Outsourced Accounting with a Team of One: The Finance & Accounting Evolution

February 7, 2024 Theresa Rex

Bookkeeper working on a project about the evolution of finance outsourcing

It's true that in life, the only constant is change. That certainly extends to the way we collectively do business, whether we experience those changes piecemeal or as a whole. What drives those changes? Technology, certainly. Consumer need, frequently. And of course, there are the kinds of changes we never even saw coming. Where the offshoring and outsourcing industry is concerned, Finance and Accounting Outsourcing (FAO) has unquestionably experienced a kind of rapid evolution over the past few decades, and two core changes to the model stand out. Read on to learn how companies are engaging with outsourced accounting companies to outsource a team of 1 individual.

First, as the individuals within a business make purchasing decisions that are more akin to the ones they make as individual consumers, the perception of outsourcing accounting processes is one that treats FAO as a service instead of a product. This has created space for another, crucial change to occur: competitive FAO providers offer a wider variety of solutions to meet the demand for the personalized buying experiences corporate consumers are increasingly demanding.

Build Better B2B: Download Our Free B2B Customer Experience Guide

FAO as a product was a one-size-fits-all offering – and that left any company that only needed one or two outsourced accounting resources in the lurch.

FAO as a service is tailor-made to the client – even small-to-midsize businesses can take advantage of an efficient, low cost virtual accounting team, even if that team is made up of just one person.

Lean Accounting Teams Can Help Every Organization Get Access to Decision-Ready Financial Intelligence

Finance team in a meeting with graphic overlay showing financial artificial intelligence

Suddenly, FAO isn't just for enterprise companies anymore. Without steep minimum hire requirements or contracts that demand organizations contort themselves to fit inside a rigid set of parameters, "lean" accounting teams are available to every organization, at any size. That's going to be more and more important as the role of the CFO continues to evolve away from one that focuses on transactional bookkeeping and toward that of a data-driven strategist.

Zooming out for a moment, it's worth revisiting the concept of "lean operations" in order to get a workable definition of what, exactly, a lean accounting team is. Lean operations strive to eliminate waste while making the most of available resources. Unfortunately, when it comes to talent – particularly in the finance department – "making the most of" the skilled professionals keeping the books can sometimes mean overtaxing and eventually burning them out.

How on earth can you get solid strategy out of the CPA you likely spent months searching for in today's dwindling talent pool if they're being asked to do the work of a strategist while grinding through piles of value-neutral bookkeeping?

Read More: The Difference Between Accounting and Bookkeeping (And Why It Matters)

Really making the most of this talent means getting all of the necessary bookkeeping tedium that won't contribute to the growth and success of your company off their plate so they can do the judgment-based work you hired them to do! True lean accounting doesn't mean hiring one accountant to do the job of three. Lean accounting means adopting a process flow that:

  • Solves efficiency problems by rectifying the processes that create them

  • Fosters professional development by investing in the people it employs and serves

  • Pursues organizational improvement through organizational learning

  • Adopts a long-term growth strategy in lieu of short-term financial gains

The means to address each of these four components of lean accounting is baked right into finance and accounting outsourcing:

A knowledge transfer stage that allows for a deep dive into existing processes and then accurately and carefully documents them.

Without the distraction of bookkeeping tedium, your in-house talent can use their expertise on the value-added accounting strategy that you hired them to do.

Tribal knowledge is the enemy of accounting time well-spent, and outsourcing helps capture and universalize it.

While FAO does represent a 50-75 percent cost savings, it's the ability to reinvest time into data driven decision making that fosters true growth.

It's a single solution for a number of problems.

With the scarcity of skilled accounting talent in stateside labor pools, it's clear that you need leverage every in-house resource to make the most of their skills and judgement, and that finding an alternate talent pool to fill bookkeeping roles that are prone to high turnover stateside will help you lower costs and save time. You need to capture the tribal knowledge that tends to escape through the revolving door of employee turnover, and you need to make existing procedures as efficient and universal as possible. Just imagine what your team could accomplish if they could spend the time typically devoted to rework concentrating on other responsibilities instead. The truth is, A qualified outsourced accountant might be one of your best company investments.

Find The Best Outsourcing Team For Your Needs, Not Your FAO Provider's

Here at Personiv, we firmly support the evolution of finance & accounting outsourcing. And when we speak to prospective clients looking to adopt a lean accounting approach, they're usually surprised to learn that they can add just a single virtual team member. But why not? The newest iteration of FAO is practically boutique, especially as finance leaders are realizing that minimum commitments in outsourcing contracts are rapidly becoming nonstandard. Minimum volume and hire clauses do nothing to serve the client, and in a B2B marketplace that's placing greater emphasis on customer experience, you don't need to sign up for one.

You have options, not just when it comes to who choose to partner with while outsourcing finance and accounting, but the option to choose how large or small your supplementary accounting team will be. That means that you can outsource your entire accounting department or hire a small team of one for your bookkeeping tasks or choose a combination of in-house and virtual accounting talent to create the solution that best suits your needs:

outsourced accounting hierarchy

the evolution of finance & accounting outsourcing graph

If you're not sure what that might look like for your organization, it may help to start by looking at four common conundrums within accounting departments that are effectively addressed with an outsourced accounting team of any size.

