Outsourced finance and accounting services have a number of upfront benefits: efficiency and cost savings spring quickly to mind. But there are a number of other benefits, too, that are less obvious but just as valuable.
To fully evaluate the viability of outsourced accounting services for franchise restaurants, it’s important to take these into account.
With that in mind, let’s take a look at a few of the subtler benefits to working with an outsourced accounting firm.
1. Additional time.
Regardless of the business context into which outsourced accounting services are brought in, one subtle benefit is nearly always additional time for critical personnel.
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In other words, outsourced services cancel the opportunity cost of time spent on standardized accounting procedures.
In a scenario where the business owner was processing some of the accounting activities personally, there’s an obvious benefit to removing those responsibilities from their already-overloaded plate. Outsourcing accounting allows these individuals to reclaim some of the hours in the day and rededicate them toward areas of higher impact – perhaps freeing them to work on ensuring process optimization or giving them the time to plan for new locations.
The same is true for internal accounting resources – but we’ll get to that later.
2. Credibility and confidence.
Credibility and confidence are less-obvious benefits because they’re difficult to quantify, but they can be some of the most impactful.
As we’ve written about before, an integral part of our process is building and maintaining the financial infrastructure that will enable consistency and future optimization. This is important not just from an internal perspective, but also from an external one; a sound financial infrastructure builds credibility with third-party stakeholders.
With a sound financial structure in place, lenders and investors feel much more confident in a business’s ability to deliver (either in terms of repayment or return on investment). This can reap rewards when it comes to negotiating lending terms or raising capital.
One of our core beliefs is that businesses with access to financial expertise are far more likely to succeed. Part of this is because of the credibility and confidence they’re able to secure. We’ve seen this play out again and again.
Scalability is another benefit that’s less-often considered when examining outsourced accounting solutions.
This is simple to illustrate from a restaurant accounting perspective: internal accounting departments typically require one person per six locations, while our optimized teams can serve twelve locations at a cost that’s lower than a single internal hire. Let’s say your business is planning to open 10 new locations in three years; it’s much easier to do that with an outsourced accounting solution than it is to grow an internal team over that time span.
Businesses rarely consider this when searching for outsourced solutions, but it proves valuable when the time comes to grow.
4. Complement to existing F&A structure.
Finally, a less-apparent benefit of outsourced services is their ability to complement existing F&A structure.
Businesses sometimes feel tension when it comes to integrating outsourced solutions with in-house talent. Who will fill which roles?
The good news is that our services enable internal personnel to move into the areas of highest value. This is related to reclaimed time – as discussed earlier – but it applies specifically to internal finance and accounting talent.
Typically, the core competency of outsourced services focuses around areas that require lower levels of company knowledge and less implementation of advanced skill sets. In other words, our efficient teams are able to assume the burden of standardized accounting tasks, as shown in the following graphic.
For businesses with internal capabilities that have traditionally fallen into the bottom-left quadrant (see: restaurant franchises with one or two internal accountants), outsourced services allow the internal team to move into service in the top-right quadrant.
That’s important, because here’s the truth: very few people want to spend their careers in the bottom-left quadrant. If all that’s available to F&A talent at your business is a position focused on standardized accounting activities, those people will likely seek career growth elsewhere – and you’ll have to deal with attrition. By providing an outsourced solution, your business can give internal hires a career path toward areas of higher value, reduce turnover, and improve efficiency.
Alternatively, there are also businesses with high-level financial capabilities but limited resources (see: a CFO at a tech firm without an internal team). In these contexts, outsourced services allow internal resources the bandwidth to focus on high-level, strategic activity where they add the most value: planning, profit analysis, etc.
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Outsourced accounting services simply make sense. That’s true even when you consider only the immediate benefits, like efficiency and cost-savings. But the choice becomes even more impactful when you also factor in subtler benefits like reclaimed time, boosted credibility, improved scalability, and complementary service to internal teams.
At Global Shared Services, we provide outsourced franchise accounting and restaurant accounting. If you’re in either industry and you’re ready to unlock the benefits of outsourced accounting, get in touch with us.
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With GSS, we meet our franchisor requirements on time and with accuracy. The local CPA could not handle our volume. We are so happy to have made the change. GSS knows our business and our franchisor requirements.Multi-unit fast sandwich Owner