by: Sarah Joson
Thursday, February 02, 2017 |
Finance and accounting outsourcing is a great way for businesses of various types and scale to find flexible accounting solutions. It is a tried and tested business model that helps drive operational expenses down, and provides greater value across the board.
Finance outsourcing presents two opportunities. First off, you have the short term goal, which aims to drive finance operation costs down, and the long-term goal, which aims to create value in finance and accounting departments.
Case in point: business executives of non-finance companies do not like to crunch or be involved with the company’s numbers such as the routine expenses which often include paying their suppliers, people, facilities, as well as collecting scheduled payments from clients, etcetera. The bosses only want to see the results.
Additionally, you will not find them exerting effort in creating value in their financial processes. They only want to see the “more for less” part of their outsourced finance and accounting services and hope their solution will stick in saving more money.
You are now probably asking, “How can executives produce additional value from their finance and accounting process?” The simplest answer is instead of treating finance and accounting as necessary evil, why not push for a well-orchestrated finance process that could result in a better finance operation?
Yes, it’s a painstaking process, but wouldn’t you rather have your decision makers focus more on the core processes and growth of the company, rather than trying their luck in fixing the bottlenecks in the accounting department?
So where do you start? Before you get too excited in finding the right finance outsourcing partner, take into consideration that not all providers are the same. Some excel in carrying out basic accounting tasks, while others have more experience in creating finance strategies. Moreover, more and more finance outsourcing providers are starting to move towards in-depth sector and domain knowledge approach.
Also, you have to look into what type of client-provider relationship you will be having because this will greatly affect the outcome of your partnership. Too stringent and it will be a day-in-day-out kind of operation where the client’s viewpoint and “rules” can affect limit the provider’s range, or too lax and there’s a possibility that the company’s internal finance skills could decline.
All in all, you will not be able to see what opportunities you are missing from outsourcing finance processes until you have finance experts help you find the problem areas in your financial data and streamline your finance function. It’s simply making the best financial decision for your business. More importantly, bear in mind that you do not need to create new finance processes and start from scratch. You can adapt and create a better finance route by creating a shared services environment where your existing team can work with the outsourced finance team, or have the outsourcing service provider create a custom plan for you.