5 Things to Consider When Looking for an Outsourced Finance and Accounting Partner

Written by Aaron Spool, Managing Director

By Aaron Spool

As a former corporate finance executive and current partner of an on-demand CFO services provider, I have experienced the search for good finance, accounting, and operations support from both sides of the table. Choosing the right finance and accounting staff solution for your business is a matter of balancing your immediate needs and future plans with your resources. In the following article I discuss ways business leaders can determine between choosing an external partner or building an internal team. The questions and analysis work not only for accounting and finance, but any human resource need.

Is an on-demand solution right for you?

If your business requires both high touch and high frequency of interaction, where you expect concentrated attention for extended periods of time, an on-demand solution won’t work. In other words, if you want someone to work for you for 40 hours a week for the next year, hire a full-time employee.

However, if you are open to alternatives and focus on outcomes, there are huge opportunities to find and utilize external, on-demand resources. You just need to determine what kind of solution will work best for your needs. To understand your needs, you need to 1) know what you are trying to solve for, and 2) align your talent to solve that problem

  • What are you trying to solve? What tasks do you want undertaken? Are they one-time projects like cleaning up your accounts, getting help with a capital raise, or a first-time audit? Are they ongoing – such as preparing SEC filings, closing out monthly or quarterly books, or budgeting, forecasting, and reporting?
  • As for talent, you need to align staff with the problem your solving. Does your current staff meet your business needs today? Into the future? Do you need leadership, like a CFO, who will own the process for you?

Where is the company in its growth trajectory?

I’ve written a 4-part series on the different needs for the accounting and finance role at different stages of growth. You can find details on Early-stage, Series-A, Late-stage Private, and Pre-IPO/public companies in each article. Each stage of growth requires certain skillsets and personnel. On-demand solutions are extremely flexible and can adapt for any stage.

From creating plans to reach significant strategic milestones to implementing a new ERP system, or reviewing growth plans, there are many engagements well-suited for outsourcing to an external vendor. Whether a project-oriented or longer-term engagement makes sense will depend on where your firm is in its lifecycle.

Are your needs Operational or Strategic? Are there industry specific issues?

Your finance and accounting operations collect the data and information needed for reporting, analysis, and decision making. The difference between operational and strategic is the difference between managing the close process vs. fixing the close process – establishing systems, timing, quality assurance, and architecting the process from a forward-looking perspective. Financial strategy can also encompass a wide array of services from capital planning to financial modeling of cashflows to IPO planning. Prioritizing these needs can help determine how an outsourced solution can best support you. The better you know what you are looking for – the better the results will be.

Engage any prospective outsourcing partner in discussions about your requirements. The outside perspective can suggest what you might need, and it is a big part of the relationship building process. The experts at Eventus have been doing this for a long time and have seen many firms in similar situations. We have helped them overcome the challenges they were trying to surmount.

Sometimes industry specific knowledge trumps general accounting and finance skills. If your business operates in a unique industry, can the differences be quickly learned by a finance and accounting generalist? Crypto is one example that comes to mind. The current environment for managing the accounting of crypto is highly fluid. Experience and expertise in crypto are difficult to find but needed if that is your business.

Costs vs. Value

As always, when looking for vendors, shop around – but avoid shopping on price alone. Many factors will go into the pricing of an outsourced solution – from actual tasks to the alternatives for a more strategic approach to the problem. Often an outsourcing partner will identify issues you didn’t know were issues but need to be addressed.

When thinking about costs consider the entire team. What would it cost to build out or replace the entire team you need to do the job – both the tasks and the strategic management of the finance function? If you hire in-house, is there enough work for them to do to justify the comprehensive full-time employee cost – taxes, benefits, salary, bonus, etc.

Is the expense based on a single function, a CFO, controller, or accountant – or will you need three roles to meet your needs? You may need a CFO role 5% of the time, controller 20%, and accountant 40%. Can you fill this need with one person? If current staff can do part of the job – but what about the other aspects?

When analyzing costs, focus on the entirety of the needed team. An outsourced solution should save you 30-50% compared to hiring in-house full-time. The savings come with the added benefits of greater flexibility and more experienced professionals.

The Relationship Matters

With an outsourced solution, you need to have confidence not only in the manager doing the work, but also the entire firm. It is a strategic vendor relationship that, when successful, will make your firm better operationally, strategically, and profitably.

The outsourced manager will be a member of your team and a part of your leadership. You want to get to know them and trust them – like you would an employee. This will help you get the most out of the relationship with the partner.

With the leaders or owners of the firm get to know them as you would any trusted advisor. They are there to add value to your business, as well as accommodate new requests, changes to the team, or address shortfalls in expectations.

Eventus can help

The choice of an on-demand finance and accounting partner is a strategic decision for your firm. Bringing in the expertise and experience of an outside team of advisors who can both guide and execute can accelerate the growth of your firm, or provide a path to improved performance, or address whatever specific challenges you might be facing.

Eventus has deep expertise across the spectrum of finance and accounting roles from CFO to accountant to SEC manager, with industry experience from the unique like aquaculture to biotech, and everything in between. No matter what stage your firm’s growth or its size Eventus has worked with firms in a similar place. That experience and expertise is the value that Eventus brings to every client engagement helping them solve their business challenges and meet the goals of their business.

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