5 Signs Your Business Has Outgrown Its In-House Team—and Needs Outsourced Accounting Support

Can you imagine a time when doing your job well could cost you your clients? That happens when:

• You can get so many clients that your in-house team starts to struggle to serve all of them well.
• You serve a client so well that their needs grow too complex for the expertise available in your firm.

What I’m saying is that your workflows, processes, and team members (in numbers and expertise) need to grow as your client demands evolve.

However, hiring local talent (to improve your team) is slower and more expensive today due to the shortage of accounting talent in Western markets, especially the U.S.

Your best move is to hire outsourced accounting support, but how do you time it so well to avoid hiring before the need arises and before things get out of hand, and work quality drops?

These five signs tell when outsourced accounting services should be a key part of your growth strategy.

Why Scalability Matters for Growing Businesses

The limits of an in-house team

Accounting firm owners try to keep their teams lean to prevent hiring and paying more staff than necessary. This requires them to monitor their team’s capacity to identify the moment any team member is overworking.

When done poorly, the team will begin to struggle with delayed reporting cycles, accumulated bank reconciliation work, and employee burnout before the firm owner or manager takes action.

At that point, adding new clients, revenue lines, and responding to growth opportunities is difficult. You can’t scale, and if things stay this way for too long, client dissatisfaction and employee turnover will increase, leading to fewer people taking on more work.

Impact on speed and financial accuracy

Capacity challenges frustrate your team’s ability to deliver timely and accurate work.

When an employee is assigned more work than their time allows, they try to compress time to get it done, which reduces their ability to let their expertise find expression in a financial situation. This results in preventable errors.

Sign 1: Increasing Errors and Missed Deadlines

Early warning signs in financial reporting

Having a well-documented workflow system should reduce errors and missed deadlines, but it can increase when your in-house team doesn’t have the expertise and sufficient human resources to manage your projects.

That should be your first sign to use outsourced accounting services.

“If the people preparing the financials are overworked, or there’s not enough of them, you will have errors.”

Joshua Khavis, Assistant Professor of Accounting, University at Buffalo

Failure to act quickly puts your client’s business at financial and regulatory risk. Business decisions will depend on inaccurate financial records, which could deny clients valuable opportunities.

Example: When Accuracy Slips Under Pressure

An accounting firm (let’s call it ABC Accounting) has a client in the hospitality business. Some of the strategic decisions they made last year (thanks to ABC Accounting’s guidance) have doubled their monthly transaction volume in the two months. But there’s a problem.

This growth has become too much for the accountant managing ABC Accounting (along with nine other clients). He can no longer keep up with the workload.

Under so much pressure, he has delayed vendor payments for the last four weeks in a row, which has damaged relationships. Month-end reports have also been delayed by at least 11 business days for two months, leaving the client to make decisions without the right insights.

By hiring outsourced accountants, ABC Accounting will be able to reallocate tasks for everyone to handle the number and complexity of tasks they can complete without feeling overwhelmed or unqualified.

Sign 2: Overworked and Burnt-Out Finance Teams

Capacity issues in CPA firms

With CPA registration declining, it is getting more difficult for firms to find qualified accountants to fill their vacancies. Since most firms are still realizing the benefits of outsourced accounting services,   many of their senior accountants are performing low-value tasks.

Worse still, many firm owners cannot afford to let their staff go on leave (according to the 2024 Sorbet PRO Report), and when someone falls ill, their work is assigned to team members who are already overworking.

When peak seasons (such as tax season or year-end closing) come around, the pressure intensifies, leading many accountants to work longer hours, eat poorly, and sacrifice important family occasions.

In some other firms, the shortage of CPA-level accountants forces junior staff to take on specialized tasks (like mergers, international tax, and complex financial modeling), which forces them to overexert themselves.

How burnout affects productivity and morale

Burnout is the root of several accounting challenges in  firms, including:

• Absentmindedness: Overworked employees lack the thoroughness required to maintain accurate financial records, analyze financial data precisely, and deliver financial reports that meet applicable standards. 

Usually, an endless loop of revisions and rework follows, which increases the risk of missing compliance deadlines.

• Employee turnover: A burnt-out team member is disengaged and lacks job satisfaction. Before long, they’d desire to pursue new challenges.

Outsourced providers have the expertise, technology, and sufficient talent to absorb workload spikes and reduce the pressure on your internal staff.

