Businesses have been preferring to outsource finance and general accounting right from the onset of outsourcing, and this practice continues to boom. Technological enhancements are prompting companies to explore fresh ideas and seek new answers to streamline their F&A processes.
Ensuring efficiency is often the main strategic aim when a company outsources F&A processes, be it is within a department or across the company. While cost reduction is the primary objective of outsourcing, companies wish to know where else their service providers can contribute to make their processes run more efficiently.
Outsourced F&A Functions Helping Companies Move Up the Value Chain
Payroll accounting, accounts payable, and accounts receivable are commonly outsourced accounting services. A recent research has found that companies are moving up the value chain in accordance with the types of F&A functions they are outsourcing.
Shift from Basic Transactional Process to Strategic Functions
The trend is to move from basic transactional process like payroll accounting to more strategic functions such as creating budgets making forecasts and doing internal audits. Many organizations are now outsourcing internal auditing, which is a high-level function.
Various Advantages of Efficient F&A Processes
Putting in place efficient F&A processes helps companies achieve a range of impressive outcomes – more streamlined information and more cash. Simplifying and standardizing F&A processes helps companies curtail the cycle it takes to close their books. You are able to create better benchmark and baseline financial processes to ensure adherence to regulatory requirements.
Expanding the Scope
Companies need to expand the scope of outsourcing to multiply the benefits they derive from it. Outsourcing only a function or two limits the benefits that they can reap into. When you increase the number of functions you outsource, you get much more than simply augmenting the transactional component. This enables you to take optimum advantage of the cash on-hand and hone internal processes.
Leveraging the Power of Data
You need to look toward partners with greater expertise and technology resources to leverage the power of data. Most companies lack the expertise in-house, which compels them to look for a competent outsourcer. Your best bet is to collaborate with an outsourcer that provides you instant access to advanced technology and professionals who know varied skills as well as the back of their hands.
End-to-end F&A Capabilities
Today, companies expect end-to-end F&A capabilities from outsourcers. Zeroing in on an outsourcer providing one-stop services helps you get a better grip on the pay-to-procure process. The deployment of robust analytics can help you gain an understanding of the entire supply chain, which in turn should help you standardize the procedures company-wide and control budgets efficiently.
External Expertise Helps Reduce Fraud
Bringing in external expertise helps reduce fraud. As per an Association of Certified Fraud Examiner study released in 2012, small businesses with less than 100 employees are the most common victims of graft with the median fraud amounting to an astounding $147,000. The major reason why small companies are facing graft-related instances is that they lack the expertise of a controller who could analyze the KPI and metrics signaling abnormal activity in transactional and billing data. External audits and accounting controls have proven to be more efficient in detecting or preventing fraud.
Efficient Backend Operations
Outsourcing F&A to an external team of professional accountants is always advantageous as they know the tax codes and laws backwards and forwards. While focusing on your core job, you can be sure that the backend operations will be taken care of efficiently. Professionals keep themselves abreast of the latest tax information, while ensuring compliance to only part-time payment.
F&A Becomes a Flexible Expense
Staffing becomes a flexible expense, rather than a fixed one when you outsource. Outsourcers generally have a bench of professionals with expertise in different F&A streams. Human resource is considered and taken on board on task basis, bringing in the most experienced and qualified individuals to your side for any given job.
Now that you know the advantages of outsourcing well, the next logical step that you can take is that you can find the right outsourcer as per your requirements.