Bookkeeper and Accountant Shortage Solution? Outsourcing

There seems to be a shortage of accountants and bookkeepers. In this day and age of automation, you would think otherwise. What is the solution?

It is getting harder to find quality accountants as most millennials and Gen Z’ers would rather take courses in data science, digital marketing, and information technology.

Most Baby Boomers who are still active in the workforce – people who were born between 1946 and 1964 – are retiring. Companies of all shapes and sizes are now being forced to address staffing to keep their business running smoothly. But, as they scramble to fill in positions in other key departments of their business, many have neglected to fill in their accounting and bookkeeping positions. 

The Bureau of Labor Statistics reports that demand for accounting clerks and bookkeepers will continue to grow. Still, the combination of fewer new accountants and bookkeepers and an aging population contribute to the lack of such professionals to meet the needs of companies. This is especially common for small and medium-sized businesses (SMEs).

Are accountants/ bookkeepers headed for extinction?

Observers blame technological changes for the drop in the growth of employment for accountants. Cloud computing, for example, has automated various jobs that these professionals used to do. This software can perform tasks faster and lessens the need for employees. 

As more routine tasks become computerized, professionals are expected to take on more advisory and analytical roles. For instance, instead of performing manual entries, bookkeepers can focus on analyzing reports.

On the surface, it seems that the need for back-office work will diminish considerably within the next few years. But if you look deeper into the data presented by the BLS, the demand will remain strong. Thus, the bigger problem here may be the shortage in the supply of such professionals. 

This crisis did not happen overnight, though. Businesses with deep pockets have invested in automation and robots to perform routine duties, shrinking many departments. This situation has contributed to the shift in focus among younger people when it comes to the courses they take in school.

However, this option is too expensive for small businesses. They will still need bookkeepers and accountants, and plenty of them. 

The Strategic Finance Magazine conducted a small but interesting study to get a better view of the present bookkeeping staff employed by small businesses and of any plans they might have to use software to replace them. They surveyed 16 US-based companies. While they did automate accounting functions to some extent, none of them believed it would lead to reduced staff. They also had no plans of downsizing. 

Importance of accounting and bookkeeping

So we can understand the relevance of this looming crisis, let us talk about the importance of accounting and bookkeeping services and why businesses cannot survive without them.

1. Improves financial management and analysis

It is easier for your business to perform financial analysis with the help of these professionals. With quality analysis, you can make better business decisions when running your operations. 

2. Enables you to meet tax obligations

Taxes are best handled by professionals. Doing it wrong may lead to heavy fines and, worse, jail time. Accountants can help you fill out tax forms properly and on time.

3. Easily report to investors

You can easily report to investors to assure them that your company is using its money wisely.

4. You will know your true financial standing

Having accounting reports enables you to understand what financial state your business is in. Armed with this knowledge, you will know what adjustments you need to make if any.

What your business can do to make sure your accounting and bookkeeping needs are met

1. Hire part-time employees

If your business cannot afford to hire a full-time internal accountant, you can get a part-time employee. There are many temporary staffing agencies you can approach that can help you fill these positions. 

2. Partner with community colleges and trade schools

You can initiate discussions with community colleges and trade schools that provide accounting or bookkeeping programs. You can gain access to viable candidates by working closely with placement offices or Career Services.

3. Train existing staff

You can provide training for your current staff. However, taking this route may take plenty of time and money.

4. Outsource

Outsourcing is perhaps your best option for businesses. You can look for outsourcing companies that offer accounting and bookkeeping services. It is usually a good fit for most small and medium-sized businesses because outsourcing companies provide top-notch professional services without the high cost of investing in your in-house accounting and bookkeeping team. 

Advantages of outsourcing accounting services

1. It is more cost-effective

This option is more cost-effective than hiring, training, and maintaining in-house staff. Outsourcing frees you from paying for the overhead costs associated with hiring an employee, such as health insurance, paid time off, and retirement. You are also backed by an entire team’s expertise instead of having an internal person.

2. A more proactive approach

Outsourced companies make sure their staff is well-trained and highly skilled to detect any problems in your cash flow and expenditures, for example. It is their job to notify you, which gives you peace of mind knowing professionals are looking after your business. 

3. Reduced fraud

Unfortunately, fraud is a lot more common than you think in many small and medium-sized businesses. Usually, these are companies with a single person at the helm of accounting. Thus, they find it easy to manipulate their books or have fake expenses that go unnoticed for years.

With outsourced accounting services, there are multiple checks and balances. Again, you can have peace of mind knowing that you have increased internal controls.

4. You can focus on other important things

Getting an accounting team from an outsourcing company lets you focus on other things you need to do, like marketing and sales for example.

5. They are better at accounting than you will ever be

This one may sound harsh, but we are talking about professionals here. Even if you are good at accounting, you will not be able to give it the time and attention it needs.

Conclusion

Accounting and bookkeeping practice is vital for determining the correct and unfiltered picture of the organization. Obtaining transparent and correct reports of business accounts helps you make informed business decisions. 

There are many options in the US, as well as international firms that are English speaking and have lower wage rates.  If you are a small to medium sized business or a start-up owner, chances are you are disregarding the value of bookkeeping because you are engrossed in so many tasks that you are doing. It is better to outsource accounting and bookkeeping services to help you achieve financial stability.