CFOs, FDs and other finance leaders across the globe are expected to play a wider strategic role in helping their company thrive in a rapidly changing world. At the same time, they are expected to transform the F&A functions through process improvements and FinTech implementations. And it doesn’t escape anyone’s attention that the F&A department is a cost centre. So, there’s always pressure to tighten the operations and reduce the costs.
Offshore finance & accounting services are often seen as an easy way to slash the cost of operations – typically, you can get from 40-60% reduction in costs through labour arbitrage. This is old, stale news.
Today, finance leaders in leading businesses are partnering with reliable offshore providers to improve operations, transform the F&A department and deliver a better experience to both internal and external stakeholders. Cost savings are fine, but here’s how finance and accounting outsourcing can add real value to your business:
1) Technology implementation
Many finance departments either rely on paper-based processes or use outdated software. With the emergence of RPA, cloud technology and next-gen FinTech solutions, it is possible to automate a number of common F&A processes. For example, with Optical Character Recognition and Document Management Systems, you can automate a large portion of the AP invoice processing function.
While not all finance and accounting outsourcing companies have the capability to support such initiatives, you can choose a partner with relevant experience and use their expertise to significantly accelerate the process of FinTech implementation. More mature organizations can move beyond this and partner with a provider to reap the benefits of RPA and intelligent automation technologies.
2) Process improvements
Many accounting departments lack clearly defined and documented processes. The lack of standardised processes and a people-driven system of operations often lead to major process inefficiencies. And, with mergers or acquisitions, the process may need overhauling, even when the accounting for all the separate sites is managed perfectly.
F&A back-office service providers can help you to inject best practices, streamline processes and document all the processes. Well-defined SLAs and KPIs ensure that the teams deliver quality work, on time. For finance leaders who simply do not have the bandwidth or resources to spend on reengineering processes, outsourcing provides a superb solution.
3) Centralised F&A back-office
When you move your siloed back-office functions to one central location, it is possible to develop that team as a CoE (Centre of Excellence). It is true that at the first stage of the outsourcing relationship, the focus is on transition and stabilising the process; however, success at this stage open the door for the ‘transformation’ stage.
Over time, as the offshore team gains expertise in the basic tasks and the delivery is reliable, the relationship can be taken to the next level. In addition to the basic tasks, the team can suggest process innovations, help optimize the benefits from existing software systems, explore new technology, and suggest ways to improve the bottom line.
Are you planning to outsource your F&A functions? What are the primary drivers of your decision? Do you just want to cut the cost, or do you expect more from outsourcing? Get in touch with our experts to learn how finance & accounting outsourcing can help your business achieve its transformation goals.