Select Page
Reading Time: 4 minutes

With unemployment in the accounting and finance industry registering at 1.9% as of April 2022 and falling to 1.6% as of July 2022, the adage that “good help is hard to find” is even more true in accounting and finance than in the general population. The hiring challenges leave few options when the existing accounting department no longer meets needs or doesn’t have the competencies to grow with your business.

Fortunately, public accounting firms such as Calvetti Ferguson have a talent pool consistently ready to provide quality services for your company.

While transitioning to an outsourced accounting model is not without hiccups and some frustration, it does not need to be overly painful. Going into the transition equipped with information about the process can make the transition smoother and can help ensure your company doesn’t skip a beat.

Step One: Understanding Your Own Needs

Calvetti Ferguson can handle your needs from accounts payable (AP) invoice entry and customer invoicing through controllership needs and financial planning and analysis. We see many different combinations of services within this broad range requested from our clients. Our clients often hire us to facilitate transaction processing (primarily AP), manage the monthly close process, and provide a review, analysis, and reporting on their financials. Regardless of your company’s needs, a well-defined scope is the starting point of a productive discussion with your potential firm. Below are some questions to prepare for during the initial conversation:

  • At a high level, what are the current pain points you want to address through outsourced accounting?
  • How does your business make money? What do you have to spend money on to generate that revenue?
  • What systems are you using? Do you use any third-party software critical to operations or the accounting workflow?
  • Do you feel your systems currently facilitate your operational and accounting needs? Why or why not?
  • If not, what other technology or process change do you think you need, and what do you hope to get out of it?
  • How many transactions per month are for transactional components you want the firm to take over, and is the process generally manual or automated?
  • What reporting do you rely on for management and business decisions?

Step Two: Hold a Scoping Call With Prospective Firms

Conversations with prospective firms will be more productive with a good understanding of the above answers. The above questions are not the only ones to answer. Firms will ask further questions about compliance needs (i.e., payroll filings, sales, and use tax filings) or other areas as the conversation develops. During this call, you can expect to discuss the fee structure (fixed fee vs. hourly billings) and contingencies for the engagement to move forward. For example, quotes may be contingent on enrollment for specific technology enhancements (automated AP, project workflows, reporting bolt-ons) depending on your required services.

You can also expect to discuss retainers and how they can apply to future work. Depending on your desire to work with the firm, you can request a proposal (which is a rough outline of the services we offer and at what cost) or a formal engagement letter (contractual obligation based on the proposal verbiage). If you choose to engage the firm, signing and returning the engagement letter obligates the firm to perform the services. Expect a retainer invoice shortly after signing and documentation and access requests to begin.

Step Three: Documentation and Access

Once engaged, we will request documentation and access. While the requests may seem overwhelming and voluminous, organized and up-front documentation significantly limits time spent digging through folders searching for needed documentation. This part of the process allows the budget to be dedicated to value-add work for you instead of administrative time. In general, documentation requests will focus on items required for the specific scope of the engagement:

  • Accounting System Access: Depending on the specific needs of the company, access to the accounting system can vary from read-only to full access for multiple modules (i.e., inventory, accounts receivable, and accounts payable). Setting up a specific profile for the firm to use and share is best practice, keeping your license fees down.
  • Transaction Processing: Frequent requests will include read-only profiles set up for credit cards, bank accounts, credit facilities, shared email boxes, or other items that facilitate AP invoicing, customer invoicing, coding credit card expenses, or treasury management.
  • Prior-period Reconciliations: If the firm manages the close process, completed reconciliations from the prior fiscal period are needed. For example, if you engaged a firm to provide outsourced accounting for all of FY22, then your previous accountant should have completed reconciliations as of December 2021. If you engage the firm in an off-month (i.e., May 2022), then be prepared to provide reconciliations for the previous month (i.e., April 2022). If reconciliations aren’t available, they will be required, and the firm could complete these as part of the transition.

Step Four: Execution

With proper access and accessible documentation, it is full steam ahead. The execution phase is characterized by process walkthroughs and frequent updates on project status. Process walkthroughs are an opportunity to explain the business operations in more detail with the firm and discuss any technicalities in the transactions. In theory, AP processing is easy. In reality, there is always nuance in determining which legal entity receives which bill, preferences for where certain vendors are coded, how approval thresholds are established for different expense types, and where to route expense approvals.

The close process has its nuance, such as which accounts you’re using and why, along with any month-end adjustments needed for proper financial reporting. In our experience, daily, bi-weekly, or weekly calls work best during the first few weeks of execution to keep progress moving, address outstanding document requests, keep significant issues at the forefront of discussion, and foster the relationship. Once the initial heavy lift is complete, semi-weekly or monthly meetings to discuss significant transactions, key process changes, or other initiatives drive our clients’ highest return on investment.

Contact us

Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals across the country. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team is ready to help you. Please complete the form below, and we will follow up with you shortly.