What is one of the most important factors that contributes to the slow-paced growth of an organization? Ask CFOs and they would immediately cite inefficient finance and accounting as the main reason. An Ovum study of 150 large companies in the United States, United Kingdom and Canada revealed that the biggest priority of CFOs is outsourcing F&A processes. Most survey respondents considered efficiency delivery as the main strategic aim of the accounting department, be it within the department itself or across the company on the whole.
In the competitive framework of modern markets, there is little room for F&A functions that are not standardized, streamlined and fully functional. In such a scenario, finance and accounting outsourcing (FAO) has come to assume new importance. Be it reviewing financial statements, developing operating budgets or cash flow management, clients want quality services from lower financial investments from their outsourcing partners in order to achieve remarkable results efficiency wise in their F&A functions.
What makes industries take to FAO?
Cliché-ridden yet time-tested functions like cost reduction, improved process, access to the best talent resource, freedom to focus on core competencies and faster turnaround time essentially prompts industries to consider FAO.
The growth of FAO globally signals its bright future, albeit those providing customer-centric, cost-compliant and quality services would stay longer in the market. Here is why this phenomenon is becoming more popular by the day:
- Reduced Costs Industries that externalize accounting processes in the early stages of their business stand to gain from reduced operating costs and improved business productivity levels.
- Efficiency-Driven Results FAO leads to efficiency and improves the business performance of any organization because outsourcing companies feel the need to adopt the latest technologies as well as business strategies that tend to satisfy clients. Vendors can’t afford the risk of losing clients by providing substandard services.
- Access to Best Talent Pool Since you are outsourcing, you are no longer limited by geographical boundaries and you get access to a vast talent reservoir that offers you cost-efficient yet quality business strategies.
- Faster Turnaround Time Since organizations have the best of talents and requisite resources at their disposal, thanks to a dedicated Finance & Accounting operation, they get the services within the stipulated deadline and the turnaround time too is faster.
- Time To Focus on Core Competencies You are outsourcing your Finance & Accounting operations obviously because it is not one of your core competencies and doesn’t help you grow your business. Outsourcing your F&A-related work gives you time to focus on your core competencies.
- Cost Savings Accounting is a complicated and yet unavoidable exercise; so staffing an entire accounts department with new workforce will involve budget-draining recruitment and training processes. To avoid this, an organization outsources their entire or part of their accounting functions to save considerably on their operating costs.
Accounting and Finance, while being crucial to any business, needn’t always be handled in-house and shouldn’t be a cause of worry if you don’t have in-house talents to handle it. A good FAO vendor will help you save on all the above-mentioned fronts and fast-track your business to growth. FAO is an emerging function that will only grow more with time and the future will be extremely competitive for companies offering FAO services.