6 Types of Outsourced Accounting Services to Streamline Your Business Finances

Outsourced accounting services can save time, minimize errors, and reduce risks. But the dizzying array of solutions available may leave you confused. Do you need a bookkeeper or an outsourced chief financial officer (CFO)? The decision comes down to how much you want to outsource, but how do you decide that? 

To help you escape this dilemma, we have a handy guide on the six different types of outsourced accounting services and their offerings.

1. Bookkeeping

External accounting experts can help you manage your day-to-day financial functions and maintain accurate books. Additionally, they can provide comprehensive reports to optimize financial data visibility and decision-making processes. Other services commonly offered under outsourced bookkeeping include:

• Employee expense processing
• Balancing ledgers
• Multi-entity and multi-currency consolidation
• Credit card purchase transactions
• Bank/credit card reconciliations
• Merchant account reconciliations
• Recording and categorizing payments and expenses
• Time and expense management
• Payroll journal entry
• Invoice processing and payments
• Customer invoicing
•  Deposit posting 

2. Financial planning and analysis (FP&A)

This outsourced accounting service entails conducting in-depth analyses of the organization’s financial data to facilitate informed, future-focused decisions. An outsourced FP&A service can also take care of some or all of the following tasks:

• Budgeting
• Financial forecasting
• Revenue and cash flow projections
• Strategic planning
• Scenario planning

3. Payroll management

In addition to running payroll, outsourced accounting service providers typically help with processing and paying out direct deposits, tax reporting, regulatory compliance, and unemployment claims. Other outsourced payroll responsibilities can include:

• Payroll account setup
• Payment method setup
• Tracking working hours
• Salary computation
• Delivering pay
• Withholding payroll taxes, income taxes, and garnished wages
• Managing employee deductions
• Remitting payroll taxes
• Ensuring regulatory compliance

4. Controller services

Outsourced controller services provide strategic guidance and management to businesses along with accurate and timely financial reporting and insights. Some of the specific responsibilities offered by outsourced controller services include:

• Budgeting and forecasting
• Financial reporting
• Cash flow management and projections
• Accounting documentation
• Management of accounting and bookkeeping processes
• Job costing and inventory tracking
• Key metric benchmarking
• Reporting and oversight of month-end closings
• Audit preparation and advisory service
• Establishing internal controls
• Developing KPIs 
• Monitoring spending 

5. Outsourced CFO Services

Outsourced CFO services can help you access the expertise and leadership you need for growth and viability. These professionals can assist you with the following:

• Cash management
• Budget analysis
• M&A advisory
• Succession planning
• Financial analysis and modeling
• Cash flow optimization

6. Tax preparation and filing

Outsourced tax services entail processing and managing the preparation and filing of tax documents. Some specialized external companies also provide a full spectrum of potential compliance needs, from corporate tax compliance and reporting to tax controversy and audit support.

Standard outsourced tax preparation service offerings include:

• Tax liability calculation
• Franchise tax support
• Tax validation
• Tax planning
• Returns preparation
• Form and certificate management
• Payroll tax collection, filing, and payment
•  Tax penalty abatement 

The final word

When outsourcing accounting tasks, it’s crucial to consider the types of services you want to delegate to an external company, what level of involvement you wish to have, and how your business needs will change in the next few years. Use the above guide to understand the various accounting services available and how they can enhance your finance operations.

Want to know more about startups and what it takes to get started? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today. 

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.