Outsourcing accounting functions can benefit government entities

Running a successful government is no simple task and often requires juggling many moving parts. Whether at a local, state or federal level, one way to alleviate some of the many stressors government officials face is through outsourcing accounting functions. While some might worry about sensitive or confidential information falling into the wrong hands, it’s important to remember these breaches can happen internally too. Outsourcing accounting efforts offers many benefits to government officials by helping them save time and allowing them to focus on essential tasks rather than investing hours and effort into tedious ones like bookkeeping. 

In any circumstance, it’s best to consider how the added costs and challenges associated with hiring accounting employees compare to outsourcing efforts. If you work for a government entity, here are a few reasons you might want to consider outsourcing accounting functions: 

Improve productivity while saving money 

According to USA Spending, the federal government spent $6.82 trillion in 2021. While this number is likely to be significantly lower at a state and local level, imagine government officials spending hours of their workday crunching these numbers every year. When government entities outsource their accounting efforts, they’re reducing the task from financial officials, which helps improve productivity and preserves energy you can delegate to other duties.

Outsourcing helps eliminate the need to hire full-time accounting employees, which often require hefty costs associated with compensation, benefits and training time needed to onboard new team members. Not only does outsourcing help save effort, but it also helps save money as these services often cost less than internal staffing and only require you to pay for what you need, while improving operations and controls in the process.

Eliminate risks, stress, and mistakes

Sometimes it’s best to bring in an outsider’s perspective. When governments outsource efforts, they are bringing in a new set of eyes that can identify risks, compliance issues or human errors, and other red flags that threaten financial integrity. Outsourcing efforts can benefit smaller government entities by identifying any red flags that may negatively impact your bottom line. 

Creating a positive work environment is often a priority for many businesses, and the government is no exception. According to the U.S. Bureau of Labor Statistics, 4.3 million Americans quit their current jobs for new ones in May 2022 alone. With the Great Resignation affecting nearly every organization, turnover can significantly impact the function of your government organization. Outsourcing accounting functions will help save time and money in hiring and training new employees and eliminate the risk of hiring unqualified ones. 

Outsourced accountants are unbiased external parties and are more experienced in identifying problems and providing solutions to deficiencies in current financial reporting. Outsourcing also helps ensure more safeguards are in place to avoid future turmoil, including addressing any gaps in documentation and helping to establish better in-house procedures for reviewing and approving expenses. Financial transparency is crucial at any government level. By outsourcing accounting efforts, you are putting your finances in reliable hands and ensuring your books are accurate, accessible and in accordance with most recent laws and regulations. 

Review metrics in real time 

In any business, it’s beneficial to learn from your mistakes and find solutions to avoid them from occurring again. Accounting service providers, especially when outsourced, can pursue optimizations and compile real-time metrics to provide insight into spending to help the government run more efficiently. These reports can better identify overspending on budgets and provide solutions to ensure the government’s financial operations are balanced. This helps improve transparency with constituents by providing reliable and accurate access to information at any time. Outsourcing work avoids pestering internal staff who might be busy with other tasks that will cause a delay.

Government officials face timely, demanding daily obstacles that require their undivided attention. Once you find an external accounting agency you trust, you can also explore other areas within your organization to outsource work. Examples include accounts payable processing, bank account reconciliation, cash flow management and planning, budgeting, forecasting and strategic planning. The more work you outsource, the more you can alleviate tasks for other team members and create a happier, healthier and more efficient environment while you focus on addressing constituents and community efforts.