Bundling outsourced services.

• Author: Myers, Theresa A.

Outsourcing is a word that many people outside the business world have possibly never heard. What those same people fail to realize, however, is that they've been outsourcing for years.

On a personal level, we outsource when we hire the teenager down the street to cut our grass. We outsource when we contract to replace the roof on the house. On a professional level, a company outsources when it caters a reception or pays someone to paint and hang wallpaper. Plumbing, electrical wiring, and other custodial services are all candidates for outsourcing, depending on the size and nature of the firm.

CPA firms supply a different type of outsourcing service. And again, we've offered many of the services for years. At the most basic level, we can provide bookkeeping services for our clients. Add to that accounts receivable, accounts payable, and payroll services, and you have the list of available services that many of our clients have been paying us to do for a long time.

At the more complex level, our professionals can act as fiscal agents, controllers, internal auditors, or chief financial officers, and technology support advisers. When a company has a variety of ways for us to assist, we can bundle services according to the client's specific needs.

Making fiscal sense

Perhaps the most commonly asked question regarding outsourcing is, Why? The answer is that it frequently makes fiscal sense to pay someone to perform a service that a company or individual isn't qualified to perform, doesn't have the time to perform, or isn't prepared to pay a full-time person to perform. Think for a minute about the contractor re-roofing your house. Assuming that he's licensed, he is carrying his own liability insurance. He also brings his own tools and is responsible for maintaining and replacing them. Assuming that you've hired the best roofer available, he will no doubt do a better job than you would and do it more efficiently. Replacing his helpers in the case of illness or termination of employment is not your problem. All you have to do is pay the bill and enjoy the results.

Now come back to the accounting industry's services. A 1999 survey conducted by the Treasury Management Association indicated that the average accountant earned $36,000 a year (salary and benefits). The average controller earned nearly $110,000 a year, and the annual salary and benefits for a chief financial officer exceeded $150,000 a year. The annual operating budget of the small to...