Alternative Approaches to Accounting Outsourcing
“Increasingly stringent financial reporting requirements and the pressures of right-sizing have created an unprecedented demand among . . . financial executives to augment their internal financial staff for key projects, Robert Siegfried, president and CEO of The Siegfried Group, told the Business Journal. “So we provided a flexible human resources solution: Our clients gain the capabilities of our talented professionals but still keep control over a project to minimize project risk and reduce cost.”
The Siegfried Group sold its traditional accounting practice at the end of 2005 to focus on Accounting Resource Services, AccountingToday reports.
One company with resource services needs is Exelon Corp., which announced an agreement to merge with PSEG of New Jersey in 2004. The merger has not yet been approved by regulators, the Journal says, and in the meantime, the company faces hiring restrictions. “We have had projects that we wanted to own internally, to control in-house, but we haven’t been able to hire full-time people to meet the demand,” said Jon Veurink, vice president and controller of Exelon Generation, a subsidiary of Exelon.
Smart Accounting and Consulting provides professionals for positions from CFO and controller, to accounts receivable. John Swanick, managing partner of Smart’s Philadelphia office, told the Journal that along with cost benefits, the Sarbanes-Oxley Act is driving the demand for resource services.
Stephen Leff, managing director of CBIZ, another accounting firm that has developed a resources service specialty, agrees, according to the Journal report. Leff says that independence rules have presented clients with a dilemma – they can no longer rely on their external auditors for consulting services. “Companies are forced . . .to go to a competitor of their external auditor for help [with SOX compliance] or to rely on a resource services company.”
Robert Half International Inc.’s Management Resources group provides high level accounting professionals for “crisis and transitional management, mergers and acquisitions, and more”, according to the company’s Web site. The Half professionals work on either an hourly basis or through the Management Resources’ salaried executive program.
In another new approach to outsourcing accounting functions, LosAngelesQuickbooksHelp.com now provides offsite bookkeeping services to small businesses, expertclick.com reports. Firm manager Joe Kennedy says that traditional bookkeeping requires providing a workstation for the individual to make entries which adds overhead cost, even if the person was not an employee of the company.
The new Internet service offers two options. Under the first, entries are made at Kennedy’s offices directly into the client’s PCs through online service software or a Virtual Private Networking (VPN) connection. Where the security of client systems is a priority, a second option allows Kennedy’s staff to input accounting data to a remote, secure location.
“This is a great alternative for small business all over,” Kennedy said, according to expertclick.com. “We can do things in a less disruptive manner, more accurately, under better management, and above all at better rates.”