Is Co-Sourced Accounting the Solution Your Business Needs?

The accounting profession is experiencing significant changes, from talent shortages to a shrinking number of certified public accountants (CPAs). Many businesses are finding it increasingly difficult to maintain financial accuracy and compliance with these challenges in play. Co-sourced accounting has emerged as a flexible solution, but is it the right fit for your business? In this article, we’ll explore co-sourcing, how it differs from outsourcing, and how to determine if it’s the right option for your organization.

The Accounting Challenge Businesses Face Today

The current business environment is making accounting more complex. Companies must manage new financial regulations, increasing transaction volumes, and tighter reporting deadlines, all while facing a shrinking pool of skilled professionals. Many organizations are looking for ways to balance internal capacity with external expertise.

To fill this gap, many businesses are turning to co-sourcing—a model that enables them to supplement their in-house accounting teams without fully outsourcing. Let’s explore what this model looks like and whether it can help address your company’s specific needs.

What Is Co-Sourced Accounting?

Co-sourced accounting is a hybrid solution where an external provider works alongside your internal accounting team to fill in the gaps. Unlike full outsourcing, which hands over entire accounting functions, co-sourcing allows you to keep control over your core processes while benefiting from the expertise, flexibility, and resources of a professional services firm.

By supplementing your existing team with specialized skills or temporary help, co-sourcing ensures your business stays compliant and efficient, especially during peak periods or when specific expertise is needed.

Key Indicators That Co-Sourced Accounting Might Be Right for You

How can you tell if co-sourced accounting is the best fit for your business? Ask yourself these questions:

• Does your accounting team handle most tasks but struggle during busy times?
  If your internal team is strong but stretched thin during peak seasons, co-sourcing can provide extra hands or expertise.
• Are your financial records accurate, but you need more help with management reporting?
  Co-sourcing is a great option when you need assistance with high-level tasks, like management reporting or KPI dashboards, that go beyond routine financial record-keeping.
• Is your business experiencing rapid growth, and/or do you need temporary support?
  Whether it’s a temporary CFO, Controller, or additional staff prior to or during an audit, co-sourcing can provide the expertise needed to manage your growing financial needs.
• Do you have an ERP system in place but need additional expertise to fully leverage it?
  Co-sourcing can provide specialized skills to maximize the potential of your ERP system, ensuring you get the most out of your financial technology.

If you answered yes to any of these questions, co-sourcing could be a good fit for your business.

The Co-Sourcing vs. Outsourcing Decision

While co-sourcing supplements your existing team, outsourcing involves fully handing over accounting functions to an external provider. Here's a quick comparison:

When to Choose Co-Sourcing:

• You have a solid internal accounting team but need additional resources.
• You want to maintain control over your core functions but need temporary or specialized expertise.

When to Choose Outsourcing:

• You need to offload routine accounting tasks, like customer invoicing, accounts payable, and payroll.
• You’re ready to transition fully to the ERP and processes used by the provider.

How Co-Sourcing Adds Value to Growing Businesses

Co-sourcing is especially effective for businesses experiencing growth or undergoing complex projects. Here’s a scenario where co-sourcing makes a difference:

Example: A mid-sized company is expanding rapidly and needs help during an audit. Their internal team handles most accounting tasks well, but they need assistance preparing for their audit, ensuring compliance, and improving reporting accuracy. Instead of fully outsourcing, they co-source with a professional services firm, bringing in audit readiness support and technical expertise. The co-sourced team works alongside the company’s accounting staff, ensuring the audit runs smoothly without the need for additional full-time hires.

Co-sourcing also brings the advantage of flexibility. You get specialized expertise when you need it—whether that’s for an audit, temporary vacancy, or surge in workload—without the cost of finding and hiring permanent employees.

Why Co-Sourced Accounting is Critical in Today’s Economic Environment

In today’s economic landscape, with high interest rates, competitive markets, and talent shortages, businesses must manage cash flow effectively and avoid surprises. Co-sourcing offers a solution by providing the right level of financial expertise and flexibility to manage these challenges.

• Managing Cash Flow: Co-sourcing can help businesses maintain accurate, timely financial reporting, which is crucial for managing cash flow in a volatile economy.
• Avoiding Surprises: By having experts on hand, your business can anticipate potential issues and address them before they become costly problems.
• Adapting to Change: With the ability to scale up or down as needed, co-sourcing ensures your business remains agile in response to changing financial needs.

Co-sourced accounting helps businesses address these challenges head-on, positioning them to thrive in today’s demanding financial environment.

Why Choose Whittlesey for Co-Sourced Accounting?

At Whittlesey, we offer co-sourced accounting solutions designed to strengthen your team and improve your financial processes. Whether you need support during busy periods or specialized expertise to enhance your internal capabilities, we are here to help.

Our tailored co-sourcing services provide flexibility, so you get the right level of support without fully outsourcing your accounting functions. With deep expertise across multiple industries, we understand the unique challenges your business faces and are committed to helping you overcome them.

Get in Touch

Interested in learning more about how co-sourced accounting can benefit your organization? Contact us today to explore how we can support your team and help you meet your financial goals.

Published on 11.11.24