The COVID-19 pandemic created several new and unforeseen challenges for Chicago businesses. The combination of initial stay-at-home orders combined with forced business closures caught many by surprise. Almost overnight businesses were shut down or forced to operate under modified rules and hours. The result was a wide disparity between income and expenses forcing tough business decisions, including those related to employee cutbacks. For many, there was no other choice but to furlough or terminate employees and narrowly focus on revenue generation to bolster financial vitality. Unfortunately, this has left many departments, including accounting, with a limited number of full-time staff. To resolve the challenges presented by limited resources many have turned to outsourced accounting (i.e., virtual accounting) to bridge the gap. To help clients, prospects, and others, Selden Fox has provided a summary of the benefits of outsourcing during this difficult time.
Benefits of Outsourced Accounting
- Cost Savings – The most important benefit to outsourcing during the COVID-19 pandemic is very likely going to be cost savings. Since many businesses were forced to terminate all but essential staff to cope with the new business environment, outsourcing is a practical, economical alternative to hiring internal staff. Not only does the business save on hiring and benefit costs but will have access to experienced professionals with collective knowledge and the full resources of an accounting firm.
- Accuracy & Consistency – As businesses plan for the post-COVID-19 world, it is imperative to have access to the latest and most updated financial reports. Making important strategic decisions based on information that is inaccurate or outdated will only lead to unexpected outcomes. The speed at which market conditions are changing, especially during the pandemic, means management needs access to the latest financial reports to inform decisions. Outsourcing ensures accurate reports will be delivered when needed.
- Save Time – Even if a business is in recovery mode and may be able to hire new full-time professionals to fill accounting team vacancies, there is a time consideration that needs to be assessed. There will be a considerable time investment to get the new professional up to speed and familiar with processes and procedures. It could be several months before they are able to perform at the desired level. This is a time investment that many are simply unable to make right now. Outsourcing allows management to circumvent this issue by relying on an outside team to manage essential duties while time and attention are focused elsewhere.
- Accounting Software – Maintaining the accounting software and other technology assets needed to properly maintain financial records can be an ongoing source of stress for many businesses. Since outsourced providers work with dozens of companies, they rely on the latest versions of the most popular accounting software which offers the most features and flexibility. This allows companies to rely on the latest accounting software without having to be responsible for the ongoing maintenance and related technology investments.
- Process redesign – While most businesses do not spend much time thinking about how to make their accounting operation more efficient, especially these days, outsourcing presents an opportunity to gain insightful knowledge on various ways to structure your accounting processes. An outsourced provider can leverage their experience with other clients in similar industries to implement new and more efficient processes inside the organization. This allows the organization to be leaner and more cost-effective with their accounting departments for years to come.
The pandemic has certainly changed the priorities of many businesses resulting in a more revenue intense focus. For this reason, it is important to ensure that essential activities, such as accounting and financial reporting, are not neglected. If you have questions about the information outlined above or need assistance with outsourced accounting or interim staffing, Selden Fox can help. For additional information call us at 630.954.1400 or click here to contact us. We look forward to speaking with you soon.