Posted on Feb 7, 2017

Outsourcing Combines with Automation

Most outsourced services employ some type of online or automated product to perform the work and make data easily accessible. In 2016, the top billing and invoicing software for business included FreshBooks, QuickBooks and Zoho Invoice. These solutions were chosen for their ease of use, expense tracking, automated invoicing, online payment options, customized reports and customer support. Zoho is also integrated with a larger suite of business software, including CRM and accounting software.

There are programs designed specifically for an industry such as Clio, a time and billing software for law firms that is cloud-based and purchased by subscription. However, decisions about automation and outsourcing shouldn’t be made according to the features of a software package alone. They should be made    foremost from the perspective of being efficient. If you won’t have time to train staff properly on a new software solution, the move toward outsourcing may be more cost-effective in the long run.

We addressed this in an earlier article, but it bears repeating. Key considerations for outsourcing accounting and payroll are as follows:

  • How much experience does the outsourcing provider have in payroll administration or accounting — and is there a dedicated team?
  • Will the team walk you through data collection and set-up or are you on your own?
  • Who is your go-to contact to ask questions about liabilities or deadlines?
  • Is the provider NACHA compliant for ACH direct deposits?
  • Can you arrange for tax payments on a schedule that supports cash flow along with compliance?

accounting firms dallas, be more billable, outsource payroll administration, professional service accountingThis last question is an important business consideration that most companies don’t know about. Some payroll services withdraw all funds from the business account for payroll transfers and taxes all at once, even if taxes aren’t due for a few weeks. If your receivables come in the first week of the month and payroll taxes are due on the 15th of the month, you can schedule payments in a way that supports cash flow while still being compliant. Some payroll services may not provide guidance on industry-specific issues like law firm shareholder bonuses, for example. Consider carefully the level of industry expertise before selecting a provider.

Automating Finance is a Long-term Strategy

Determining the right automation solutions for your firm can’t be done overnight. It seems that new providers and products are coming to the market all the time, and it’s hard to compare apples to apples beyond price.

Successful transitions to outsourced and automated processes and solutions have three things in common:

There must be a clear business case for the automation.

Before selecting a solution, firms should review their current accounting and payroll processes to cut out any redundant or outdated steps. It doesn’t make sense to automate a process if it’s outdated. A CPA can help you review accounting processes and procedures to identify best practices before seeking automation.

Integration with existing systems makes adoption easier.

You may already have some solutions in place that are working well. Future automation should integrate with those solutions for efficient management and reporting. For example, you may already use a time and billing or workflow system you really like. New accounting or payroll tools should play well with those solutions. Your goal is an end-to-end process that reduces manual work and errors while improving the sophisticated of data.

IT staff should meet with operations and finance staff to understand the goals.

Whether you have internal or outsourced IT staff, one of the biggest mistakes with technology adoption is that IT doesn’t speak enough to operations to make sure the solution is actually going to solve problems and enhance the business. In the same way, IT needs to be in the business loop to determine if a chosen solution can be easily supported and maintained. In the industry, this collaboration is called “DevOps,” and it’s not yet foolproof. Some experts predict that movement toward cloud-based technologies will make developers happier because they can update solutions without having to check in with Ops. Meanwhile, the operations staff can get what they need without worrying about costs or slow adoption by staff.

If we just look at automating the invoicing process, firms could improve efficiency dramatically. About 84 percent of invoices enter processing in formats that include paper, fax and email attachments, according to a study by Paystream Advisors. We’ve seen estimates that the average cost of automated invoice processing is $4 versus $20 for manual processing.

Automated payroll processing reduces costs even further. The American Payroll Association (APA) estimates that automation reduces payroll processing costs by as much as 80 percent, much of that from reducing errors in invoices and paychecks…which also reduces the risk of payroll penalties.

Cornwell Jackson’s Business Services Department offers a wide range of outsourced financial services to serve professional services — including outsourced payroll processing and solutions to improve cash flow and productivity.  Contact us for a consultation.

Download the Whitepaper: Be More Billable: How to Add More Automation to Professional Service Accounting

Mike Rizkal, CPA is a partner in Cornwell Jackson’s Audit and Attest Service Group. In addition to providing advisory services to privately held, middle-market businesses, Mike oversees the firm’s assurance practice and works directly with many professional services firms in the metroplex. Contact him at or 972-202-8031.