Payroll, tax top choices for outsourcing in finance

BY KEN TYSIAC

Payroll and tax remain the most often outsourced functions for accounting and finance departments in the United States and Canada, according to a new survey.

Outsourcing of payroll occurs at nearly half of U.S. and Canadian companies participating in the fifth annual benchmarking survey released jointly Tuesday by staffing services firm Robert Half and Financial Executives Research Foundation, the research affiliate of Financial Executives International.

Forty-seven percent of U.S. companies and 47% of Canadian companies reported outsourcing payroll. The largest companies are more likely to outsource payroll, as 73% of U.S. companies in the survey with revenues of $5 billion or more outsourced this function.

Nearly 1,600 companies—79% from the United States and 21% from Canada—participated in the survey.

The payroll outsourcing percentage was slightly higher in the United States than in 2013 (46%). The percentage of Canadian companies outsourcing payroll dropped from 54% in 2013.

Outsourcing of tax rose in 2014 among respondents in the United States (42%, up from 30% in 2013) and Canada (37%, up from 31%).

Other findings from the 2014 survey included:

  • Fifty-nine percent of U.S. respondents and 66% of Canadian respondents reported that they still reconcile their accounts manually.
  • A majority of respondents in the United States (74%) and Canada (67%) anticipate that their compliance burden will increase over time.
  • Among U.S. respondents, accounting and finance managers average 47 hours of work per week, while nonmanagement staff averages 42 hours per week. Canadian respondents said managers average 46 hours and nonmanagement staff averages 40 hours.


“What’s striking is the continuing high percentage of companies that rely on manual reconciliation of accounts—some with thousands of general ledger accounts,” Paul McDonald, a Robert Half senior executive director, said in a news release. “There is a significant opportunity for these firms to streamline the close and use their resources more efficiently.”

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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