The Case for Outsourcing Your Accounting Function
Written by Chris Gallagher, CPA | Client Accounting Services Director, EHTC
Most businesses don’t realize their accounting function is a problem until something stressful happens, such as an audit, a bank request, a buyer doing due diligence, or simply trying to understand why cash is tight. Simultaneously, in many closely held businesses, your accounting department has one person, one laptop, and a growing stack of reconciliations that never quite seem to get finished timely.
For some business owners, you may be doing your best to maintain the accounting when in fact, your time and energy are better served being strategic, partnering, hiring, sourcing, managing risk. This arrangement may sometimes work well enough early on, but over time the limitations of that setup tend to surface and cost the business long-term.
Common Signs Your Accounting Function Has Outgrown Its Setup:
The month-end close drifts further into the next month
Financial statements are prepared but rarely discussed
Cash surprises happen despite strong revenue
Key reports require manual spreadsheets every month
Important financial knowledge lives with one employee
EHTC’s Client Accounting Services (CAS) practice is a response to those limitations. Our outsourced accounting offering takes responsibility for your business’ accounting function: transaction processing, month-end close, financial statement preparation, and even controller-level oversight and advisory support.
Let’s examine what drives businesses toward outsourced accounting solutions, what can be gained, and what to consider when evaluating whether it’s the right fit.
A Shifting Talent Landscape
The pipeline that once produced traditional in-house bookkeepers has narrowed considerably. Public accounting attracts a growing share of accounting talent, meaning fewer professionals are pursuing the kind of hands-on, transactional bookkeeping roles that a lower middle market business typically needs.
This creates two problems for business owners. First, reliable in-house accounting support can be a rare find. Second, when you do find someone, that person may lack fluency in the modern accounting software and automation tools a well-run back office requires.
CAS is positioned to fill the gap. Because EHTC serves multiple clients using similar systems and processes, we build technical expertise that is difficult for a single employee to match. That kind of depth is made available without the cost of individual hiring or software investment.
Controller-Level Oversight Without the Full-Time Cost
You might think a closely held business doesn’t need a controller or CFO on staff, with the role seeming like an expense reserved for larger organizations. In practice, however, businesses of this size often see tangible benefits to accessing that level of talent.
A controller sits above the day-to-day accounting work and reviews the financials analytically: examining margin trends, benchmarking payroll and overhead, and identifying cash flow issues before they become operational ones, as a few examples. For a business owner making regular decisions about hiring, pricing, or capital investment, that kind of review changes the quality of the information you’re working with.
A CAS engagement provides controller-level oversight as part of a monthly service, with proper segregation of duties built in. It all happens at a fraction of what an internal leadership hire or full accounting team would cost.
Accounting Functions That Hold Up When It Matters
Think of your accounting function as the panels in an airplane flight deck. Like a pilot trusts well-maintained instruments, a sound accounting function ensures data is trustworthy and accurate for your business to base decisions from.
In piloting, signals regarding altitude, speed, fuel levels, and direction are what keep an aircraft on course. A pilot can technically fly without perfect gauges, but the farther the flight goes, the riskier even small navigational errors become.
In my experience, financial reporting and accounting processes work the same way. Proactively building a strong accounting structure and reporting framework is fundamental for navigating your business. You will see the return on this investment.
Secondly, when a business changes hands, takes on a new investor, or prepares for a transaction, the first thing that gets scrutinized is the financials. If the data isn't clean, if the processes are inconsistent, or transactions cannot be explained, those issues erode trust and business value dramatically. I’ve seen deals slow down or lose value entirely because the accounting records weren’t structured in a way that held up to outside review.
A structured CAS engagement begins with discovery, where we walk through and document your current accounting procedures, evaluate internal controls, and identify where the vulnerabilities are. From there, we implement and automate, clean up financial statements, streamline your month-end close, and connecting your banking, accounts payable, and credit card transactions to reduce manual entry and the errors that come with it.
For businesses that have recently changed hands or are preparing for a future transaction, this kind of foundational work is often the most valuable component of CAS.
From Recordkeeping to Decision-Making
One pattern I’ve seen repeatedly is that with many closely held businesses, financial statements are produced primarily for tax compliance. They get reviewed once a year and rarely inform day-to-day operating decisions. Internal staff may be focused on getting transactions recorded while ownership is busy running the business.
A CAS team working on a monthly close cycle is positioned to do more than produce accurate statements. Because the same people are reviewing the financials on a recurring basis, we develop familiarity with what “normal” looks like and can make observations that turn a financial statement from a report into a management tool.
Once financial statements are trustworthy and insightful, businesses often look to level up their management tools. Financial planning and analysis (FP&A) can be the key to unlocking your business’ full potential. Such tools include cash flow projections, annual budgeting, scenario forecasting, capital budgets, key performance indicators, gross margin by item/services/locations, and more. CAS will work closely with the key decision makers of the business to help establish these tools.
Frequently Asked Questions
Business owners who are considering outsourcing their accounting function tend to have a few recurring hesitations. Let’s address each of them.
-
Remote access to accounting systems raises reasonable questions. EHTC has invested rigorously in the tools and procedures required to maintain secure remote access and defined access controls. We’re happy to walk you through exactly how we protect your data.
-
It’s a fair concern. Business owners often worry that an outside team won’t really understand how their company operates. Perhaps such concern is based on prior experience working with CPA firms who are primarily focused on tax compliance and rushed annual review of the financial details.
In practice, structured CAS engagements like ours tend to build that familiarity quickly because we’re working inside the accounting system every month and seeing the financial story develop over time. This is what differentiates us.
-
Outsourced accounting can be but isn’t always the lowest-cost option on paper, and we don’t position it as one. What we do offer is a clearly defined scope of work based on your specific accounting needs, a recurring fixed monthly fee or short-term consulting arrangement, and a team that is invested in understanding your business and adding value beyond the close.
For EHTC, the more useful question isn’t whether outsourcing is cheaper than internal staffing, but rather, “What am I getting for the cost?” We believe that financial clarity, proactive financial planning and analysis, and access to the broader advisory expertise of a full-service firm are worth the investment, and that it’s crucial for us to deliver on that every month.
A Partner that Grows with You
Some of the most rewarding client relationships in our CAS practice started with basic bookkeeping. Over time, with developed trust and business growth, those engagements naturally evolved to include higher-value services including financial planning, budgeting, forecasting, and support for strategic decisions.
Because we’re a full-service CPA and advisory firm, that progression also opens access to adjacent services, including tax planning, assurance, and transaction advisory, through a team that already has working knowledge of your business. Our integrated approach has practical advantages over maintaining separate relationships for separate services.
Ready to take a closer look at your accounting function? You can start the conversation with EHTC’s Client Accounting Services team below.
About the Author
Chris Gallagher, CPA, Client Accounting Services Director, leads EHTC clients through the various stages of financial literacy and accounting process improvements necessary for managing businesses through risk, uncertainty or growth. Prior to joining EHTC, he held various management-level positions for five years in corporate finance roles including Controller, Director, and VP of Finance. Before that, he spent half a decade in public accounting and achieved the role of Assurance Manager, leading financial statement audits of public and private companies within manufacturing and insurance sectors. He leverages his well-rounded expertise and dynamic focus with closely held and lower middle market businesses.
Whether he’s supporting a startup with its first accounting system, stepping in to clean up an accounting nightmare, consulting for a business owner eager for better financial tools and data, or advising an established company through an executive transition, Chris brings a high level of insight and strategy to every engagement.
To connect with Chris, reach out at chris.gallagher@ehtc.com.
