Accounting and Financial Outsourcing

Article Dean Dorton

If you asked me to count the number of articles written about artificial intelligence (AI) in accounting, I would probably outsource that job. Features like enhanced data accuracy, efficiencies gained through automation, real-time financial reporting, and advanced predictive analytics (to name a few) are buzzwords slung around like mud at a presidential debate. And for good reason! These features have tremendous value and Dean Dorton’s outsourced accounting team is implementing these functions across numerous clients.

However, all these features often leave me pondering what’s coming with the next evolution of AI. Below are my predictions on what the future holds for AI within the world of accounting:

1. AI-Driven Predictive Compliance

Picture an AI application so forward-thinking that it predicts compliance changes better than your weather app predicts the weather. AI systems in the future could predict upcoming regulatory changes by analyzing trends in global financial governance.

2. Enhanced Custom Financial Modeling

Imagine an AI that knows your business, your history, your industry, and your goals. That same AI could create sophisticated financial models tailored to specific industries and individual businesses. This would provide businesses with invaluable insights for strategic planning and decision-making.

3. Intelligent Cash Flow Management

AI may take over the world, but cash will always be king.  AI could offer advanced cash flow management services, predicting future cash flow scenarios with high accuracy. These predictions would be based on a comprehensive analysis of historical data, market trends, and economic indicators, allowing businesses to optimize their investment and operational decisions.

4. Automated Real-Time Auditing

Imagine an auditor who never left. Wait, that came out wrong. Imagine an audit process that was autonomous, automated, and relevant. This would represent a shift from periodic audits to an ongoing process, dramatically increasing transparency and enabling immediate identification and resolution of discrepancies.

5. Advanced Fraud Detection with Predictive Analysis

Cue Tom Cruise’s Minority Report. AI systems could become more adept at not only detecting but also predicting potential fraud. Precognition anyone? By analyzing patterns and anomalies over vast datasets, these systems could identify potential risks before they materialize, enhancing financial security.

6. Continual Risk Assessment Tools

As a CPA, I’ve never understood why risk assessment is only an annual process. AI could fix that. AI could provide risk assessment tools that continuously update in response to changing market conditions, business activities, and external events. This would allow businesses to have a real-time understanding of their risk exposure and make informed decisions to mitigate potential risks.

7. Interactive Financial Dashboards with Predictive Insights

The term dashboard is overused and associated with stale data, or data errors. Imagine interactive AI-powered dashboards that not only display financial metrics in real-time but also provide predictive insights and recommendations. These dashboards could become an integral tool for CFOs and decision-makers, offering a futuristic view of the company’s financial health and trajectory.

These future enhancements promise a world where AI not only simplifies and streamlines financial processes but also provides deep, actionable insights, transforming the way businesses plan, operate, and grow. As AI technology continues to evolve, its integration into outsourced accounting services is poised to offer unprecedented levels of efficiency, security, and strategic value.

Dean Dorton’s outsourced accounting services team is passionate about finding the right tools to fit your business. Contact us if you would like to learn more about our services or where AI might benefit your organization.

Justin currently leads Dean Dorton’s Accounting and Financial Outsourcing (AFO) group, providing outsourced accounting and business consulting services to clients throughout the country in a variety of industries.

Article Dean Dorton

Our last piece explored why companies would rather send random children to Disney World than prepare an annual budget. Today, we are going to discuss three reasons you should embrace budgeting with a smile. 

1. Budgeting: Know Thyself!

Jacob Lew,

The budget is not just a collection of numbers, but an expression of our values and aspirations.

A budget process helps an organization identify and orient itself around its core values, a financial true north if you will. At the onset of the journey you ask, what are we trying to accomplish this period? At decision points along the path, you ask if each decision will help move the organization toward its goals. As you go forward and acclimate to the journey, an organization can use the budget to assess the appropriateness of its goals and reassess.  

2. Resource Allocation: Project the Future

Peter Drucker,

The best way to predict the future is to create it.

Step one offered direction. Step two is to identify the resources needed to follow that direction. Do not leave the future of your organization to chance. Point your resources towards your goal. Build a plan on how additional resources will be obtained. Own the future! 

3. The Horizon: Playing the Long Game

Warren Buffett,

Someone’s sitting in the shade today because someone planted a tree a long time ago.

