The disturbing fact, that is true for many firms, is that their Chief Financial Officer (CFO) spends long hours every day attending to manual tasks. According to Deloitte’s CFO Signal Survey, CFOs across the world are having more than 12 to 15 hour days. Such a schedule may turn out to be detrimental in the end as important decisions either are delayed or might not be given enough thought.
A major contributor to this issue is manual reporting conducted in-house. Many CFOs have to allocate time to manually checking and rechecking figures, performing calculations and doing analysis. CFOs and other top-level finance executives simply cannot afford to spend the kind of time on validation that manual reporting demands.
Another important point is that continuous manual reporting executed by internal employees might result in errors, if the burden of work is too much throughout the accounting cycle. In addition, performing only manual reporting limits the amount of insights that can be generated, through ratio analysis, forecasting and in-depth analysis, that CFOs need for taking educated decisions.
Therefore, the importance of reducing the burden of manual reporting on internal employees cannot be underestimated. This might be the reason why many businesses are looking at outsourcing their Finance and Accounting (F&A) functions to an expert BPO company.
How Outsourcing Finance and Accounting Processes Benefits Your Business
Apart from saving valuable time for CFOs and other executives, finance and accounting outsourcing has several benefits:
A specialist finance and accounting services company would give utmost priority to manage the business of their customers well. If this function is executed in-house, it would be of secondary importance to the business, and revenue generating processes would be given the priority. Hence, outsourcing your finance and accounting process would ensure that the tasks are safe hands and are given the importance they deserve.
Outsourcing F&A would allow your business to focus on revenue generation instead of worrying about issues emanating from accounting processes and systems.
utsourcing is that you can keep pace with advanced technology solutions at lesser costs. A proficient finance and accounting outsourcing company may be able to provide the improved technology for less than the cost of the firm’s old technology. The costs could be even lesser than the upgrade costs that the business would have to invest in.
Your business can take advantage of the fact that the outsourcer is likely to have a much larger and more specialized staff than you do. The provider can ensure that there is a small group of expert outsourced accountants working on its projects at crucial times or for complex rules and regulations. This would probably never be cost effective if done in-house.
There might be peaks and valleys in the monthly, quarterly, and annual F&A cycles. This requires businesses to budget for their in-house baselines and manage the costs of outsourced staffing during peak workloads. Therefore, companies need to handle staffing for F&A on a regular basis and ensure the cost-effectiveness of the activity. In contrast to this, outsourcing can help firms to make minimum cost commitments for such staff. An experienced finance and accounting outsourcing provider will perform resource management planning and ensure the delivery of lower per-unit resource cost. Scalability will be accounted for in the project scope.
By freeing up intellectual and financial capital, outsourcing F&A can help minimize risks. Here’s how:
When you shift functions to an outsourcer, you also shift the associated risks, to them. This is because, it is the responsibility of the outsourcer to deliver the functions without errors and on time. The client business need not handle risks such as expert employees falling sick before important deadlines or systems crashing at inappropriate times.
Errors in F&A could be anything ranging from wrong calculations to faulty accounting. It might be time-consuming and expensive for a firm to hire in-house staff to check possible errors in the processes. An outsourcing specialist will generally have multiple levels of review built into the F&A process. This means that they would be more likely to catch errors on time.
An F&A outsourcing company will have experts with more detailed or up-to-date knowledge of accounting principles and complex tax regulations, which is more of a necessity today rather than an option. Regulatory compliance will improve as a result.
According to Deloitte’s 2014 Global Outsourcing and Insourcing Survey, finance and accounting services outsourcing is expected to grow over the next few years. 30% of respondents in the survey, expected to outsource additional services across all areas of F&A, with the least historically outsourced services, Accounts Receivable and Billing, seeing an increase of over 30%. Currently many outsourced activities are basic transactional F&A processes such as Accounts Payable (AP); however, companies are starting to experiment with outsourcing non-transactional functions such as financial analysis.
The survey suggests that outsourced finance and accounting would continue to see strong growth and might become more of a standard practice for many companies. No wonder even small and mid-sized businesses (SMBs) and startups are finding it profitable to outsource a number of different Finance and Accounting functions. It might be high time you considered outsourcing your business’ finance and accounting processes as well.
If you are ready to free up capital and grow your business, contact us at Atlas Services .