Sign 3: Delays in Strategic Financial Insights

Businesses are increasingly demanding that their accountants go beyond what happened in their finances to tell them why it happened and how to move forward.

Here’s why it matters.

When advisory support lags

The timeliness of financial insights is just as important as the insights themselves. What difference does a financial insight make when the client can no longer use it to take advantage of market opportunities?

When your team struggles to provide timely financial insights to clients, it is usually down to two things:

• They are too busy with routine, low-level compliance work.
• It lacks the expertise to provide insights like profitability trends and cash flow forecasts.

In any case, you need outsourcing support to free up time and make more accounting expertise available for such services.

Impact on decision-making

The inability to meet your clients’ strategic demands denies them the data to make strategic decisions confidently.

For example, businesses need timely forecasts and market trend analyses to understand the time to launch new product lines and manage inventory profitably. They also need to understand the products and services driving their profits to allocate resources more confidently.

While you can delegate routine, process-heavy tasks to outsourced accounting companies to free up in-house capacity for client advisory services, you can also hire outsourced CFOs to deliver such services to your clients.

Sign 4: Technology and Process Gaps

There’s been more advancement in technology in the last decade than there was in the previous five.

If you’re noticing gaps in your technology and process, address them now or risk inefficiencies that will prevent your team from doing their best work.

The limitations of legacy systems

Tools and systems, no matter how great, are only as effective as their ability to evolve with your workflows. Unfortunately, many in-house teams rely on outdated and unscalable computer programs.

For example, spreadsheets can be useful when you’re just starting your firm, but after adding a few clients and team members, they’ll begin to require too much time and manual work to maintain.

This creates bottlenecks in your project management process and increases the risks of human errors, which can negatively impact financial reporting.

The need for cloud-based remote accounting services

Not long ago, clients needed to drop off documents in their accountant’s office.

Today, there are document-sharing software and client portal solutions that have made it easier, faster, and more secure. Even better, team members can access these files along with other work resources anytime and from wherever they are in the world.

Similarly, there was a time when accountants needed to physically meet with their clients to discuss financial data and provide growth strategies. Today, Zoom, Google Meet, and other video conferencing tools have enabled accounting firms and clients to meet at any time and from opposite ends of the world, making client engagement faster and more convenient.

This has not only streamlined accounting service delivery, but it has also enabled accounting firms to tap into a global pool of accounting experts who can enhance their digital transformation drive.

Outsourced accounting services can help your in-house team with the training, infrastructure, and processes needed to use cloud accounting services effectively.

Real world example:

Finsmart Accounting has empowered over 300+ accounting firms and businesses with technology-driven accounting solutions that solved their capacity and cloud accounting challenges.

Its workflow set-up and optimization service provides experts who will help to structure your workflows and processes to improve firm-wide visibility and efficiency.

Sign 5: Business Growth Outpacing Financial Support

When you notice any of the following signs in your in-house team, it might soon be unable to keep up with work demands.

Signs your finance team can’t keep up

• Overwhelmed by Volume: When the volume of transactions (arising from new revenue streams, expanded operations, etc.) in a client’s business starts to overwhelm the team members managing that client, address the capacity challenge before exhaustion, burnout, and errors set in.

• Inability to Support Expansion: International expansion introduces complex financial reporting requirements that might not be available in your in-house team.

Whether it’s SWOT analysis, multi-currency accounting, or local tax compliance, outsourced accounting support is the quickest way to keep your services relevant to growing clients.

• Lack of Strategic Input: As your client’s business grows, the greater and more complex the financial support they need will be. Bank reconciliation, QuickBooks Cleanup, and other day-to-day tasks will not suffice anymore.

You’ll be required to make more room for high-level financial planning (such as budgeting for expansion or analyzing investment returns) to enable your clients to capitalize on growth opportunities.

When to consider an outsourced financial controller

• When complex financial needs arise: When a client begins to request services (such as capital structure planning or cash flow forecasting), an outsourced controller can optimize cash flows to fund revenue increases.

When You Need to Cut Costs: An in-house financial controller in the U.S costs $10,000 a month. An outsourced financial controller costs up to $5,000 less.

Seeing as the cost does affect the quality of service rendered, hiring an outsourced financial controller is the most cost-effective decision.

• When You Need Flexibility: Outsourcing makes scaling accounting services (including the controller role) a breeze.

Outsourced financial controllers do not require long-term contracts. You can use them to address a one-time client need or put them on retainer to provide ongoing service.

