Outsourced Accounting Services: Is Your Organization Ready?

Many small businesses, startups, and nonprofits are turning to outsourced bookkeeping and accounting solutions that offer expert financial support at a fraction of the cost of building a full internal team. In fact, "37% of small businesses now outsource their accounting processes

As a business owner, your daily checklist is long—and managing your finances sits at the top. Without well-balanced books and a detailed growth strategy, you can't expect long-term success. But it's difficult to find time to focus on accounting when you have countless other priorities.

You could try your best, but a few math mistakes could result in unexpected expenses. Even if you hire an accountant, managing finances for a fast-growing business is still overwhelming for one person. That's where outsourced accounting services come in.

Here's everything you need to know about outsourced accounting: how it works, the benefits, costs, and how to know if you're ready to make the switch.

What is outsourced accounting? 

When you outsource your accounting, you rely on a third party to provide finance and accounting services to your organization.

Just like if you had someone in-house, outsourced accounting services can cover:

• Bookkeeping
• Accounts payable management
• Financial reporting & analysis
• HR & payroll services
• Spend management
• Tax services
• CFO advisory services 

But unlike having an in-house team, there are certain perks you only get when you outsource.

7 benefits of outsourcing your accounting functions

Outsourcing finance and accounting services offer benefits that aren’t always possible with in-house teams. 

1. Save time on bookkeeping

While bookkeeping is necessary, it's tedious and time-consuming, preventing your finance or executive team from focusing on other business areas.

Outsourced bookkeeping services ensures these tasks get accurately completed while freeing up time for your internal employees.

2. Save money on full-time staff

Internal finance positions, especially Chief Financial Officers, cost a pretty penny to fill. 

Outsourcing gives you all the services you need to effectively manage your finances without the high price tag of an in-house, full-time team.

3. Access expert knowledge

Financial management is complicated, and going it alone can be confusing at best and detrimental to your business at worst. 

An outsourced accountant uses years of experience to ensure your books are balanced, expenses are covered, and you have a solid growth plan.

4. Become proactive about your finances

When you’re wearing so many other hats as a business owner, finances can get pushed aside. 

Outsourcing puts your financial management in the front seat by giving you flexibility to get help with specific services or place your entire financial function with a trusted external team.

5. Generate accurate financial reports 

Financial reporting isn't straightforward, but it's essential for understanding your current financial stability and planning for the future.

Outsourced accountants and fractional CFOs can expertly prepare financial reports that give you the insights needed to make strategic business decisions.

6. Automate your accounting functions

Doing all your accounting and bookkeeping by hand is inefficient, exhausting, and leaves way too much room for mistakes. Nearly 40% of accounting tasks are now automated, and companies that have adopted AI into their accounting processes report as high as 45% cost savings.

Hiring outsourced accountants gives you access to their technology stack, like financial dashboards, to automate financial management tasks, save time, and reduce errors.

7. Easily scale your business 

You can't be stuck with rigid, inflexible accounting and financial operations as you grow.

Outsourcing your accounting services ensures you can easily adjust your financial operations to match the speed and capacity needed to scale.

The benefits are clear, but deciding when to make the jump from in-house to outsourced can be tricky.

8 times you should outsource accounting

If you're deciding when to outsource accounting, several scenarios make bringing in outside help a wise choice.

1. You want the best talent

If you haven't found the right person to fill an in-house role or can't afford to hire someone full-time, outsourcing for virtual accounting services lets you work with highly skilled financial experts you wouldn't otherwise have access to.

2. You’re going through a growth period

You need to handle growth periods carefully, including how you manage your money.

An outsourced accountant can ensure your financial activities and operations scale with your business – without needing extra full-time help.

3. You want the latest technology

As a small business, you don't always have funds to upgrade to the latest tech solutions—or time to research them.

Outsourced accounting firms maintain the highest level of technology capabilities to remain competitive. That means you can leverage their solutions to efficiently support your accounting and financial operations.

4. You’re prepping for a funding round

When you’re approaching investors or banks for additional funding, every financial report you show them needs to be complete and accurate – and there are a lot of figures they’ll want to see.

You can rely on an outsourced or fractional CFO to put together the reports, forecasts, and financial plans you need to remain compliant with accounting principles and optimize your chances of getting the funding you need.

5. You’re trying to manage internal costs

Keeping a full-time accounting team is expensive. You’re paying hundreds of thousands of dollars in combined salaries, before insurance and benefits. That accounts for a huge chunk of your expenses.

You can free up your money to be used elsewhere (without sacrificing service or skills) by outsourcing accounting teams at a fraction of that cost.

6. You’re struggling to manage accounting on your own

Trying to manage your books, account for payroll, fulfill supplier invoices, and plan for your financial future can be extremely overwhelming.

Outsourcing gives you some much-needed assistance in managing your finances and helps you remain compliant with every task.

7. You’re losing money

If you’re hemorrhaging cash and can't figure out where you’re going wrong, it might be time for an objective opinion of your financial activities and operations.

Outsourced accountants come into your business with fresh eyes to examine your books, find problem areas, and offer strategies to save your business.

8. You’re running a nonprofit with limited resources

As a nonprofit, you need to be intentional and strategic with every dollar you have. There’s no room for costly accounting mistakes that saddle you with noncompliance fines or leave you struggling with cash flow month after month.

