How Much Will It Cost to Outsource My Accounting Function?

Are you considering outsourcing your accounting function?

Such a major decision can be the source of much angst, but it can also be an important strategic decision that gives you more flexibility, financial expertise, and cost-savings. Whether you are a for-profit company or a not-for-profit organization, this arrangement will free up your time so you can focus on your core operations.

Factors Influencing Outsourced Accounting Pricing

On average, clients pay $3,000-$6,000 per month to outsource their accounting function; however, many  factors influence this figure. If you’re wondering how much outsourcing your accounting function will cost, know that there are several variables we consider when a prospective client comes to us. Let’s start with the main five.

1. Size of the Organization
   

   Obviously, from a scope of services perspective, a $1 million organization is vastly different from a $5 million organization in terms of number of employees, number of products or services offered, potential number of nonprofit programs, etc.

2. Scope of Services Required
   

   The type of services your organization needs vary according to several circumstances. For example, is there an individual within the organization who will perform some of your accounting tasks or do you require a firm to manage all of your accounting needs? Do you require us to manage your payroll? Would you like us to eventually make presentations to your CEO or Board of Directors? Defining the scope of services your organization needs on a granular level is a key component to determining your monthly accounting cost.

3. Complexity of the Organization
   

   Believe it or not, complexity is often the primary variable of cost. The more complex the company or nonprofit organization is, the more time an outsourcing firm must allocate to performing monthly tasks and the more high-level financial expertise is needed to ensure those tasks are done correctly. For example, a $5 million nonprofit agency with one program and five employees is vastly different from a $1 million agency with 15 programs and 35 employees.

4. Transaction Volume
   

   The number of transactions completed each month is an important component when calculating cost. For example, when pricing an engagement, we consider the number of accounts payable and receivable invoices processed, the number of credit card transactions made each month as well as the number of bank accounts the organization maintains. A company with one credit card and 75 transactions will likely require more time and attention than a company with five credit cards and 12 transactions.

5. Industry
   

   Some industries are just inherently more complex than others. Because our team has been serving clients for decades, we have experience operating in many industries and we apply that knowledge to help calculate prospective clients’ fees. Are you a technology company that serves the Department of Defense, a nonprofit organization that has multiple grants from federal agencies or a property manager with 30 properties and 30 different ownership groups? Understanding your industry and its nuances is an important part of our calculations.

____________

Flat Monthly Fees

At ARI, we charge a flat monthly fee for our services. This allows our customers to better understand the cost of their accounting, and to budget this cost more effectively. We understand that some months we may spend more time on the engagement, and it’s incumbent upon us to operate at peak efficiency and harness the power of technology, wherever possible.

Once we engage with a client, our contracts are considered evergreen. That means they will automatically renew each month. But, if you ever want to terminate our engagement, all we require is 30-days’ notice. And the same goes for us. If, for some reason, we determine ARI is not a good fit for your organization, we will provide you at least 30 days’ notice.

Do you have questions about exactly how the transition of your accounting function to ARI occurs? Click here for a detailed walk through of our tried-and-true process.

Still on the fence as to whether outsourcing if right for your organization? Watch this video to discover the 10 benefits of outsourcing your accounting function.

Ready to discuss your needs? Contact us today.

Frequently Asked Questions

What are the biggest advantages for a small or mid-sized business to outsource its accounting?

Some of the advantages of outsourcing your accounting include: eliminating a single point of failure, having access to a team of seasoned financial professionals, saving money vs. paying an internal accountant or bookkeeper, protecting your organization from financial fraud, avoiding penalties by cleaning up financial issues in advance, reducing compliance-related risk and getting critical data to make important business decisions.

How does ARI determine the monthly fee for my business?

Several factors come into consideration when we determine your monthly fee for accounting services. These include: the industry in which you operate as well as the size and complexity of your organization, the scope of services you require and the number of transactions you complete each month. Remember that we always charge a flat monthly fee for our services to help you budget effectively.

What kind of services can I include or exclude when outsourcing accounting?

ARI offers a host of services that our clients can take advantage of. These include managing daily and weekly transactions, compiling monthly reports, budgeting, 1099 preparation and year-end tax filing preparation as well as ensuring compliance with sales and property tax requirements. We also provide CFO-level support and financial strategy development. For a complete list of our services, click here.

How difficult is the transition process if I decide to outsource to ARI?

Typically, our clients are pleasantly surprised by how easy it is to transition their accounting function to ARI. We start with an introductory phone screening, then conduct an in-depth exploratory meeting. We’ll review your existing accounting records and prepare a proposal with the scope of services we recommend, including any catch-up or clean-up work that needs to be done. After you sign the engagement letter and begin our work, you can rest easy knowing your accounts are in good hands. 

And, if for any reason, you need to terminate our relationship, all we ask is for at least 30 days’ notice.

Here’s a blog that explains the process in depth. And here’s a two-minute video that explains the process. 

In addition, read what our clients say about our transition process.  

How does outsourcing compare to hiring an in-house accounting team in terms of cost and expertise?

When you consider hiring a full-time bookkeeper or accountant, you have to figure in all of the associated direct and indirect costs, including payroll taxes, health insurance, worker’s compensation insurance, benefits, paid time off, training expense, management time, office space and IT requirements. And, when that individual leaves, turnover expenses can add up quickly. 

As a simple example, let’s say you’re paying your internal accountant an annual salary of $50K. Benefits can easily add up to an additional $10K. Depending on your needs, when you outsource with ARI, you can easily trim up to 30% from that cost and get CFO-level advice, and business continuity so you don’t have to invest effort in training new accountants.