How Finance & Accounting Outsourcing Can Help Time-Rich, Talent-Scarce Companies in Constant Evolution

evolution outsourcing team working on different tasks in office

Most companies considering outsourcing will be painfully aware of this conundrum. The American Institute of Certified Professional Accounting (AICPA) has warned that 75 percent of currently employed CPAs will have retired by 2024, and the talent needed to replace them simply isn't coming through the pipeline. Each year, the number of new enrollments in accountancy courses drop across all levels of education.

This makes accounting talent harder to find each year, and it's only going to get worse. Of the finance leaders we polled, 81 percent said they had difficulty hiring across all experience levels, and 50 percent said that lower-level accounting talent, such as accounts payable and receivable were the hardest to find.

Get More Insights From The Survey: Download the Finance & Accounting Talent Market Outlook

Combine this with the heavy turnaround in accounting departments caused in part by the extreme burnout that this talent shortage creates, and you've got an expensive revolving door on your hands. However, what's true in the states isn't true everywhere. In Manila, for instance, there is a well-stocked talent pool of accounting professionals that are certified to the same standards as CPAs here.

Organizations with Top-tier Talent but No Time for Strategy

Accountant adapting to the constant evolution of accounting outsourcing

Even if you have a no trouble filling seats, you might find yourself in the frustrating position that 88 percent of the CFOs we surveyed said they experienced – an overload of transactional rework that distracts from strategic decision-making.

That means that the high-level talent you are able to find is often busy doing menial rework that – while crucial – simply doesn't add any value. This kind of stasis can also be expensive. Why pay top dollar for 3-way invoice matching and invoicing when the addition of a single virtual accountant can take this value-neutral work off of the to-do list of your in-house team?

The Evolution Imperative: Finance & Accounting Outsourcing Solutions for Businesses with Incomplete Tech

CFO working with disparate technology solutions amidst the outsourcing evolution era

Robotic process automation (RPA) has gotten a lot of attention lately as a promising solution to talent shortage challenges – why not allow rework to be automated through an algorithmic process and skip the accountant altogether? However, companies that approach RPA with the goal of leveraging headcount inevitably find that the technology isn't all the way there yet.

That shouldn't discourage leaders from looking to innovative solutions like RPA. They just need to be realistic: automated accounting is a useful tool in the hands of human beings, and with a tech-agnostic FAO provider that has access to a tech-savvy talent pool, it's one that can be used in service of your organization's goals.

Companies with Deployable Infrastructure That Defies In-house Models

accountant working in virtual infrastructure

Finally, there are the organizations that spring up an around an idea or product, adding back office operations or building out the infrastructure required for them around that central purpose. This is particularly common around startups that already work in a majority-remote setup.

Typically, the finance leaders in these organizations may turn to a third party to handle accounting processes with a fractional resource until they need a solution that operates at scale. Outsourced accounting allows them to do what already works well for them when that time comes, and replace those resources with virtual professionals.

The Evolution of Finance & Accounting Outsourcing: How to Outsource Small Projects (Hybrid Hiring and Remote-Ready Teams)

finance manager speaking with team remotely

So what options are left to organizations that have tried everything from algorithmic to alternative staffing solutions but still struggle to close their books accurately and quickly each month?

This is where the updated model of FAO provides a truly lean solution. BPO partners with a roster of legacy partnerships have lived through the seismic shift that has made the model accessible to a more diverse set of industries and organization sizes -- and have emerged with a sustainable white-glove approach as a result.

They operate as a hybrid of in-house hiring models and staffing firms without the inherent drawbacks that have begun to plague both in the past decade. Overseas locations like the Philippines offer a highly-educated, culturally compatible talent pool that's well stocked and prepared to follow the Generally Accepted Accounting Processes (GAAP) that stateside companies expect.

See Why Finance Leaders Outsource To Manila With Our Free Special Report On The Philippines

Because supply keeps up with – and may even outpace – demand in this regard, this talent is available at a much more realistic price point, even before exchange rates are considered.

What's more, because the location is remote, companies can interact with their FTEs as though they were virtual additions to their own teams without fostering the resentment that can sometimes flourish in stateside in-house configurations that depend on a contracted workforce.

Many organizations have had to rapidly adjust to a remote office configuration whether members of their team are across state lines or within city limits, making now the perfect time to bring offshore accounting talent into the fold.

Outsourced Accounting is an Effective Accounting Solution at Any Size ... And Every Size

outsourced accountant smiling

Accounting talent has not and will not disappear, it's simply relocating – thriving in regions that are culturally and practically accessible and growing in communities that are more familiar than expected. In a market where every idea can be turned into a new way to meet untapped consumer needs, growth is everything. Every last bit of an organization's three key resources -- money, time and energy – must be utilized strategically and made the most of.

FAO is no longer the inaccessible hallmark of multinational enterprise organizations. Providers with legacy partnerships and proven employee engagement models are your best bet for creating a lean accounting strategy and launching it as unobtrusively as possible. You can choose a structure that best suits your needs – including virtual team sizes of just one – and as your needs change, so can your lean accounting solution. As your organization grows, so does your team.

The finance & accounting outsourcing evolution is upon us. It is elastic, scalable and nimble. All you need is the right partner.

For over three decades Personiv has delivered custom, cost-effective solutions that improve the efficiency of teams of all sizes across the globe. Our highly-skilled people power everything from accounts payable and general accounting to payroll and tax reporting – and beyond.

We know that one is a powerful number. A single idea can launch a business. The right leader can help it grow. And just one skilled accountant is all it takes to unlock efficiency in transactional processes so strategy can take center stage.

If you're ready to see what lean accounting can do for you and experience the evolution of finance outsourcing, give us a call or simply fill out the form below.

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