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.

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.

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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.