The Power of Outsourcing

Just like some CPAs are outsourced CFOs for their business clients, CPA practices often see the benefits of outsourcing for themselves. From companies in India doing their tax prep to outsourcing their IT, this trend is a continuing one for CPAs.

Many CPAs suggest that businesses outsource their accounting and/or payroll to them, so their clients or would-be clients can focus on the key functions of running their business. Similarly, there are many areas CPAs can benefit from outsourcing to others. As a CPA, you are of course an expert in many areas - tax, accounting, maybe also some specialty work. But it is difficult to be an expert in all seven or so areas that every organization consists of – including HR, marketing, IT etc.

The practice that tries to “do it all” inevitably contracts or grows at a much slower rate. Even within the billable division of a CPA firm, many are outsourcing work. About 8-10 years ago, firms started outsourcing tax prep to India, and while that met with understandable concerns initially, we now have many clients, who are extremely happy at how it has helped their practice. They get good quality work and on an as-needed, tax-season-only basis, which keeps overhead down. Some firms are also outsourcing their bookkeeping either within the US or outside, or even outsource their IT. Those that don’t are either larger or have to work long hours whenever there are issues that need to be dealt with.

Here are just a few reasons to potentially outsource:

  • If the task requires a skill that is not in your core competence; 
  • If outsourcing would result in more efficiency - i.e. the task would get done faster, so you can devote more time to do more crucial work
  • If the quality of the outcome would be higher - an obvious example here would be having a website company create your website rather than "do it yourself." But there are lots of other less obvious examples that may be overlooked. 
  • Marketing is a big one, because often this is an “omitted function” for practices, i.e. they are not outsourcing it, nor are they doing it themselves. Email marketing campaigns could be outsourced, LinkedIn Marketing campaigns could be outsourced etc., the list goes on. Neither the CPA nor staff have much experience or skill in these areas.
  • Hiring is another big one. Recruiting of staff, when the usual ads do not produce results, is not a skillset CPAs generally have time to acquire. However, as a result, there are many practice owners very overworked from the lack of ability to hire. 

Chances are that, over the life of your practice, you have looked at outsourcing to free up more time or create more growth. Here is the list of areas many practice owners are spread too thin trying to handle:

  • Executive Planning - this consists of your goals, plans to achieve them... Generally involves working with your Office Manager to help you execute them.
  • HR - hiring, making sure staff are productive, disciplinary issues are handled, as well as measures to increase staff morale, team building etc.
  • Accounting - ensuring fees are what they should be, that you are getting paid, any AR is being handled, your own bookkeeping is up to date and accurate etc. Billable tax work, bookkeeping, accounting, financial statements, specialty services..
  • Quality Control - consists of 2 parts . a) ongoing staff training and Continuing education. b) Client satisfaction surveys and handling any complaints that might arise.
  • Marketing - outreach into the community to get new clients and new client referral sources. Online and Offline marketing.
  • Marketing internally and Sales - keeping in great contact with existing clients so they continue to use your services as well as up-selling them to higher level services that they need.

Ask yourself: What areas am I covering that are not very productive of my time? What areas am I not covering very well? What areas am I covering that I really don't care for? What areas am I not covering at all, but should be?

Hopefully the above helps you take a fresh look and perhaps realize more opportunities available from outsourcing. If you have any questions on resources other CPAs are having success with as regards outsourcing, we are happy to provide info.

Author Bio: Having worked with accounting practices since 1998, and prior to that working as an attorney in a set-up, very similar to a CPA practice, Ciara MacMahon, CEO of Phase Two Management Consulting, has successfully boosted revenues of accounting practices by 3 – 4X, while allowing the owner to take more time out of the practice. Accounting practice owners are faced with endless deadlines and the challenges of managing workflow, finding the right staff, staff training as well as securing the acquisition of quality new clients! They are also often tasked with the not too pleasant responsibility of imparting bad news regarding taxes due, that the unprepared client is unhappy enough about, to oftentimes ‘shoot the messenger’!

As no two practices are the same and each owner has his own vision for what he/she wants, the first step is a Planning Session to work out the owner’s goals and a strategy to obtain them, in the fastest time period, and for the highest return. To schedule your one on one complimentary practice analysis and consultation, email Ciara MacMahon at consultantciara@gmail.com today. www.PhaseTwoManagement.com