Cost Savings & Scalability: Outsourced Accounting for Leveraged Growth (Sponsored Content)

Bryan Foster: Outsourced accounting adds a third-party layer of control.

In an increasingly volatile economic landscape characterized by rising inflation and business costs, and looming recession talks, companies of all sizes seek strategies to navigate these challenges and maintain their financial health. One approach that has gained significant traction globally is outsourcing accounting and financial consulting needs.

This strategy, according to Bryan Foster, a certified public accountant and shareholder at KPM CPAs & Advisors, offers cost savings and expert insights that can be invaluable – especially in uncertain times.

“With any project, no matter the due diligence and research, you can hire a professional to accomplish something in half the time it might take someone with less experience,” Foster says. “Our team at KPM provides clients with experience and education that takes years to accumulate. Instead of digging to figure out new regulations or compliance nuances, answers are at our client’s fingertips when working with our team.”

According to Business Wire, accounting outsourcing services in 2020 was a $37.9 billion global industry, with projections of reaching $53.4 billion by 2026. Foster says he is not surprised by such volume, especially considering, locally, nearly half of Springfield Business Journal readers responded that employee wages are the largest driving cost of doing business in the 2023 Economic Growth Survey. Despite that, over 48% of respondents say they are looking to increase their employees, and therefore payroll, in the coming year. Depending on a company’s structure, Foster recommends turning to an accounting firm as a cost-savings measure.

“Once you find that perfect candidate,” Foster says, “you then have to meet the salary, plus benefits, payroll taxes, training expenses and overhead outlays, which can drive the cost of that employee another 50% or more. We see ourselves as an extension of our clients’ businesses to carry out these accounting functions and help them manage their companies.”

The cost savings go beyond employee wages, Foster adds. Working with accounting firms also saves on accounting software costs, which can be cost-prohibitive for smaller operations. By leveraging the software and expertise of accounting firms, Foster says companies can save on software expenses while staying in control through real-time access to cloud-based platforms for efficient financial processing. In this scenario, businesses receive regular touches and consultations from their accounting professionals, Foster says – a uniquely different approach than only using a CPA for tax filings.

“We can ask questions and help steer clients in a different direction, serving as a financial adviser,” he says, through communication throughout the week, month and quarter.

With 46.6% of survey responders saying they’d like to expand to new markets, Foster says ongoing interactions with accountants allow financial professionals to identify potential financial pitfalls and opportunities – and to guide businesses toward optimal strategies.

In addition to the cost-savings benefits, Foster says outsourcing provides stability and continuity, particularly for smaller businesses with limited accounting resources. In-house teams, Foster says, often comprise a few individuals, who face challenges when key personnel retire or change employers, potentially leaving critical tasks unattended and introducing the risk of fraud.

“By outsourcing some accounting, you add an extra layer of internal control by having a third party looking out for you and keeping control,” he says.

Foster adds that accounting firms, like KPM, often collaborate with professionals from various industries, including lawyers, bankers and insurance brokers.

“We develop those relationships, and it certainly benefits everyone, which translates to cost savings,” he says, adding it also frees up time for the clients to focus on what they do best and generate revenue.

“That’s so satisfying, as an accountant, to grow with them,” he says.

This content is brought to you by KPM CPAs & Advisors.