Outsourcing by Small Business

Understanding what services our small business clients need is probably second nature to most CPAs in public practice. For our clients though, understanding what functions should be outsourced – and who they should outsource to, may be difficult.

I happened onto a study by a US-based consulting firm – WASP BARCODE – who identified the accounting function and professional staffing as a key indicator to help target their services. While their target group was companies with from 11 to 100 staff – in other words a little larger than many of our smallest clients – it provides good context to guide our smaller clients.

So clearly companies with more than 10 employees begin to consider a part-time controller. By the time they reach 50 employees, about half will have a full-time controller or CFO. What’s more the study went on to look at the kinds of services they continued to outsource as they grew…

Interestingly, tax preparation and planning is outsourced by most companies – regardless of size. Also payroll is very often outsourced. There are many competent payroll services and while payroll is important, it is much easier to outsource than human resources which are typically seen as ‘mission critical’ by growing companies.