Closing the Accounting Staffing Gap: Exploring Outsourcing as a Solution

• Reading Time: 7 Minutes
• Published: May 15, 2023
• Last Updated: January 17, 2025

With the ongoing labor shortage in the accounting field, many businesses are struggling to find the right people with accounting expertise to help manage their finances. Finding and retaining qualified accountants has become a major challenge in today’s competitive job market, ultimately leading to an accounting staffing gap. At times like these, outsourcing may be the perfect solution to bridge this gap. In this blog post, we will explore the benefits of accounting outsourcing services and how they can help companies achieve their financial goals while reducing labor costs. Join us as we discuss how outsourcing can provide flexibility and scalability for businesses looking to close the accounting staffing gap.

Accounting Staffing Gap: What You Must Know

It is no secret that the accounting profession is facing a staffing shortage. The Wall Street Journal states that over 300,000 accounting professionals in the USA have left their jobs in the last two years. In another report published by AICPA in 2021, the number of accountants graduating has declined since 2012. This is an alarming number. With fewer people entering the accounting profession and the retirement of Baby Boomers, the staffing gap widens even more. As this large generation of Baby Boomers begins to retire, they are taking their accounting knowledge and experience with them, creating a big problem for businesses scrambling to find qualified replacements.

Another reason behind the accountant shortage is the high working hours and the higher stress and risks that come with this job, which gets further complicated by lower salaries for accountants as compared to other financial professionals like financial managers and analysts, leading to people losing interest in entering the accounting profession. Further, youth are finding the accounting profession less exciting in comparison to other jobs in technology, analytics, and data science, adding another reason to the increasing accounting staffing gap.

As difficult as it is to find experienced accountants for the job, it is equally difficult to train them to enhance their professional development. The regularly changing and developing technology makes it even more challenging for accounting experts to stay up-to-date and offer better accounting and bookkeeping services.

What is Outsourcing?

Outsourcing is the process of contracting with a third party to provide goods or services that are typically performed by in-house staff. When it comes to accounting, businesses may outsource specific tasks, such as bookkeeping or tax preparation, or they may contract with an outside firm to handle all their accounting needs.

Many businesses are trying to close the staffing gap by outsourcing some or all of their accounting functions. This can be an effective solution because it allows businesses to tap into a pool of talent that they might not have access to otherwise. It also gives businesses the flexibility to scale up or down as needed without having to make long-term commitments to hiring more staff. Further, they don’t have to think about staff training and managing staff replacement’ since the outsourcing agency tends to provide a candidate who is experienced in the required accounting functions and is well versed with the technology to be used to perform the required function. Further, it is the onus of the service provider to fill in the right candidate in case the person performing the job resigns.

Accounting outsourcing services have become a popular solution for addressing the accounting staff gap. By working with an experienced outsourcing provider, organizations can get the right accountant without having to add headcount. Outsourcing can also help free up existing staff to focus on higher-level strategic tasks.

Advantages of Outsourcing for Filling the Accounting Staffing Gap

When looking to hire skilled accountants, many businesses are turning to outsourcing. Outsourcing provides a number of advantages when it comes to filling the accounting staffing gap, including:

• Access to a global talent pool: When you outsource your accounting staffing needs, you will have access to a global talent pool. This means that you can find the best possible candidate for the job, be it a bookkeeper, financial reporting expert, accounts payable processor, accounts receivable manager, accounting manager, etc. Accounting outsourcing services providers offer a global pool of accountants with different skill sets and experience levels. It allows you to find exactly the right person for the job rather than settling for someone who is “good enough”. You can also go with accounting offshoring to countries like India, the Philippines, Mexico, etc., to hire professionals from distant countries without worrying too much about the costs.
• Cost-effective solution: Outsourcing is often more cost-effective than traditional staffing methods, such as hiring full-time employees. It is one of the best ways to reduce labor costs and minimize the staffing gap. This is because you only pay for the services you need when you need them. Outsourcing can save you money on labor costs, as well as other costs associated with maintaining an in-house accounting staff.
• Access to technology: Outsourced accounting services providers usually have professionals with expertise and experience working on different accounting software and tools. Some services providers even provide services like Microsoft Business Central and NetSuite accounting services for medium size businesses to cater to their complex accounting needs. Finding an experienced accountant with expertise in the software you want to use or are using in-house can be a bit difficult. Outsourcing can be especially helpful in such situations.
• Flexibility: Outsourcing provides greater flexibility when it comes to staffing. You can scale up or down as needed and are not tied into long-term contracts. It can be helpful when your business is growing or experiencing fluctuations in demand. For example, when you hire remote accountants offshore, you do not have to worry about increasing or decreasing the number of personnel in the accounting department whenever your business requirements change. Your outsourcing partner will handle the personnel requirements while you take care of your other core activities.
• Improved quality: When you outsource your accounting staffing needs, you can be sure you will receive high-quality services. Accounting outsourcing services providers are experts in finding the right person for the job. They can judge the best fit accountants and bookkeepers for the tasks, further providing training and knowledge of the tasks to be performed. It results in improvements in the quality of deliverables and saves time for the business, which they would have otherwise spent on hiring and training the staff internally.
• Better balance: Outsourcing can help firms improve their work/life balance. When staff is overloaded with work, it can lead to burnout. But by outsourcing some of the workloads, firms can take some pressure off their employees and improve morale (and retention rates).

How to Choose an Outsourcing Partner?

If your organization is considering outsourcing its accounting functions, there are a few things to keep in mind when choosing an outsourcing partner. Below are some factors to consider when making your decision regarding accounting outsourcing services:

• Make sure the provider has experience with businesses like yours. Ask for references and check out their website and social media presence to learn more about their work.
• Consider the size of the provider. Some organizations prefer working with a large, well-established firm, while others prefer a smaller, nimble provider.
• Think about your specific needs and what you want the provider to do for you. Do you need help with bookkeeping, financial statement preparation, tax compliance, payroll, or something else? Make sure the provider you choose offers the services you need.
• Consider pricing and value when making your decision. Get quotes from several providers and compare not just the price but also the quality of services offered and the provider’s reputation. Evaluating the quality of services when going with the offshoring accounting function can be crucial.
• Consider the technology the potential service provider uses in offering their services, such as NetSuite, Xero, Zoho Books, etc. It is best to work with an outsourcing partner with good experience in using the accounting systems you are using for your business.

Conclusion

The accounting staffing gap is a challenge that many businesses face today, but thankfully there are solutions, such as outsourcing, that can help. Outsourcing your accounting needs can give you access to highly skilled workers and allow you to free up capital for other business investment opportunities. You can either outsource your entire accounting function or just some parts of it while handling the other part of the accounting function in-house. While it may not be the right solution for every company, researching the possibility of outsourcing should be seriously considered when tackling the challenge of closing the accounting staffing gap. Accounting offshoring is the best form of outsourcing that helps businesses access talents worldwide and get their books in order without you having to invest too much into it.

Accounting and bookkeeping firms like Whiz Consulting have been helping businesses deal with accounting and staffing issues for a long time. We have almost a decade of experience handling businesses’ accounting and other financial needs. Whiz Consulting has been helping businesses to offshore their accounting function by enabling them to hire experienced remote accountants offshore for their different accounting tasks, which helps them enhance their productivity and success without worrying about setting up and managing a full-fledged accounting department internally.

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