The most successful organizations I work with are typically the most enduring. They play the long game. The operating system of these organizations is designed to pursue bold long-term goals. They establish quarterly goals that feed into annual goals which feed into decade-long goals. They line up priorities like dominoes. A key component of this mentality is a budget. Most of these organizations have some form of multi-year budget. Some organizations have highly detailed budgets while some prepare what I would call a “gist’ of a budget. Regardless, there is thought put into a plan. A plan is documented. That document becomes a tool that can be used, sharpened, and improved upon over time.  

Do any of these reasons for building a budget resonate with your organization? Have you tried budgeting only to become frustrated by the process? Do you need a coach to help you walk through the process? Do you need a gentle nudge to take that first step? Whatever the case may be, our team at Dean Dorton can help. 

Justin currently leads Dean Dorton’s Accounting and Financial Outsourcing (AFO) group, providing outsourced accounting and business consulting services to clients throughout the country in a variety of industries.

Article Dean Dorton

Most organizations I deal with do not enjoy the budgeting process…

Correction: most organizations I deal with hate the budgeting process. They spend two months suffering through the budgeting process and 10 months dreading the next budgeting process.

Have we ever thought about why? 

This is the first part of a series designed to explore the ins and outs of the budget process. There is no better place to start than with the squirmy dread that the budget process often triggers. 

So why do organizations hate budgeting? What causes seasoned executives to whimper in fear and the most balanced of accountants to break an excessive amount of lead from their mechanical pencils? Here are five realities that need to be checked when entering a budget process: 

1. The Uncertainty Circus

Many budgeters feel like budgeting is akin to building a horoscope with organizational finances. Most humans are uncomfortable with the unknown and do not want to think about it, much less put it on a spreadsheet to be scrutinized.

2. The Cognitive Bias Bloopers

We all have cognitive biases. When applied to a budgeting process, these cognitive biases put together an entertaining blooper reel. First, we have the Overconfidence Bias. Captain Overconfidence thinks the budget is gold and cannot fathom being wrong. Then we have Confirmation Bias, an expert in finding information to support what is believed to be true, regardless of relevance, source, or accuracy. Lastly you have the coolest bias of all, Status Quo Bias, whose tagline is “if it ain’t broken, don’t fix it.” These three and many other forms of bias come together to put on a comedy routine within the budgeters thought process, leaving him or her to question what is real and what is not. 

3. Resource Wars: A Budgeting Battle Royale

In one corner you have human resources, in another you have marketing, and in another you have the sales team. Each group has their eye on that shiny prize they want to spend your budget dollars on. Budgeting meetings turn into a C-SPAN deluge with many words and little substance. There are no winners, only losers with the budgeter being the biggest loser of all (or so they are often told).

4. Constraints: The Budget Gurney

Annually, the budgeter decides that they are going to toss aside their proclivity towards weekly meal prep and advanced wardrobe planning in favor of a spontaneous creative bent towards life. Unfortunately, that annual disposition coincides with the budgeting process. The budgeter feels their creative zest is stifled by the rigid nature of a budget. Their dream of dreams not yet construed is squashed by the tyranny of a budget. They cannot spell creativity, but they know the budget process is suppressing their creative outlets. 

5. The Budget Meeting Nap Time

Then, there is the issue of employee engagement. The budgeter may take their task seriously, even if they do not enjoy it. How do they get team members involved in the process? Weeks of built-up angst over the budget process pour out during budgeting meetings, turning what should be a lively conversation into a monologue. The room warms up, eyelids get heavy, and participation vanishes. If team members are not actively involved in the budget conversation, then these meetings turn into a snooze fest rather quickly.

This is an attempt to take a humorous approach to a challenge for many organizations. A budgeting process does make us explore the uncertainty of tomorrow, deal with our interpretation of reality, deal with the agendas of our colleagues, wrestle with what we want to do versus what we realistically can do well, and then get departmental collaboration before finalizing everything. It is not easy, but it’s valuable.

Our next several posts are going to be focused on the budgeting process, starting with the next post with some thoughts around why an organization should make budgeting an annual priority. 

