Why Outsourced Accounting Succeeds—or Fails

Outsourced accounting can give a dealership access to reliable expertise without the cost of another full-time hire. But it’s not a plug-and-play solution.

It succeeds when the dealership and provider operate as one team—and fails when responsibilities, deadlines, communication and controls are left unclear.

Choose the Right Type of Support

Start by deciding whether you need a short-term solution or a long-term partner:

• Short-term support: Provides the time and flexibility to find your next high-performing employee
• Long-term partnership: Offers ongoing stability without adding another full-time hire

Then determine if you are considering international or U.S-based solutions. International providers may be less suitable for short-term needs because onboarding and process training can require considerable time to establish.

International Outsourcing Challenges

When choosing an international provider, be prepared to address labor-law requirements, language barriers, time-zone differences, and most importantly, training.

A team member working outside the U.S. may have no prior experience with American dealerships or business practices. You may therefore need a deeper understanding of your own accounting processes so you can explain procedures and expectations clearly.

Do not assume a provider already understands how your dealership operates. Although accounting is grounded in debits and credits, practices and conventions vary by country.

Some dealerships outsource accounting internationally in very small pieces. Although this may reduce costs, it can require 10 people to complete work that one in-store employee once handled. Fragmenting responsibilities often weakens accountability, slows workflow, and demands more oversight from dealership management.

Dependencies create delays. Person D cannot begin until persons A, B and C complete their portions. In one dealership, person D was the in-store employee whose own performance suffered as delays accumulated from those outside the country.

Training requires preparation and support. It is unreasonable to expect an in-store employee to train people in another country without adequate preparation or resources. Not everyone is an effective trainer, especially in a complex remote-working arrangement.

Outsourcing requires clear instructions, defined expectations, and consistent review procedures. Without these controls, even routine tasks can create significant errors.

For example, one dealership assigned vehicle stocking to an overseas team member. That team member used an artificial intelligence agent that posted every vehicle to the ledger incorrectly because it treated manufacturer’s suggested retail price as the vehicle cost.

That case shows unclear expectations and a process implemented without review or direction.

Protect sensitive information. Outsourcing work outside the U.S. may also introduce additional security risks, making appropriate safeguards and oversight essential.

Outsourcing Within the U.S.

Someone already familiar with the U.S. automotive industry can considerably cut transition time and needs information about your store, not automotive accounting.

Setting up the right partnership from the beginning is key. That begins with clearly defining expectations on both sides: Which services will the provider handle, and which responsibilities will remain with the dealership?

Address internal communication issues. If the previous controller or office manager had to ask managers repeatedly for information and still received no response, hiring a new controller or using an outsourced provider will not solve the underlying problem. The dealership must first set clear communication expectations.

Treat the provider as a trusted member of the team. Department managers, the general manager and owners should work with the outsourced provider as they would with a trusted in-store controller: Share information promptly, communicate openly, and support the partnership.

Align Information and Deadlines

If the GM or owner holds an asset meeting every Tuesday, the outsourced provider should know which data is needed and when it must be available. That does not necessarily require a traditional report.

Modern executive-management tools can consolidate information from the dealer management, customer relationship, and inventory systems and other sources for use during the meeting. It’s about information being in the system in a timely manner.

Include the provider in key meetings. Invite the provider to attend when its insight would be valuable, just as you would an in-house team member.

The same discipline applies to deadlines. If the outsourced provider requires all deals by the fifth day of the month to process payroll and close the books on time, the dealership must meet that deadline, not submit them on the 8th. Both sides must work as one team.

Decide What to Outsource

Once you have determined where you will outsource, the next major decision is how much of the accounting function you will outsource. Options include:

• Accounts payable
• Bank or credit card reconciliations
• Finance-and-insurance product cancellations
• Monthly financial reviews
• A fractional controller or chief financial officer role
• Or the entire accounting operation when qualified talent is difficult to find or retain

Every option depends on a strong partnership. A capable provider will define what the dealership must handle internally and establish workflows that make it easy for the store to supply the information needed to complete the work.

For example, an in-store office manager can walk into the finance manager’s office and wait for a deal jacket. An outsourced provider cannot.

The store must scan the deal into an electronic system so the provider can access the documents and keep the process moving. Someone in the store must be accountable for the items the outsourced provider simply can’t do because it isn’t  on-site.

Assign Two Key In-Store Roles

The most successful outsourcing partnerships have two people in the dealership who actively support the process:

1. A GM who understands the partnership. The GM recognizes that the outsourced provider is there to help the store succeed and takes responsibility for removing internal roadblocks. For example, if the finance manager is responsible for scanning deals and misses the deadline, the GM follows up to ensure the work is completed.
2. An accounting liaison. Often the most important role, this person may work in clerical support, title, inventory or accounting and serves as the provider’s primary contact for resolving daily issues. If a receipt has not been scanned, the liaison locates and scans it. If a service adviser doesn't respond to repeated emails or calls, the liaison follows up in person to identify the vehicle associated with a sublet that’s missing a purchase order.

Outsourced accounting works best when the dealership removes barriers, responds promptly and gives the provider the access and support needed to keep work moving.

In return, the provider delivers accurate accounting information, timely financial statements, real-time problem-solving, and recommendations to improve the dealership’s operations and data use.

ABOUT THE AUTHOR - Harlene Doane is CEO of DealerStrong, bringing decades of hands-on dealership and accounting expertise to her leadership role.

EDITOR’S NOTE: This article was authored and edited according to Auto Dealer Today editorial standards and style. Opinions expressed may not reflect that of the publication.