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.

 

You may like these other stories...

From May 20-23, the Association for Accounting Marketing (AAM) held its annual conference. Frequent contributor Sally Glick picked up some ideas that she will be sharing with us in the coming days, as she has done in...
Success, for a practitioner in a busy CPA firm, requires the ability to handle multiple tasks effectively. To get everything done, CPAs typically track their agenda with a "to do" list or other open-item systems to...
Everyone loses clients. You've seen the statistics. Clients and heirs often change accountants, attorneys, and advisors after a death or divorce. That's understandable. What about ongoing relationships when the...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.