Especially when you don’t have the budget to hire a full in-house accounting team, outsourcing accounting services can ensure you have:

• Real-time financial insights in grants and cash flow
• An accurate chart of accounts
• Engaging nonprofit board reports 

You just need to make sure you choose a team that knows the nuances of nonprofit accounting and understand why it’s a benefit:

• Industry expertise — Outsourced accountants with nonprofit experience are usually better-versed in the various compliance and regulatory requirements 501(c)(3) organizations must carefully follow.
• Nonprofit-specific accountable experience — Similarly, these accountants will have a strong grasp on the intricacies of fund and grant management, as well as the specific financial KPIs nonprofits should track.
• Board reporting capabilities — Outsourced accountants can gather the necessary financial statements and produce detailed, engaging nonprofit board reports that give your team the answers they’re looking for.
• Affordability — Nonprofits have limited resources, so any area where you can limit expenses—without sacrificing quality—is an advantage. Outsourced accountants are almost always more affordable than in-house hires.

Speaking of affordability…

How much do outsourced accounting services cost? 

You're almost guaranteed to spend less on outsourced accounting services than in-house services. While the cost depends on your needs and the breadth of services required, even a full-service agency usually comes at a lower cost.

Comparing the average cost of accountants:

• In-house clocks in at around $79,902 a year
• Outsourced accountants typically range between $3,600 and $25,000 a year

What if you need a CFO to guide your financial operations and growth?

• An in-house CFO averages upwards of $400,000 a year
• An outsourced, fractional CFO is typically around $2,000 to $14,000 per month.

So the benefits are clear, the price is right…but what does the process of outsourcing look like?

How does outsourced accounting work?

The process you’ll go through when hiring an external accounting firm can vary based on your needs—but you can expect a few things when you find the right team.

The ideal outsourced accounting firm will: 

• Perform a full assessment of your business needs and current functions — Everything is out in the open for a complete analysis.
• Partner with you to talk through your goals — Your goals inform every decision and strategy your outsourced team suggests.
• Set up necessary technology tools — Back office software, automations, and workflows support your financial plan.
• Offer ongoing support and touch bases — Communication remains strong throughout your entire relationship.
• Deliver the value you’re looking for — The results you planned on seeing from your paced strategy actually happen.

Comfortable with the baseline of what you should expect from an outsourced accounting firm? Great! Now, it's time to consider the factors that go into your ideal option.

How to choose the best outsourced accounting firm

When searching for outsourced accounting services, consider a firm’s:

• Service offerings — Do they offer the services you're looking for?
• Technology offerings — How do their technology stack and capabilities compare to other firms you're considering?
• Communication level — Do you have a team you can reach out to at any time that gives you prompt answers?
• Process approach — How do they align with you on your goals and develop a plan that fits your business needs?
• Security and accreditations — What steps do they take to ensure your financial data is safe and secure?

You should also look to avoid common mistakes in choosing a firm:

• Only outsourcing locally — The accounting space is filled with talent. Don’t limit yourself to only the firms in your neighborhood.
• Choosing solely based on price — The cheapest firm is not necessarily the best. It’s worth investing in a firm that actually provides you with the level of service you deserve.
• Not researching enough — Don’t always go with the first choice you see on a web search. Take the time to explore all your options.
• Not finding the right culture fit — Only partner with a firm whose values and culture are similar to your business’s. 

So, what’s it going to be?

Ready to explore outsourced accounting for your business?

Outsourcing your accounting can be a bit scary. After all, you’ve built your business from the ground up on your own, so it’s fair that you’d be hesitant to bring an external team on board.

Hiline isn’t your average firm. We began with the goal of pushing the boundaries of what an accounting firm can be and go far beyond your basic bookkeeping.

Using tech-enabled accounting systems, we tailor our solutions to fit your unique goals. Whether you're exploring outsourced bookkeeping services, improved financial reporting, or need full accounting operations help, we’re here to help you scale with confidence.

Let’s build a plan that lets you focus on what you do best and unlock your business’s potential.

Frequently Asked Questions About Outsourced Accounting Services

What's the difference between outsourced accounting and in-house accounting?

In-house accounting involves hiring and training internal staff to handle financial tasks. Outsourced accounting relies on external experts who are already equipped to manage a businesses' financial operations. The key differences include cost structure, expertise level, and resource allocation. In-house teams require full-time salaries, benefits, office space, and ongoing training, while outsourced services can be tailored to your specific needs and budget.

How is outsourced accounting different from hiring a freelance bookkeeper?

Unlike a freelance bookkeeper who typically handles basic data entry and reconciliation, outsourced accounting services provide comprehensive financial management including advanced reporting, strategic planning, and compliance support. Outsourced firms offer team-based support with specialized expertise across multiple areas, ensuring continuity and depth of service.

What services are typically included in outsourced accounting?

Services can include managing payroll, accounts payable, accounts receivable, monthly bank reconciliations, tax prep support, legal compliance and financial reporting, among others. Many providers also offer advanced services like CFO advisory, financial analysis, and strategic planning.

What should I expect during the transition to outsourced accounting?

The ideal outsourced accounting firm will perform a full assessment of your business needs and current functions, partner with you to discuss your goals, set up necessary technology tools, offer ongoing support and regular check-ins, and deliver the value you're looking for. The transition typically involves data migration, process setup, and establishing communication protocols.

How secure is my financial data with an outsourced provider?

Reputable outsourced accounting firms prioritize data security and the protection of sensitive financial information. Many companies that offer outsourced accounting utilize cloud technology platforms that provide the highest levels of security available in the industry. Look for providers with certifications like ISO 27001, multi-factor authentication, and encrypted data transmission.

Can I still have control over my financial decisions?

Yes, outsourced accounting enhances rather than replaces your decision-making. We can get them set up for payment, but ultimately, we want you to decide when your company is making payments. The provider handles the execution and reporting while you maintain full control over approvals, strategic decisions, and financial policies.

Will outsourcing accounting help with tax compliance?

Most outsourced accounting services include tax preparation support and compliance monitoring. However, the level of tax services varies by provider. Some focus on preparation and organization for your CPA, while others provide full tax filing services. Clarify what's included in your service package and whether additional tax services are available.

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