The accounting and financial outsourcing team at Dean Dorton has considerable experience in helping organizations of all sizes design, build, implement and monitor a budgeting process. Sometimes we drive the entire process and sometimes we simply brainstorm ideas or act as cheerleaders as our clients move through their annual budgeting process. We are here to help! 

Article Dean Dorton

Every stage of business growth places new demands on your accounting team. Whether you’re a small business with an administrative team of one or a larger organization with a fully staffed department managing the daily workings of your business, having competent and knowledgeable professionals managing your accounting is essential to your long-term success.

There are benefits at any size to outsourcing some or all of your accounting needs. We’ll discuss the most common (and costly) accounting mistakes, then examine some of the ways you can optimize your business through outsourcing.

The High Cost of Poor Accounting

Accounting is a field that requires strong attention to detail, organizational prowess, and the ability to stay current with ever-changing regulations.

While no accounting professional (or professional who is also tasked with keeping the books) sets out to make mistakes, mistakes do happen, and they can have significant consequences.

These are some of the most common poor habits and costly errors in accounting.

1. Delayed or incorrect expense trackingIf you have a small team managing a lot of moving parts in your organization, basic bookkeeping tasks like entering expenses and reconciling accounts can continually get placed on the back burner in favor of other duties that appear more urgent. When the urgency does strike (typically around tax season), the flurry of playing catch-up can lead to missed and misattributed expenses.

The cost: When expenses aren’t entered immediately, receipts can get lost or damaged, and poorly filed receipts are overlooked, resulting in missed write-offs and incorrect tax calculations. Additionally, when expenses aren’t properly recorded, a business’s balance sheet is off, making the business appear more profitable than it actually is.2. Manual data entryData entry errors can upend your accounting system. Common manual data entry errors include transposing numbers, over- and under-charging customers, applying payments to the incorrect invoice, and duplicate entries.

The cost: Improperly entered accounting data can lead to lost income, frustrated customers, and even additional IRS fines.3. Fines and fees for late payments and missed deadlines

Typical business costs include vendors who supply goods or services to your business, industry or networking-related memberships, estimated tax payments, and miscellaneous operating expenses. These accounts payable must be tracked and paid to remain in good standing.

The cost: Remitting payments past the due day may incur fees. Not paying estimated or annual taxes by the deadline will result in fines. If you routinely pay vendors late, they may choose to stop doing business with you.

4. Incorrect or incomplete tax filings

Filing business taxes requires an accurate accounting of your profits, losses, and expenses over the year. Poor accounting practices can lead to incorrect tax filings. When these errors are discovered, you will need to file an amended return to correct any errors in your taxes.

The cost: Incorrect and incomplete business tax filings can trigger an audit. Audits require an in-depth review of several years’ worth of tax documentation, tying up your administrative and accounting staff and diverting resources away from your daily work of running a business.

5. Outdated Software

Like any other software application, accounting software can become antiquated. Outdated software may expose you to cybersecurity risks as software vendors may not update security protocols on older systems. You may also find it hard to identify employees who know how to use the outdated software, or be unable to locate training programs that can support new employees learning the necessary skills to operate the software.

The cost: If vendors stop supporting antiquated systems, this could open you up to costly security breaches. You may also find you’re spending more time and money on recruiting or training efforts needed for employees to operate the system. There are also numerous cost-saving benefits provided by modern systems, such as customizable reporting, real-time dashboards, data analysis, multi-entity consolidations, and inter-company transfer automation.

Better Business Outcomes Through Outsourced Accounting

If your business accounting is currently being managed by an individual or small team overseeing all the administrative tasks (including the accounting), outsourcing some of those responsibilities can free up your workforce so they can focus on the work of managing your business.

Why is outsourcing accounting a smart business move?

Cash flow is key to growing your business. Outsourcing some or all of your business accounting functions can improve your cash flow by:

  • Ensuring your accounts are regularly reconciled so you have an accurate accounting of profits and losses.
  • Keeping tabs on expenses that allow your staff to flag opportunities for saving money.
  • Producing accurate financial statements that can be used to secure new funding.
  • Freeing up your administrative staff to focus on more important aspects of your business.
  • Reducing or eliminating the time and expense of onboarding new accounting staff or accounting technologies.

