We've had discussions on Proformative about top-down hiring vs. bottom-up hiring...what about outsourced vs. in-house? What are the most compelling reasons to choose one over the other? CFOs: How have you expanded your own
What is the Best Way for a CFO to Expand the Accounting Team?
Answers
One MAJOR consideration is the types of systems (in-house systems vs cloud) the company is using (or planning to implement). This will majorly affect hiring/expansion considerations.
That being said, it has always favored the bottom up approach. The need to do the work overpowers the need for structure or hierarchy. Besides, I have always espoused a flatter organization and want to feel connected with the work. Also, my small to mid market niche has a certain bias for flatter organizations.
As far as outsourced or inhouse, it has always been a BALANCE between cost and the priority to keep information and the work within the company.
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* I have always favored the bottom up approach.
Every time I expanded an Accounting team, the approach was different. For mid and lower levels - I have either hired externally or promoted from within; but for supervisor and manager, I promoted from within.
I always look at process improvement first. I look through the task lists of each person and we make decisions with a start, stop, continue approach. Many tasks can become "just something we've always done" but really not something we need to continue. Through innovation we've taken a process that took hours and applied a macro to it so it takes seconds.
With innovation,
An unexpected and delightful response, Christie! I just completed two macros for two clients that caused the same dramatic result. When you've made the most of what you already have, you can not only delay additional expenses but be confident that you will make the most of new accountants, be they outsourced or in-house, when you need them.
From my experience...
Step 1 - automate all work that can possibly be automated. Your business intelligence person in IT is an important person.
Step 2 - take note of the remaining work, map\improve your processes and take note of where you're short on compliance issues, who is overworked and the work that can be outsourced (ie. payroll, lockboxes, etc...)
Step 3 - talk to your staff on their desire for a
In terms of whether you should outsource your accounting function, the answer to some extent is the size of your organization and whether there are outsourcing options. Almost all small banks and credit unions have outsourced their back offices and much of their accounting work. Small Oil and Gas companies and restaurants also have some very good outsourcing options.
My view is that any type of administrative function should be outsourced as much as possible so the company can concentrate on what they do best.
In my ideal view, a "company" should be composed of the experts and strategic thinkers (CEO,
With outsourcing comes some loss of control. And that is hard to do for many.
This idea of yours might be radical, Scott, but more and more people are catching on. Consortiums are popping up left and right, projects are being completed on a crowdsourced basis, and everybody knows that "our team" doesn't necessarily mean "our W-2 employees."
I love how you demarcate the strategic contribution from the information sources.
Thank you!
Scott's last point is key: control.
My former firm had a material weakness due to outsourced accounting. Part of it was design of program and part was execution.
Either way, the challenge is managing the quality of the individuals working on your accounting - you only can influence, but no control, especially day-to-day.
It's a
I've seen both work and offer great cost benefits to the firms, they were managed very differently.
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