What is outsourcing?

Simply put ... it is hiring an outside service to perform tasks that are currently being completed within your organization of work that you feel important to your business but never seem to find the time to implement and maintain.

What should I outsource?

There are many benefits to outsourcing activities you currently complete in-house. If "right sizing" is now an integral part of your company's plans, you may find yourself with fewer people to complete required work. Perhaps there are not enough hours in the day to complete work other than that which gets you through to the next day. By "employing" an outside service at a fixed hourly rate or set fee scale (and eliminating payroll benefits and government deductions), you may find yourself saving money in the long run.

There are two avenues that you may wish to consider depending on the "level" of outsourcing with which you are most comfortable. You may wish to outsource some or all of the day to day functions so that you (or a staff member) can focus on your company's future and how to get there ... where you see your organization in five, ten, even fifteen years. If you are more comfortable with keeping your hands on the day to day operations, you may want a "higher" level of outsourcing where a management accountant works with you to develop your vision statement and strategic plan. They will then complete the neccessary series of steps (budget implementation, reporting, procedures) that will assist you in attaining your goal.

Conceivably, you may even be inclined to consider outsourcing your entire accounting function. This enables you to focus your efforts on running your business and generating increased revenue.

Is outsourcing right for me?

That question is best answered by you and your management accountant. It will involve a detailed cost benefit analysis of the work that you are contemplating outsourcing. Also, do not forget the benefits that you may reap which are more difficult to put a cost to.

You also need to consider the entire service being offered through outsourcing. Will financial and management reporting necessary to your organization be more timely? This will enable you to be more proactive rather than reactive in the operation of your business. In addition to this, having a management accountant on your "team" all year round (rather than just at tax time) may enable him or her to prove valuable information or alternative courses of action that you had not considered in the past. For example, cash flow management by an expert means money in your bank account longer.

Where do I get started?

If you are currently working with a Certified Management Accountant you may wish to start with that person. If this is not their area of expertise, they may be able to refer you to someone who is. Keep in mind that you need to be comfortable with and confident of the person and their skills which you will be employing.

Copyright - Kelly Melanson, Certified Management Accountant