December 5, 2011 by Ed Becker
Most CPA firms are looking for ways to expand and obtain additional clients. In this competitive market, some CPAs are offering additional services including insurance products, investments, financial planning, human resources and outsourced bookkeeping. Each situation is different, but one underlying fact that firms should consider is how to hire and train bookkeepers while still focusing on core CPA services – tax and attest functions.
CPA’s should focus their energy and time on the more complex issues that involve their clients. Tax planning, financial disclosures and strategies to enhance client profitability are where CPA’s show their “added value”. By outsourcing the day to day processing (accounts payable, accounts receivable, bank reconciliations, loan account reconciliations, etc.) and knowing that the product they are reviewing is accurate, CPA’s can provide enhanced services to their clients at little to no additional costs.
When evaluating a service provider, CPA’s should look for the following attributes:
- Software packages supported
- Quality control procedures used
- Referrals and discussion with current clients to validate what provider is promising
- How is staffing structured and will we be working with the same person and/or team
- Knowledge and experience of Management team
- Length of time in business and financial strength of provider
- Skill level of staff and years of experience
- Geographic areas covered if not supported by On-line service
- Turn around time of work product.
Several benefits of outsourcing bookkeeping functions to a service provider are:
- Independence is not impaired, allowing you to still perform attest functions
- Processing and quality controls are done by outside experts
- On-line access can be made available through various hosting services if not offered by your firm
- Reduce client visits and travel time, thus enhancing your realization rates
- Work with the outsourcing provider to customize your preferred reporting formats, thus helping with financial statement groupings
- No dedicated partner required to hire, train and monitor quality within the bookkeeping department
- Utilize a more economical labor alternative that can be re-billed at higher rates or pass savings on to your clients
- Some firms are set up to handle after-the-fact write-up services, not processing from source documents (ie. Paying bills, invoicing, fielding vendor calls)
- No desk, computer or overhead costs required to maintain adequate staffing levels
- No downtime/unbillable staff time, as this is absorbed by your service provider
In order to grow your business and provide high-end services to your clients, you must provide constant supervision and controls. CPA’s should not be reviewing the accuracy of each expense posting but focusing on ratios and reasonableness. In most circumstances, CPA firms are able to obtain more profitable business, such as consulting, attest and tax work. These services are best left to firms that specialize in outsourcing who can tailor their services to the individual needs of each client.