Frequently Asked Questions (FAQ)

  • You should consider outsourcing your accounting to an accounting expert sooner rather than later. This is especially true if there is nobody on your current team with accounting or finance experience, or if you find yourself spending more than an hour or two each week doing your bookkeeping.

    You and your team should focus on how to best grow the business and provide the most value to your customers. Back-office activities such as accounting should be delegated and outsourced to third-party providers who can efficiently manage these tasks, and often at a lower rate compared to a full-time or part-time hire.

  • In many cases, and especially for smaller businesses, it is likely cheaper to outsource accounting to a third-party instead of bringing on a new full-time hire. Outsourced accounting experts can complete accounting tasks and provide accurate reporting, often in far less time than a standard 40-hour work week, and do not require payment of payroll taxes and benefits compared to a full-time employee.

  • Outsourced accountants handle everything that you would expect a full-time accounting employee to. This can include all aspects of key functions such as bookkeeping, payroll, customer invoicing, and vendor payments and financial reporting for a small business.

    For a larger business and if outsourcing a specific role, the outsourced accountant will perform the duties that are normally expected for that role. This includes tasks such as oversight of month-end close and monthly financial reporting for an outsourced Controller role.

    Specfic duties should be agreed upon between you and your outsourced accountant, and a good outsourced accountant will bring suggested duties as well based on their experience in that given role.

  • One example for outsourced accounting is for a small business, where a company may choose to outsource their entire accounting function to an outsourced provider. The provider will perform all bookkeeping duties, including processing of customer invoices and vendor payments, within either the company’s existing accounting system or the provider’s own system.

    For larger businesses, it may be more beneficial to outsource certain responsibilities that are outside the expertise and/or capacity of the existing accounting team. This may include an outsourced Controller for oversight of month-end close processes and monthly financial reporting, or a temporary bookkeeping resource if a member of the company’s accounting team leaves unexpectedly.

  • Outsourcing a company’s accounting functions to an accounting expert can be a good idea for companies of all sizes.

    For smaller businesses, outsourcing accounting is often more efficient and cost-effective than hiring a full-time bookkeeping employee, and allows business leaders to focus on higher-value activities within the company.

    For larger businesses, outsourcing key roles such as a Controller can help supplement the existing accounting team to focus on specific initiatives, such as oversight of month-end close and financial reporting, or special projects such as a new ERP implementation.

  • The key disadvantage when outsourcing accounting is a lack of control and immediate communication. Outsourced accounting providers generally service multiple clients, and so will complete the accounting for your business at their discretion, and may not respond to a question or call as easily as an internal team member.

    Because of this, it is important to find an outsourced accounting provider that is responsive, proactive on any issues or requests, and provides high-quality results in line with your expectations.

  • By outsourcing your accounting to an accounting expert, you can experience the following 5 key benefits:

    • Expert guidance. Engaging an accounting expert allows them to focus on the correct accounting treatment for transactions, allowing you to focus on other matters.

    • Faster Timelines. Due to their expertise, an outsourced accountant can normally process transactions within a few hours for a given week.

    • Lower cost. Hourly or monthly fees for an outsourced accountant are often lower than the salary of an equivalent full-time hire, and do not require payroll taxes or benefits.

    • High quality reporting. An outsourced accountant can tap their expertise to ensure correct accounting treatment, and provide financial reporting in a clean, easy-to-understand format.

    • Focus on Key Activities. Having your bookkeeping handled by an outsourced accounting expert gives you the peace of mind to focus on other tasks, such as customer service or growing the business.

Outsourced Accounting

  • A technical accountant is considered a specialist in accounting frameworks like US GAAP and IFRS. Their primary role is to research complex guidance under these accounting standards, and interpret the guidance to properly account for a company’s specific operations and transactions.

    In addition to the above, a technical accountant’s role includes discussion with key executives, such as the CFO, on the financial impact from the accounting treatment, and any necessary changes to existing processes or controls. They may also need to prepare supporting memorandums or workbooks and argue their position to auditors or other reviewers. A technical accountant may be a dedicated role within a larger company, part of the responsibilities of a Controller/CFO for small-to-medium businesses, or an outsourced advisor or specialist.

  • Technical accounting is most applicable for companies that have financial reporting requirements under generally accepted accounting frameworks including US GAAP or IFRS. It requires the research and evaluation of those more complex accounting frameworks to properly account for a company’s operations and transactions and related financial reporting.

    • The technical accounting process includes the following:

    • Research of current/upcoming accounting guidance and requirements under complex accounting frameworks (e.g., US GAAP, IFRS)

    • Interpretation of the authoritative guidance, as well as industry practice (i.e., how other companies in the same industry evaluate the resulting accounting treatment)

    • Making necessary accounting adjustments, preparing supporting documentation such as memorandums or workbooks, and implementing any necessary changes to existing processes or controls

    • Preparing the company’s financial statements (and related footnotes) in compliance with the requirements under the framework.

