Some CPA firms opt to handle all of their own bookkeeping and accounting requirements, instead of outsourcing it. While this may work for some companies, the majority of successful accounting firms find that outsourcing helps them alleviate some of their workload (which can be intense, particularly at certain times of the year), while also reducing the risk of errors and internal fraud, among others.

Outsourcing CPA work – whether it be bookkeeping, accounting or payroll, for example – helps busy accountants avoid a whole host of potential risks, and here are 7 of the ways in which it can do this:

1. By giving them access to the latest technology

Because they tend to stay abreast of new technologies and industry trends, outsourced bookkeeping and accounting providers can help CPAs benefit from the very best innovations in the industry, without having them to invest in it, or test it out themselves. And typically, the latest technology will be hyper-secure, further reducing the risk of fraud.

2. By reducing employee errors

Human error is always a risk, but outsourcing bookkeeping enables the workload to be spread among a team of professionals who aren’t as overworked as your in-house CPAs may be, and who have a series of in-built checking systems to guarantee no mistakes are made, and that deadlines are always met.

3. By eliminating penalties for non-compliance

Non-compliance is a very real risk for overworked CPAs who don’t have the time to keep themselves up-to-date with the ever changing rules and regulations associated with the accounting industry. You can avoid penalties and fines for non-compliance by outsourcing to an experienced third party.

4. By keeping their financial reports updated

Many businesses who don’t outsource any of their bookkeeping responsibilities, find themselves struggling to generate accurate financial reports. This can lead to shortages in cashflow, and make it hard to determine whether the company is even in profit. Outsourcing leaves you with accurate information, when you need it, and puts your company in a better position financially.

5. By eliminating cashflow concerns 

As touched upon in the point above, a lack of accurate financial data can lead to cashflow problems, but outsourcing your accounting, can help you improve upon your cashflow with regular monitoring of cashflow statements, and strategies for pre-empting cashflow concerns.

6. By measuring and tracking client profitability

Outsourcing some of your accounting requirements gives you more opportunities to see which of your clients is making your business money, and which ones are not. You can then formulate a strategy to combat this, which may include letting some clients go, or offering restructured prices.

7. By staying up-to-date with accounts receivables

The minute your bookkeepers and accountants become overburdened (which happens a lot, especially in light of the ongoing shortage of skilled accounting professionals throughout the country), accounts receivable is likely to get overlooked. But if this happens too often, or for too long, your cashflow is almost certainly going to be impacted. Outsourcing can ensure you have the cash you need, when you need it.

If you haven’t yet experimented with outsourced bookkeeping for CPAs, and would like to reduce risks within your company, now could be as good a time as any to give it a go.