How Do Outsourced Accounting Services Work?When you outsource your business accounting services, you are handing the most important administrative function of your business over to people who are passionate about accounting.

A reputable outsourced accounting service provider will work with you to determine your bookkeeping needs. Often these firms offer tiered services so you can select the level of service that’s right for your business.What services are offered through outsourced accounting firms?

Typical services offered by outsourced accounting firms include

  • Managing accounts receivable and payable
  • Regular account reconciliation
  • Forecasting
  • Expense attribution and reimbursement
  • Payroll
  • Regulatory compliance
  • Tax preparation
  • Custom reporting

What roles do outsourced accounting services fill?Many of the services offered by outsourcing your accounting services can replace the need for in-house bookkeeping professionals. A quality accounting service will be able to fulfill every role within the financial services sector that would otherwise be handled internally.

Some firms even offer CFO services. In this role, they act as your organization’s CFO, fully taking on that responsibility up to and including reporting to the board of directors.

If you aren’t interested in fully replacing your entire accounting staff, you may be able to find a firm that offers training and consulting to help you streamline your financial functions and get your team working efficiently.

Are you ready to get your business financials under control? Learn more about Dean Dorton’s outsourced accounting services.

Article Dean Dorton

In today’s fast-paced business landscape, organizations of all sizes face the challenge of managing their financial data efficiently. Accounting, one of the most crucial aspects of any business, requires precision, compliance, and time. For many companies, finding the right balance between in-house accounting and outsourced accounting is an ongoing dilemma. In this article, we’ll explore the cost effectiveness of outsourced accounting and shed light on the numerous benefits it brings to businesses.

Understanding Outsourced Accounting

Outsourced accounting refers to the process of delegating financial tasks to an external accounting firm or a specialized service provider. These professionals handle various accounting functions, including bookkeeping, financial reporting, tax preparation, payroll, and more. Unlike in-house accounting, which relies on hiring and maintaining a dedicated accounting team, outsourced accounting offers a cost-efficient alternative.

Cost Savings

  • Reduced Overhead Costs: Maintaining an in-house accounting department involves numerous expenses, such as salaries, benefits, office space, equipment, and software. With outsourced accounting, businesses can save significantly on these overhead costs. The outsourcing provider handles their team’s expenses, and the client only pays for the services they require.
  • Scalability: The financial needs of a company can vary throughout the year. During peak seasons or when significant financial projects arise, outsourcing provides the flexibility to scale services up or down. This adaptability allows businesses to avoid overstaffing during quiet periods and ensures they have sufficient support during busy times.
  • Access to Expertise: Outsourced accounting firms are specialized in their domain. They employ experienced professionals who are well-versed in the latest accounting regulations and industry best practices. By tapping into their expertise, businesses can improve financial accuracy and reduce costly errors.
  • Technology Savings: Adopting and maintaining accounting software can be expensive. Outsourced accounting firms typically provide their software as part of their service package, allowing clients to access the latest technology without additional costs.

Increased Efficiency

  • Focus on Core Competencies: By outsourcing accounting tasks, business owners and their in-house teams can concentrate on their core competencies and strategic initiatives. This increased focus leads to improved productivity and a more efficient use of resources.
  • Timely and Accurate Reporting: Outsourced accounting teams are committed to delivering timely and accurate financial reports. This allows business leaders to make informed decisions quickly, respond to market changes, and identify potential cost-saving opportunities.

Compliance & Risk Management

  • Compliance Assurance: Staying compliant with tax laws, financial regulations, and reporting requirements is a critical aspect of any business. Outsourced accounting providers are well-versed in these areas, reducing the risk of non-compliance and associated penalties.
  • Risk Mitigation: Outsourced accounting firms implement robust data security measures and backup systems to protect their clients’ financial information. This reduces the risk of data breaches, financial fraud, and internal embezzlement, which could be extremely costly for a company.

In today’s competitive business environment, the cost effectiveness of outsourced accounting is evident. By reducing overhead costs, gaining access to specialized expertise, and improving overall efficiency, outsourcing financial tasks allows businesses to focus on their core operations and grow their ventures more effectively.

