Accounting Shortage Increases Outsourcing
Today’s shortage of skilled accounting staff may be widening the need for outsourcing, reports the Ohio Society of CPAs Corporate Focus.
Cutting costs is cited as the primary reason for finance and accounting outsourcing, according to 42 percent of those surveyed by FAO Research Inc. Lack of internal accounting and finance staff followed with 33 percent.
Seventy-one percent of middle-market companies, each with fewer than 5,000 employees, are now outsourcing at least some of their finance and accounting functions. CPA2Biz reports that if you’re sending your tax work to a CPA firm or your payroll to an agency, then you too are already outsourcing.
Middle-market managers also appear to be chasing quality, with about 32 percent of the companies surveyed saying they outsource to improve the quality of their financial and accounting services. Separately, the companies surveyed gave their internal accounting an average grade of 5.89 based on a scale of 1 to 10, with 1 meaning “extremely poor” and 10 being “exceptionally well.”
As a result, even the smallest local CPA firms are launching “Rent-a-CFO” services.
At the same time, the study found that middle-market companies are apprehensive about outsourcing, particularly about sending the work overseas. Forty-seven percent of the survey respondents said they are concerned about losing control of the outsourced process and 37 percent are not especially confident of the security at outsource service providers’ facilities.
In another survey from Everest Research, over 70 percent of finance and accounting outsourcing suppliers view technology as playing a key role in ensuring their future success – adding another factor to the growing trend toward outsourcing.