality firms to choose from, TAD being one of those. And while all of our accounting processes from data entry to the financial package creation are done by US based accountants, other companies can provide outsourced solutions that include India based data entry to financial preparation by trained accountants in China. Some company’s are new, while others, like TAD, have been in the business for 14 years or more. TAD and its competitors are always looking for new ways to build security into the service, so the client at all times understands their financial health, is our financial health. In order to provide this comfort the industry is building new access platforms, security is invested in, and partnerships with larger software firms are beginning to flourish.

I believe that the outsourced accounting market will be larger than the outsourced payroll market. Companies will over the next few years quickly embrace the fact their internal accounting department is the only revenue neutral department in the business. They will see outsourcing is beneficial, as the accounting teams are trained, and instead of a few employees, they have access to an entire team of trained accountants and CPA’s.

When the businesses begin to realize outsourced accounting firms like TAD, see their client’s financials as the lifeblood of not only their firm but the client firm, and working with each other as teams is the most beneficial way to perform accounting, the floodgates will open, and our industry will flourish.

Scott West / COO www.tadaccounting.com

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