As a small business owner, there are times when you need to DIY and times when you need to outsource. While learning to DIY can be as simple as finding a course or a coach, outsourcing to another business can be intimidating.
Although the main ideas stay the same, outsourcing different departments requires different approaches. For now, we’ll be focusing on the best practices for outsourcing your finance department or financial accounting team.
An outsourced virtual finance department can be an effective strategy for optimizing resources, focusing on core competencies, and managing costs. Even more so when the team is pre-built and ready for you to hand off your books and integrate into your systems.
When looking through these best practices, remember that many should be performed by both sides. Here are our top tips and best practices for outsourcing:
Understand what you aim to achieve through outsourcing (cost savings, efficiency, access to specialized skills, etc). Clearly define the scope, quality expectations, timelines, and deliverables when deciding to work together.
Select a firm to outsource the work to with a proven track record in financial services. Ensure they understand the specific needs of your industry (for example, construction, nonprofit, etc) and have robust security and confidentiality measures in place.
Check to make sure that the firm complies with relevant accounting standards, laws, and regulations. Establish clear quality control processes and regular audits.
Keep an open and effective communication channel between you and the firm. Regularly review performance and provide feedback to ensure alignment with your current and future objectives.
Given the sensitive nature of financial data, ensure that the firm you’re outsourcing to has stringent data security and privacy policies in place before trusting them with your information.
Choose a firm that can scale its services up or down based on your needs. Flexibility is key in responding to changing business environments. This is one of the primary benefits of working with a virtual firm, as they can scale quickly and easily with rapid growth.
Regularly evaluate the cost-effectiveness of outsourcing your finances. Ensure that the benefits outweigh the expenses and risks.
Whatever financial firm you decide to outsource to should be able to integrate smoothly with your internal processes and existing teams. This includes technology integration and workflow coordination.
Finally, you should be transparent about your needs on the first call or discussion. Explain your current financial situation in terms of organization and expectations. If you’re unsure what you need, don’t be afraid to ask for recommendations within your budget, a trusted advisor will send you in the right direction.If you’re curious about how an outsourced finance department would work in your business or organization, book a free consultation call with ModVentures today.