The Hidden Cost of Delaying Outsourced Support

If you’ve noticed any of the above signs in your in-house team, the best time to address them was the first time you identified them. The next best time is today.

Any minute it drags on will accumulate the effects, which include:

Financial risks and missed opportunities

Costly Errors: Overburdened in-house teams are prone to mistakes in bookkeeping, tax filings, or financial reporting.

This is not only a risk to your clients who will have to work with the wrong picture of their business, but it also denies you the opportunity to deliver the scale of service you need to keep your clients happy and grow.

Loss of Revenue: Your team will also be leaving money on the table if they can’t complete enough work to keep all clients satisfied.

Operational setbacks

Delaying outsourced support creates unnecessary operational challenges, including a lack of productivity, employee turnover, and inability to scale.

When these challenges come up, you’re no longer building a firm; you’re merely reacting to the most pressing, most urgent workflow challenge.

What To Do Next: Transitioning to Outsourced Accounting

Once you have identified the signs of your need for outsourced accounting services, it’s time to get to the work of articulating your unique needs and choosing the right service provider. After all, your choice of an outsourced service provider will determine your outsourcing experience.

Evaluating Your Needs and Options

Outsourcing works best when you clearly understand where you need help and to what extent that help is needed.

Here are the steps you need to evaluate your needs effectively:

• Assess Current Challenges: The signs you have noticed in your firm can show you the specific services you need to outsource. You wouldn’t want to outsource the services or tasks your in-house team is better at handling, and this differs from firm to firm.
• Define Scope of Services: This is where you determine the type of service you need and for how long you want the outsourcing engagement to go on.

Most firms start their outsourced accounting relationship with low-level, process-heavy services before requesting more complex, advisory support down the road.

• Set Your Budget: How much can you afford to spend on the outsourced service? Outsourcing is generally more affordable (especially compared with full-time staff), but prices still vary from firm to firm, country to country. While setting your budget, strike a balance between cost saving and depth of expertise.
• Choose an Outsourcing Model: You can use either the embedded or shared outsourcing models. The former gives you a dedicated accountant while the latter allows you to share third-party accountants with other firms like yours.

Choosing The Right Outsourced Accounting Services Provider (Why Finsmart is Top of the List for Most Firms)

The right outsourcing partner wouldn’t disrupt, but rather align with your workflows and processes in a way that feels like you merely hired a new employee.

To get that kind of alignment, choose an outsourcing provider that has:

• Relevant Industry Experience: If your client is in the manufacturing industry, an outsourcing provider with supply chain expertise will be most suitable.
• Scalability: To be sure your outsourcing provider can grow with you, ask about their requirements for adding more staff.

Providers like Finsmart Accounting allow you to start with one professional and add as many as your workload requires.

• Transparent pricing: Transparent pricing will ensure you understand exactly what you need to pay (monthly or hourly) for the services you are outsourcing. This helps you prevent hidden fees in your contract.

For example:

Finsmart Accounting’s prices are clearly stated on the website to prevent pricing ambiguity:

• Bookkeeping Seat: $2600/month (or $25/hour)
• Sr. Accounting Seat: $3200/month (or $25/hour)
• Reviewer Seat: $3600/month (or $30/hour
• USA Tax Seat: $3200/month
• Cleanup Seat: $25/hour
• Workflow Seat:
  • Workflow Customization: $2499/month (4 Weeks)
  • Workflow Customization + Practice Management Software: $5000/month (8 Weeks)

• A modern tech stack: every Outsourced accounting service provider of worth will be proficient in advanced accounting software (such as QuickBooks Online, Xero, SAP, NetSuite, Dext, Bill, Financial Cents, Drake, and Lacerte).

Finsmart Accounting uses a smart and tech-savvy team to deliver client-centric solutions that improve efficiency, streamline financial operations, and drive sustainable growth.

• Robust data security standards: This ensures your outsourcing partner’s data security practices are strong enough to protect your clients’ financial information. Encryption technology, virtual desktop infrastructure (VDI), and compliance with security standards (like ISO 27001, SOC 2, and HIPAA) are critical.

Finsmart Accounting runs its outsourced accounting services on secure IT infrastructure, encrypted communication, and strict access controls that ensure data integrity. Our data security protocols and compliance with global data security standards have enabled us to maintain an average client retention of 9 years since 2007.

Would you like to discuss your outsourced accounting needs? Our outsourcing expert is ready to speak with you. Click here to book a Free Consultation today.