Why cosourcing may be the appropriate delivery model for your accounting and reporting challenges

By Jamie Davis, Partner, Accounting & Reporting Advisory, Audit & Assurance, Deloitte & Touche LLP, and Mary Schmidlin, Senior Manager, Accounting & Reporting Advisory, Audit & Assurance, Deloitte & Touche LLP

Talking points

• Cosourcing may provide important benefits to accounting and reporting functions that you may not have in-house.
• Unlike traditional outsourcing, cosourcing is a teaming approach in which the external professional service provider works hand in hand with a company’s internal resources.
• With cosourcing as part of management’s processes, CFOs gain proactive insights, leading industry practices, and assistance in identifying complex issues early.

Accounting and finance leaders are more often looking for strategic insights to navigate the challenges they’re faced with. The pain points they share with us may sound familiar: a shortage of skilled accounting professionals, expectations to do more with fewer in-house resources, and evolving regulatory complexity and the compliance challenges that come with it. 

One question we typically get is: “What are other accounting and reporting functions doing to adapt to these emerging issues facing the marketplace? The answer for many companies is choosing between a cosourcing, outsourcing, or managed services model or hiring in-house. Of these options, cosourcing often proves to be a  scalable approach for many organizations. Here are a few factors to consider when deciding if cosourcing may benefit you. 

What is cosourcing?

Cosourcing is a team-driven approach to accounting and reporting where CFOs and/or CAOs collaborate with professionals from an external accounting advisory firm. Cosourcing offers access to knowledgeable and experienced accounting professionals who can take on projects tailored to a company’s needs. This allows in-house teams the ability to concentrate on other strategic areas and still maintain control over the accounting and reporting functions.

It's all about teaming

Cosourcing brings a strong collaboration element to your accounting and reporting function. It’s really all about teamwork and layering in external resources to your team for specific projects or tasks. It differs from outsourcing or managed services, which entail transferring a company’s accounting and reporting function to an external service provider with little collaboration. 

Cosourcing teams provide strategic insights that can help clients work through critical challenges and seize opportunities. They can assist with technical accounting and financial reporting matters on a recurring and consistent basis—all tailored to a client’s needs. A sampling of projects commonly cosourced, in our experience, includes:   

• Researching technical accounting issues.
• Analyzing complex transactions.
• Assisting with complex accounting matters on a periodic basis, such as impairment, stock-based compensation, earnings-per-share (EPS), foreign currency, derivatives, consolidations, and segment analyses.
• Assisting with ongoing quarterly and annual financial statements and disclosures.

Benefits of cosourcing

Maintaining consistency may sometimes be challenging when tasks are shared between internal and external teams. However, the benefits of cosourcing—as compared to outsourcing, managed services, and especially the status quo—can be appealing and worthwhile for many companies. They may include:   

• Tailored services: In today’s evolving business environment, cosourcing will likely increase agility by providing the flexibility to scale up or down efficiently to meet business needs.
• Flexibility: Allows companies to decide which projects to keep fully in-house and which to cosource. Scale up or down, as needed.
• Efficiency: By accessing resources only when needed, cosourcing could be more cost-effective than maintaining a full in-house team or completely outsourcing your accounting and reporting function. 
• Cost and capacity management: With cosourcing, you could manage capacity more effectively by leveraging external resources when needed, without committing to long-term costs.
• Control: Cosourcing allows the company to retain control over specific accounting and reporting processes while leveraging external insights for complex tasks such as technical accounting research and analysis. 
• Risk mitigation: By leveraging a cosource provider, you may reduce risks associated with outsourcing, such as data security or service interruptions.
• Knowledge sharing: Cosourcing can also simplify knowledge transfer between the external provider and the in-house team, enhancing internal skills and capabilities.

What role can an accounting adviser play?

If you’re looking for insights to the accounting and reporting challenges you’re facing, Deloitte’s cosource team may be able to assist.  With our effective teaming approach, companies have access to our subject-matter resources and global network of accounting and reporting advisory professionals,   scalable to your needs. For more information, watch our cosourcing video or download our guide.

Cosourcing teams provide strategic insights that can help clients work through critical challenges and seize opportunities. They can also assist with technical accounting and financial reporting matters on a recurring, pre-established, and consistent basis—all tailored to a client’s needs.