What is an Outsourced Accounting Department Model? And Why It Matters

by Michael Hsu on October 11, 2011

Good day to all the readers of our humble blog. I can’t believe I haven’t done this sooner (since this is what I talk about everyday.) But today we are going to talk about what the outsourced accounting department model is. In fact, we are going to break it down to two parts: part 1, we will talk about how accounting used to be done and what we saw as being broken. And in part 2, we will talk about how we are not just patching or tweaking but revamping the entire process/structure of a new generation accounting department to fix what was broken. As far as we are concerned, an outsourced accounting department model is the only way to do things in 3-5 years time. So here we go.

Part 1 – Entrepreneur & the Accounting Department – What was then…

Part 2 – Entrepreneur & the Outsourced Accounting Department – What is now…

So what do you think? We’d love a good conversation on why you think (or think not) the outsourced accounting department model is the way of the future for entrepreneurs. Few things to keep in mind though: Outsourcing does not equal offshoring. We are defining entrepreneurs and small business as companies that do between $1 to $100 million revenue a year with most of them weighing in at the $2 to $25 million range. Don’t be shy.

Tagged as: outsourced accounting, outsourced accounting department, outsourced accounting services, outsourcing

  • Anonymous

    I love these video posts, dude.  Keep rocking it.

  • http://twitter.com/MichaelDavisCPA Michael E. Davis CPA

    Michael I really like these video posts. Great representation of the outsourcing concept. I’d like to think some of us have been practicing this model for some time now. But with current technology I can apply it with much greater efficiency, and, time and space are no longer obstacles. Plus, it just makes a lot more sense the way you draw it up!

  • http://www.deepsky.co W. Michael Hsu

    Thanks bud. We will. Super stoked and we hope that we are answering some of the questions that entrepreneurs may have.

  • http://www.deepsky.co W. Michael Hsu

    Thank you, Michael, for the kind words. You are a true pioneer for having worked under this model for some time and are absolutely right that technology had opened up new opportunities and possibilities. Making it efficient is the first step, but the space that it opens up for effectiveness is what’s mind blowing for me. We can’t wait for all the cool new things that we are going to work on in the next couple of years.

  • Jcaruso

    Michael – I really enjoyed these videos. We’ve been offering outsourced finance and accounting for six years now (see link to our site below) but you explain the value proposition so succinctly, I wish every entrepreneur in the Philadelphia area could see it. Thanks for helping educate and grow this nascent market. Obviously I am as bullish as you on outsourcing. No company does their own payroll anymore, and the position ”payroll supervisor” is a relic of the past. Similarly, someday soon, no company will do any of their own accounting, and the position “controller” will no longer exist within companies of a certain size.

    P.S. You look like you’ve read “The Back of the Napkin”??? ;-)

     (http://www.fesnak.com/services/financial-management-solutions/financial-management-outsourcing

  • http://www.deepsky.co W. Michael Hsu

    James,

    I am glad you enjoyed our little video. We wish every entrepreneur in the world can see it and enjoy it as much as you did. 

    Just doing our little part in educating this new market. The technology and paradigm shift will make this a standard in the next 3-5 years. Sure, we’ll always have incumbents for years to come, but then again, there are still companies who are doing their payroll in-house.

    So glad to have “met” you and thanks for reaching out. Let’s definitely grow this space together and help spread the knowledge.

    No I have not read “The Back of the Napkin” but I’ve recently picked up his “Unfolding the Napkin” – seems pretty cool so far – and I can safely say that I am definitely a “black marker.”   

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