    • If applicable, discussion with the company’s auditors or other reviewers on the accounting treatment and underlying interpretation of the guidance.

  • Some of the most common technical accounting topics related to US GAAP include the following:

    • Revenue Recognition (under ASC 606)

    • Lease Accounting (under revised guidance of ASC 842)

    • Business Combination / Acquisition Accounting (under ASC 805)

    • Share-Based Compensation (under ASC 718)

    • Complex Equity Transactions

    • Debt Transactions, including debt modifications or extinguishment

    • Preparation of Financial Statements and related footnotes

    In addition to the above, companies should be aware of any upcoming new or revised accounting standards, such as the recent new Current Expected Credit Loss (CECL) standard under ASC 326.

  • Financial accounting can be considered as the accounting regularly performed within any business, and which results in periodic financial statements that are provided internally, such as to management or a board of directors.

    Technical accounting refers to the more complex accounting that is required for companies under accounting frameworks such as US GAAP or IFRS. It requires additional research and evaluation to properly account for transactions in accordance with specific requirements under those accounting frameworks.

  • A technical accounting manager requires specialized knowledge in specific accounting frameworks such as US GAAP and IFRS. Their primary role is to research complex guidance under these accounting standards, and interpret the guidance to properly account for a company’s specific operations and transactions.

    In addition to the above, a technical accounting manager’s role includes discussion with upper management, such as a Technical Accounting Director, Controller, or CFO, on the financial impact from the accounting treatment, and any necessary changes to existing processes or controls. They may also need to prepare supporting memorandums or workbooks and argue their position to auditors or other reviewers. A technical accounting manager may be a dedicated role within a larger company, part of the responsibilities of a Controller/CFO for small-to-medium businesses, or an outsourced advisor or specialist.

  • Hiring a technical accounting specialist provides expertise in navigating complex accounting standards and regulations, ensuring compliance and accuracy in financial reporting. They enhance the quality and reliability of financial statements, streamline audit processes, and support business transactions like mergers and acquisitions. Additionally, they help identify and mitigate financial risks, making them invaluable for maintaining robust and compliant financial operations.

Technical Accouting

  • Undergoing a financial statement audit can be a daunting task. It involves numerous information requests by the external audit team and an in-depth knowledge of both your company’s operations and the required accounting guidance framework, such as US GAAP or IFRS.

    The following steps can set you up for success as you prepare for an upcoming audit:

    Step 1: Confirm the Audit Scope. Find out the fiscal periods under audit, reporting deadlines, and the level of audit/review required.

    Step 2: Identify the Audit Lead. Select who within your company will be the main contact with the auditors throughout the engagement. This should be someone with a strong understanding of the company, of accounting principles, and access to company information.

    Step 3: Select an Audit Firm. Interview with multiple firms and see which is best in terms of reputation and cost.

    Step 4: Obtain an audit request list. This will help you understand the types of reports and other files that the auditor will request.

    Step 5: Perform an internal assessment. Considering the higher risk areas of your business, such as Revenues or significant/complex transactions, will help you focus your efforts.

    Step 6: Develop an audit timeline. Work with your auditors to determine key deadlines for requests and areas, priority of their various requests, and a cadence for periodic updates on progress and any open items or roadblocks.

    Step 7: Prepare necessary requests. Work with team members to prepare as much of the requested information as possible prior to audit kickoff. This includes preparing schedules, identifying where supporting records are located, and drafting memos or write-ups of the accounting for complex or high-risk accounting areas.

  • Significant preparation for a financial statement audit, before it begins, helps you and your team work through the long list of information and schedules requested by the auditors early on.

    Having clean and accurate information ready by the beginning of an audit can lead to fewer questions by the audit team, reduce the amount of time spent by both parties on rework and follow-up requests, reduce potential audit overrun fees, and minimize the number of audit adjustments reported to management and the Board upon the conclusion of the audit.

  • Audit planning and preparation means developing an overall strategy and action plan for a company’s upcoming audit, such as a financial statement audit.

    It helps identify key deadlines, high-risk audit areas, and the information required to successfully complete the audit, as well as the individuals assigned to each area of the audit.

  • At the end of an audit, the auditor (whether a firm or individual) will prepare an audit report. This report states the auditor’s opinion on whether the audited financial statements are materially correct (“unqualified”) or requiring adjustment (“qualified”), as well as the regulatory standards under which the audit was performed (e.g., “AICPA” vs. “PCAOB” for US companies).

Audit Readiness Prep