According to Deloitte’s 2016 Global Outsourcing Survey, 42% of leading global businesses currently outsource their finance functions, while 36% intend to increase their use of outsourcing.
As the privately-built PBSA sector consolidates, student accommodation owners and managers are keen on leveraging benefits ranging from low-cost labour to quality improvement, process efficiencies and service innovation. Apart from the obvious cost savings, mature organisations expect the following outcomes from outsourcing their finance and accounting functions:
- Access a larger and more stable pool of professional accountants
- Back-office support to improve and speed up financial reporting
- Reduce operations costs related to technology and infrastructure
- Benfit from expert support for digitisation, process reengineering and innovations
- Gain reliable assistance while navigating M&A deals, internal audits, and business development
Our finance & accounts outsourcing services cover approximately 15% of UK’s privately-build PBSA sector. While working with the clients from this sector during the last 7 years, we have observed that many of the CEOs, Managing Directors and Finance Directors are attracted to the benefits that partnering with an F&A outsourcing firm can deliver. However, it is the threat of unsuccessful outsourcing that holds many businesses back. And it is a valid fear, especially for the niche PBSA sector.
Selecting the right partner is a must for the success of any back-office outsourcing project. In order to safeguard the success of your project, you must hunt for a partner with the following capabilities:
1) Ability to reduce the cost, not the control: While cost reduction is usually the prime driver for student housing companies looking to outsource, it should not come at the price of losing control over quality. Therefore, it is essential to select an outsourcing partner with delivery and governance policies in place to allow the on-shore finance leaders full control and visibility over the offshore operations.
2) PBSA industry expertise: Whether it is general accounting, payables and receivables or management accounts, the basic processes remain the same, irrespective of the industry. However, if you are able to find a reliable F&A outsourcing provider who understands the nitty-gritties of PBSA accounting, the chances of a successful transition and reliable delivery will multiply.
3) Right approach to the relationship: Does the provider act as a separate team working for you, or are they able to gel with your team and actually function as an extension of your team? Ideally, you need to be able to build a dedicated offshore team that is in sync with your onshore team. At QX, we are committed to a ‘Partnership Approach’ which focuses on not just ‘doing’ the accounts but give you feedback and commentary, identify cost savings and suggest smarter ways of operating.
4) Track record of successful transitions: One of the biggest threats for student housing companies moving from an in-house model to an offshore model is implementation failure. The initial process of outsourcing requires investment of additional time and effort; terminating a relationship also entails similar costs. PBSA providers can mitigate risks associated with transitions by choosing an partner with a proven track record of successful transitions.
5) Proven delivery capability: Choose a partner that you can rely on for accurate and timely delivery. Check their record with previous clients, find out whether they are able to meet or exceed the terms of SLAs (Services Level Agreements). Professional and reliable finance & accounting companies will be able to deliver to your existing KPIs and may also be able to define new KPIs that enable the team to deliver more efficiently.
6) Software experience: Whether you are using well-known software like Sage or SAP B1, or are using industry specific software like Yardi, StarRez or TCAS, it helps if your outsourcing partner has previous experience working with these software systems. So it would be a good idea to check the outsourcing provider’s experience with the software that your organisation uses. In case you are planning to adopt new technologies or migrate to a different software provider, you may want to check if your outsourcing provider can provide support for these initiatives.
7) Value additions: Are you simply looking for a team of accountants who can replicate the onshore processes at a lower cost, or is your aim to achieve process efficiency through process reengineering, digitisation and innovation? For instance, we began our relationship with one of our key clients by delivering the services more efficiently, but over the period of time the offshore team supported the client through M&A activity, internal audits, budgeting & forecasting and financial reporting.
QX specialises in finance & accounting for student accommodation providers
QX works with many of the top student accommodation companies, delivering accounting services for properties spread across 180 sites, covering 50,000 beds. Our teams work with a wide range of software and our F&A services have helped student housing owners reduce the operating costs for accounting functions by up to 50%.