At Dean Dorton, we have over 40 professional accountants in our outsourced accounting team. We serve clients across multiple industries and various levels of complexity. We offer a standard accounting technology stack that consists of Sage Intacct, Bill.com, Floqast, and Expensify. We specialize in providing exceptional accounting and advisory services to our clients so that organizational leaders can focus on driving their organization forward.

Article Dean Dorton

As a startup owner, odds are you have a hundred tasks on your to-do list ahead of managing your business financials day-to-day.

While it is tempting to DIY all of your business administration functions to save money, the reality is that every task that diverts your attention from primary business operations is costing you money. 

To put it simply: you can either pay an in-house accounting team, pay an outsourced accounting service, or pay with your own time in lost profit. 

Let’s take a look at why startups are choosing to outsource their accounting.

Business Accounting Functions

Business accountants are responsible for the tracking, reporting, forecasting, and executing of financial transactions.

These are some of the most common accounting tasks:

  • Recording of financial transactions
  • Account reconciliation
  • Report production
  • Revenue recognition
  • Bill payment
  • Reimbursing employees
  • Collaboration with tax professionals

How Outsourced Accounting Can Help Startups

Whether you are starting a small business on your own or launching your startup with the help of investors, outsourced accounting can help streamline your financial processes and ensure your accounts are in order.

What outsourced firms offer

Outsourced accounting firms have the benefit of:

  • Professional accountants who are up-to-date on financial regulations and practices.
  • Accounting software with high-end functionality and automation.
  • Knowledgeable advisors who can help you identify cost-savings opportunities.
  • Industry expertise
  • Customized dashboards that provide key information in real-time

One of the most significant benefits of working with an outsourced accounting firm as a startup is establishing good financial practices from the start. 

Shifting overhead burden

An oft-forgotten expense of maintaining an in-house accounting function is the cost of recruiting, training, and retaining accounting personnel.  This is challenging given the current job market is red hot for accountants.  Additionally, accounting software requires annual license fees, which can be considerable. 

Outsourcing the accounting function moves risks associated with staffing and software costs from your company to the outsourced accounting service provider.  You will never have to interview an accountant or sit through an accounting software demonstration again.

Keep in mind that an outsourced accounting service provider will assign professional accountants to your organization.  You will likely have a team to rely on, with shared years of professional experience among them and access to the institutional knowledge of an accounting firm.  The value of this is difficult to quantify but should not be overlooked.

Services Offered by Outsourced Accountants

Outsourced accounting is a flexible solution that can grow with your business. Most outsourced accounting firms offer various levels of service that meet your needs.

Bookkeeping

Basic bookkeeping is the most time-consuming financial function for any business. It is also among the easiest to put off until “later.” 

Letting your books get away from you not only means a great deal of hassle when it comes to catching up, but that additional labor may delay your ability to secure loans or file taxes.

Outsourced bookkeepers can manage reconciling both your banking and credit accounts, record payroll, and work with your tax preparation professional. 

Accounting

In addition to maintaining books, accounting-level services manage more hands-on functions including bill payments, employee reimbursements, and weekly reporting. 

Timely bill payment will ensure vendors remain satisfied doing business with you. 

Virtual Controllership

As your business grows, you may encounter situations where you need financial assistance that is beyond the scope of what your accountant or bookkeeper can provide. This is when a controller steps in. 

In fact, controllers are often utilized during growth to ensure the company remains soluble while growing.

Virtual controllers offer project management and compliance services and often are called on to prepare financial data when applying for capital. 

Virtual CFO

Not every startup needs a full-time CFO, but many startups have needs that can be fulfilled by an outsourced CFO.

A Virtual CFO can help your startup establish a growth plan and identify viable funding sources. They are also available to make financial presentations and attend board meetings to answer questions about your startup’s financial standing.

Choosing the Right Partner for Outsourced Accounting

If you’re ready to outsource your financial functions, you will want to explore available solutions to ensure you are getting the services you need.

It’s advisable to find an outsourced accounting company that specializes in working with organizations like yours. If you are a startup backed by a significant amount of venture capital, you will need different services than a mom-and-pop store or sole proprietor service provider.

If you partner with a firm that is too big for you, you run the risk of paying exorbitant fees for services you don’t need. If you choose a firm that is too small, you may not receive the depth of expert advice you need to meet your growth goals.

Learn more about Dean Dorton’s outsourced accounting services.