RFDC Session Recap: How to Think About Outsourcing vs. Insourcing Your Accounting
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Our speaking session at the Restaurant Finance and Development Conference, How to Think About Outsourcing vs. Insourcing Your Accounting, was a standout moment. We were honored to co-present with OneDataSource. During the session, we explored the key considerations restaurant groups should evaluate when deciding between these two approaches, highlighting technology and industry expertise's role in driving efficiency and scalability. Below are a few highlights from the session.
When discussing Outsourcing vs. Insourcing your accounting function, there isn't one right answer. Each restaurant group is unique, so finding what works best for you is important.
Why Outsource Your Accounting Function?
Outsourcing your accounting function allows you to access specialized expertise, leverage advanced technology, and scale efficiently, freeing up your team to focus on core business growth.
Benefits of Outsourcing:
- Historically, the number one goal organizations have for outsourcing their accounting function is cost savings. Depending on the accounting provider, cost savings comes from utilizing off-shore teams.
- One major factor is the effort to avoid staffing challenges associated with training and retaining employees in accounting departments. Like many industries, the restaurant industry is currently experiencing a shortage of accounting staff. Outsourcers face this challenge, shifting the burden from restaurants. It also shifts the responsibility of specific infrastructures like IT servers, HR, etc.
- Finally, one of the key advantages of outsourcing your accounting function is scalability. Restaurant groups can scale up or down, depending on their needs. This is critical for restaurant groups in acquisition mode, giving them significant flexibility. Alternatively, you can scale as needed if you sell or close locations or sell off a brand.
Value Proposition of Outsourcing
The model for outsourcing accounting has changed over time. It has gone from data entry, cash reconciliations, and day-to-day manual work to a more sophisticated model with advancements in technology and automation. The value proposition for outsourcing has changed as advancements have occurred over time. You can access more experienced, skilled people, like fractional controllers, on an as-needed basis.
Why Keep Your Accounting Function In-House?
Alternatively, keeping your accounting function in-house is also a strong value proposition.
Benefits of Insourcing Your Accounting
- Janet Jackson said it best: it is all about Control. Managing and overseeing the entire accounting function is essential for some restaurant groups. You can hire and train your staff exactly as you like them. You have full control over how and when they work. This can be important for upholding the quality of information.
- While cost savings come up for reasons to outsource, technological advancements have made insourcing more manageable. You can now easily purchase the systems you need. It's not proprietary to the outsourced accounting firm. You have access to state-of-the-art workflows and cost savings, bringing down the insourcing cost.
There Isn't One-Size-Fits-All Solution
No matter your side, there isn't a one-size-fits-all solution. As with everything, you pay for what you get. Not every outsourced accounting firm will have cost savings, especially if you compare bookkeeping to a fractional CFO role.
Trends to Watch Out For With an Advanced Tech Stack
One common theme in the debate between outsourcing and insourcing is the evolving technology stack. It's amazing how technology has advanced over the years. Whether you want to manage your tech stack (a case for insourcing) or find it overwhelming (a case for outsourcing), below are a few key trends.
- Empowerment: A well-designed tech stack empowers employees, managers, operators, and restaurant owners to gain insights and make informed decisions. With legacy accounting systems or out-of-date tech, access to data wasn't easy.
- Efficiency: Technology allows restaurant groups to operate more efficiently and reduce manual labor. When data is more efficient and readily available, you don't have to wait for answers, and staff doesn't have to respond to dozens of questions that are now accessible at your fingertips. When data is more efficient and readily available, you no longer have to wait for answers, and staff members don't need to respond to numerous questions that are now at your fingertips. You can focus more on higher-level tasks, solving unique problems, and analyzing data. It makes everyone's job more efficient, from the store managers to the accounting staff.
- Retired Outdated Technology: Outdated on-premise technology will cause even more antiquated systems to become obsolete—for example, Great Plains.
- More Solutions: Many solutions now define one or two aspects that can lead to significant growth in your tech stack. You now have systems for point-of-sale, back-office, payroll, inventory, etc.
What Should My Restaurant Group Do?
Deciding whether to outsource or insource is a complex and personal decision. At Tablespoon, we assist restaurant groups in achieving both goals. Let's discuss and determine the best options for you.
