90% of CFOs are outsourcing accounting functions

The talent shortage in finance and accounting has been one of the biggest challenges finance teams have faced in recent years. For a variety of reasons, such as the 150-hour requirement, low pay and lack of work-life balance — particularly on the partner track in public accounting — many finance leaders have struggled not only to fill positions on their internal teams but also have had to outsource work as a result.

In Personiv’s latest CFO Pulse Survey, dubbed the 2024 Finance and Accounting Talent Market Outlook, research shows that despite the talent shortage not getting much worse in finance and accounting, it’s not getting any better. Ninety percent of the finance leaders surveyed said they are already outsourcing some accounting functions as a way to easily find qualified accountants when needed; something that many finance teams can at times find themselves scrambling for. 

Top outsourced areas

Areas where technology has tried to provide some labor relief — such as invoicing and making payments — are the areas where finance leaders are outsourcing. While some CFOs have argued that new technology isn’t necessary for financial transformation, it’s clear that lower-level accounting work requires either manual processes or automation technology. For those who aren’t turning to automation, outsourcing may be the next best bet. 

The top areas for outsourcing are accounts payable (65%), accounts receivable (48%) and cash application (31%). For the small minority of those who aren’t outsourcing, they said they are interested in exploring outsourcing options around accounts payable, billing and expense reporting — areas right in line with their peers who have already begun using exterior talent.

Help wanted

Despite the push for outsourcing, many finance teams haven’t given up their hopes of filling open roles. Sixty-seven percent of CFOs said they are looking to hire staff accountants, the most desired role to be filled. Some CFOs also are looking to fill senior accountant positions (43%) and tax accounting positions (24%).

The time it takes to fill positions is also a factor in why CFOs are choosing to outsource. Surveyors note the average time in the U.S. from job posting to hire is 44 days. During that time, other staff members must pick up extra work to maintain the same level of productivity. Even after a hire is made, that doesn’t account for the light workload a new candidate will take on during the onboarding process for several weeks or even months.

As one respondent to the survey put it, some candidates in finance and accounting are great interviewers but not great accountants. “We’ve found that candidates oversell themselves, leaving the tenured staff to babysit and constantly have to watch their quality of work,” the respondent told surveyors.

Attracting talent is about culture, not compensation

The factors that play into what makes an attractive role, according to the surveyors, are elements of emotional support and career development within the role. While respondents were highly split on these factors, the top choices were positive company culture (17%), work-life balance (16%) and recognition and appreciation (15%). Surprisingly, competitive salary and benefits were at the bottom of the list.

As Personiv’s global head of finance and accounting Matt Wood suggests in the report, finance leaders need to keep in mind all of the above factors when making their hires.. They must do so promptly, he says, but in a way that makes sure they don’t sacrifice talent quality in the process.

“Roles that stay open due to a lack of qualified talent can start a cascade of additional costs, from recruiting to burnout-related attrition of other employees,” said Wood. “But hiring under-qualified accounting candidates can increase costs by requiring more training and extra supervision.”