3 unexpected benefits of long-term finance & accounts outsourcing relationships

There’s nothing new about outsourcing F&A functions – many UK businesses have been doing this for over a decade now. Following in the footsteps of larger organisations, SMEs and even small businesses have jumped on the bandwagon. At this point, there’s no denying the fact that outsourcing has gone mainstream. But it has not reached full potential.

While CXO-level executives and finance leaders are attracted to finance & accounts outsourcing, many are unsure about the actual benefits that such a major transition would deliver. This is especially true for companies that already run a tight ship. On the other hand, outsourcing horror stories stop many from exploring the benefits. They think, ‘no point rocking the boat!’

Real-life experience: a proactive finance & accounting services company can exceed expectations

At QX, we know something about long-term outsourcing relationships – many of our clients have been with us right from the start. And we have a number of clients that have stayed with QX for 5 or more years. We asked them why they chose to outsource their F&A functions to India. As you would expect, achieving cost savings without compromising on quality was the key expectation for most of our clients 8-10 years ago.

With QX, they were able to achieve this goal – but with the relationship spanning a long period, our clients reaped benefits they did not expect at the outset:

1) Process improvements, technology adoption and skyrocketing efficiency: One major benefit of using a specialist F&A services provider is the access to the combined wealth of knowledge the organisation possesses. Working with a wide range of clients and industries, the offshore partner is naturally exposed to a number of different processes and software systems.

As a result, the service provider develops a deep understanding of the type of processes that work the best, technologies that can help with process transformation – and most importantly – how process reengineering and technology upgrades can be implemented. Over years, we have surprised our clients by not only supporting their finance operations transformation initiatives, but also by suggesting more effective ways of achieving their business objectives.

2) Better management, utilisation and retention of talent: Basic finance and accounting functions like payroll, AP, AR, credit control or management accounts do not satisfy ambitious and exceptional accountants in the UK. Most accounting professionals in the UK want to grow – and fast. The more talented your accounting staff, the more difficult it is to retain them; especially when the work you want them to do is perceived as tedious, labour-intensive and time-consuming.

Offshoring F&A and payroll functions opens up managerial or strategic positions for the most talented members of your team – not only is your organisation able to retain the best, but it is also able to derive the most value from them. Using the team in India for day-to-day accounting functions has helped many of our clients to retain their strongest performers.

But that is just one side of the story. Apart from offering better prospects to the on-shore talent, our clients are able to enjoy staffing continuity offshore. For instance, many of the offshore teams are run by highly experienced leaders for 7+ years.

3) An Offshore Centre of Expertise: As the team in India integrates with the UK team, and as they work together to set and refine processes, the offshore F&A team gains a complete understanding of the processes. Over time, the communication between the teams becomes seamless. Reliable delivery from the offshore team gives the finance leaders peace of mind – they learn to count on the offshore team and treat it as an extension of the onshore team.

As the team members on-shore move into strategic roles or shift focus to high-end activities and the service delivery from the offshore location becomes completely reliable (100% SLAs), it is possible to take the relationship to the next level. For many of our clients, our payroll and accounting teams function as a centre of expertise. This means that the offshore team drives innovation and adds value way beyond labour arbitrage.

Wrapping up – higher expectations

As the area of outsourced finance & accounting services matures, these previously unexpected benefits are often what our new clients demand right at the outset. With many of our new clients, we begin the relationship with one eye on transformation. Of course, while the relationship needs a stable foundation for the launching of more ambitious initiatives, the time-frame required to achieve this continues to shrink!

If you would like to learn more about how outsourcing can benefit your organisation, please don’t hesitate to get in touch with us.

Originally published Jul 24, 2018 12:07:23, updated Jan 29 2024

Topics: Finance & Accounting Outsourcing